Tuesday, Bessent said a deal to reopen the Strait of Hormuz could come "today or tomorrow." Wednesday, Trump said "tomorrow or the next day." Thursday arrived. The Strait is still closed. Oil rose to $83. The Dow dropped more than 450 points — snapping a five-day winning streak that included three consecutive record closes. The S&P slipped 0.2%. The Nasdaq fell 0.1%. SanDisk crashed 10% despite beating its fourth-quarter estimates. SpaceX popped in the morning as the first lock-up expired on 911 million shares, then gave back its gains as insiders sold. The market added 2,500 points to the Dow in four sessions on the promise of a deal. Thursday it gave back 450 of them because the deal is still a promise. Iran says a temporary shipping agreement with Oman is in its "final stages." The market has heard that before.
Pullback after a sprint. The Dow fell more than 450 points — roughly 0.9% — to about 53,870, ending the longest winning streak of the summer. The five-day run included three consecutive all-time highs. The S&P slipped 0.2% to around 7,706 after hitting a record on Tuesday. The Nasdaq dipped 0.1% to about 26,346. The market didn't crash. It paused — and the pause came because the headline that powered the rally didn't deliver on schedule.
| The Numbers I Circled | At the close, August 6 · Day change |
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| S&P 500 | ~7,706 | −0.2% |
| Dow Jones | ~53,870 | −450 pts |
| Nasdaq | ~26,346 | −0.1% |
| S&P 500 Sectors | Day change |
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| Energy | | +0.8% |
| Utilities | | +0.5% |
| Consumer Staples | | +0.3% |
| Health Care | | +0.2% |
| Real Estate | | +0.1% |
| Materials | | −0.2% |
| Comm. Services | | −0.4% |
| Consumer Disc. | | −0.6% |
| Financials | | −0.8% |
| Industrials | | −1.0% |
| Info. Technology | | −1.2% |
| | Notable Gainers | Day change |
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The Hormuz deal is close. Iran confirmed it has reached an agreement with Oman for a temporary shipping route — inbound vessels would transit Iran's territorial waters while outbound ships would sail through Oman's waters. Axios reported the U.S., Iran, and Oman are working on an interim framework. Deutsche Bank's Jim Reid said the focus has moved beyond whether a deal can be struck and toward its final shape — the sticking points are whether Iran could eventually charge ships for passage and how long the temporary arrangement would last. That's progress. But progress isn't a signed deal, and the market had priced a signed deal by Wednesday.
SanDisk fell about 10% after posting fourth-quarter results that beat estimates but disappointed on guidance. Western Digital sold off in sympathy. The "beat and sell" pattern from July is alive in the storage sector: the AI hardware demand is there, but the market wants more than a beat — it wants a blowout with guidance to match.
SpaceX gained in early trading as the first lock-up expired, briefly recovering some of Wednesday's 13% selloff. Then it faded as the 911.5 million newly eligible shares met the open market. The lock-up worked exactly the way lock-ups work: insiders who could sell, did. Elon Musk's personal shares remain locked until June 2027. Oil rose to $83 on Brent — a reversal of the week's declines — as the Strait deal remained unsigned. The 10-year yield held at 4.62%. FedWatch priced a 54.9% chance of a September hike, down from 58.9% on Wednesday.
What The Market Is Pricing In
When a market rallies on a promise — "deal today or tomorrow" — and the promise doesn't arrive on time, the pullback comes in installments. The first installment was Thursday: 450 points off the Dow. Oil ticking higher. The Strait still closed. The market doesn't give back the full rally because the deal is still plausible. But it trims the position because the timeline slipped.
On Wall Street they call this buying the expectation and selling the delay. The Hormuz rally added 2,500 points to the Dow in four sessions — Monday's ISM beat, Tuesday's Caterpillar and Palantir blowouts, back-to-back record closes. All of it priced on the assumption that the Strait would reopen by midweek and oil would fall to $70. The ISM and the earnings were real. But the Strait part — the part that moves oil, inflation, and the Fed — is still in "final stages." And "final stages" in the Middle East can mean days or weeks.
The Dow gave back 450 points after rallying 2,500 in four days, and the market is telling you the deal is priced in but the delivery isn't — which means every day the Strait stays closed, the rally loses a little more of its foundation, because $83 oil on Thursday is not the $70 oil the Monday morning rally assumed. Deutsche Bank is right: the question isn't whether a deal happens. It's what shape it takes and how long it lasts. A temporary arrangement with Iran controlling inbound traffic and Oman handling outbound is not freedom of navigation. It's managed passage — and managed passage comes with friction, delays, and the possibility that Iran decides the management isn't working. The market needs a deal that brings certainty. What it's getting is a negotiation that brings headlines.
In late 2019, the Phase One trade deal between the U.S. and China followed the same pattern. Trump said "deal very close" at least four times between October and December. The market rallied each time — then pulled back 1% to 2% when the deadline passed. The actual signing didn't happen until January 15, 2020 — three months after the first "very close" headline. The Hormuz talks are following the same playbook: "today or tomorrow" becomes "tomorrow or the next day" becomes next week. The deal comes eventually. But the market pays rent for every day it waits.
Three things I'm watching tomorrow:
01 — July nonfarm payrolls Friday August 7
The number that determines whether the Dow's record streak was built on a strong economy or just a deal headline. Consensus: 86,000 jobs, up from 57,000 in June. The ISM's employment component expanded for the first time in 33 months on Monday — if the payrolls confirm that with solid hiring and steady wages, the economic case for the rally holds even if the Hormuz deal takes another week. If payrolls miss badly — below 50,000 — the market has to ask whether the GDP miss at 1.5% was the start of a slowdown, and the Dow's pullback goes from 450 points to something bigger.
02 — Does oil hold below $85 or retest $90?
Brent rose to $83 on Thursday — up from $79 on Tuesday. Every day the Strait deal doesn't land, oil drifts higher. If Brent stays below $85 through Friday, the inflation story is manageable and the July CPI coming in two weeks won't shock. If it pushes back above $90 on a weekend without a deal, the entire Monday-Tuesday rally unwinds and the market goes back to pricing the July playbook: oil up, inflation up, hike odds up.
03 — Airbnb and Lyft earnings tonight
The consumer-spending check. Airbnb tells you whether travel demand held through $4 gas and a war in the Gulf. Lyft tells you whether urban mobility spending is steady. Both companies are sensitive to discretionary consumer behavior — if the consumer pulled back in Q2 despite low unemployment, it shows up here first. Strong results extend the "economy is fine" thesis. Weak results give the bears a consumer-cracking narrative heading into the jobs number.
The Dow rallied 2,500 points on a deal, an ISM beat, and blowout earnings. Thursday it gave back 450 because the deal hasn't arrived. Tomorrow the payrolls tell you whether the economy underneath the headlines is as strong as the market assumed this week. The deal will come. The question is whether the economy holds up while it waits.
That's it for today. See you tomorrow after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
