Breaking "Black Swan"! Hormuz, big news!

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【Guide】Trump intentionally creates a “Black Swan,” devastating the global markets

China Fund Reporter Taylor

Brothers and sisters, how are you? Today’s market needs no words; Trump not only draws candlestick charts but also personally creates “Black Swans,” leaving the global markets in chaos.

Even analysts are about to break down.

Let’s painfully review today’s market.

Global Plunge

On April 2nd, oil prices surged, stocks and bonds both fell. Previously, Trump warned that the U.S. would “extremely forcefully” strike Iran within the next two to three weeks, breaking the market’s expectation that the five-week-long Middle East conflict was nearing an end.

Brent crude oil jumped 6.6%, approaching $108 per barrel. Due to ongoing war, the Strait of Hormuz— a key energy transportation route in the Middle East— is effectively closed, further tightening supply. Trump stated that once hostilities ease, the passage would “naturally” reopen, but gave no details or clear timeline.

After Trump’s speech, the stock market retreated, interrupting the nascent global rebound. Market concerns are that if the war prolongs, oil prices will rise further and hinder economic growth.

In the A-shares market, the three major indices all declined. By the close, the Shanghai Composite fell 0.74%, the Shenzhen Component dropped 1.6%, and the ChiNext Index declined 2.31%.

A total of 1,052 stocks rose, with 32 hitting the daily limit, while 4,378 stocks fell.

Oil and gas stocks defied the trend and strengthened.

Pharmaceutical stocks repeatedly active.

On the downside, precious metal sectors declined, with Xiaocheng Technology dropping over 7%.

Computing power leasing concept stocks adjusted.

After European markets opened, they collectively plunged.

Asia-Pacific markets all plummeted.

U.S. major stock indices pre-market tumbled over 1%.

Crude oil rose over 6%.

Latest news on the Strait of Hormuz

Meanwhile, the UAE called on the United Nations to authorize a series of measures, including the use of force, to reopen the Strait of Hormuz. Currently, Gulf countries are pressuring Iran to restore free passage through this critical global energy route.

In a letter to the UN Secretary-General and the rotating President of the Security Council, the UAE Permanent Representative to the UN requested the Security Council to take “immediate action” to “ensure navigation safety and freedom of navigation in the Strait of Hormuz and its surrounding waters.”

The UAE cited Chapter VII of the United Nations Charter, which allows the Security Council to authorize the use of force or other measures— including economic sanctions and severing diplomatic relations— in response to threats to peace or acts of aggression.

This resolution itself does not establish a new UN mission, but if approved, it would provide diplomatic backing for Gulf countries to participate in military actions or form naval task forces to break Iran’s control of the strait, or patrol and maintain order after the conflict ends.

Additionally, the UK will host an online meeting, gathering foreign ministers from about 35 countries including the UAE, France, Germany, Italy, Canada, and Japan, to discuss plans to restore freedom of navigation through the strait. The U.S. is not expected to attend.

It is reported that this multilateral coordination led by the UK will focus on three paths: diplomatic, economic, and military. Currently, the emphasis remains on diplomatic efforts— coordinating with countries maintaining communication channels with Tehran to push for negotiations; if diplomatic efforts fail, relevant countries will consider economic measures against Iran’s oil and shipping industries.

An expert on UN affairs from the International Crisis Group said: “Even in this highly turbulent period, many countries still value obtaining UN authorization as a ‘protective umbrella’ to legitimize the use of force.”

Currently, the UAE is the only Gulf Arab country explicitly willing to join naval forces, assist in reopening the Strait of Hormuz, or escort commercial ships.

Last month, the UN Security Council condemned Iran’s attacks on neighboring Gulf countries and called on Iran to cease hostilities and restore freedom of navigation in the Strait of Hormuz.

Meanwhile, Bahrain, a non-permanent member of the Security Council, is pushing a new resolution to authorize the formation of a naval task force to reopen the strait.

The UN Security Council typically authorizes various actions under Chapter VII, including allowing peacekeeping forces to use force to protect civilians. This clause also provides a legal basis for countries to deploy military force with UN “endorsement.”

Historically, U.S. presidents have often waited for Chapter VII authorization before launching military operations or used it as a basis for legitimacy.