Higher oil prices from Strait of Hormuz closure push inflation to 3.56%, threatening tech valuations

Monthly inflation has risen from 2.4% in February to 3.56% in April, driven by a sharp increase in crude oil prices after Iran closed the Strait of Hormuz in response to U.S. and Israeli military actions. The closure disrupted global oil exports, triggering one of the largest energy supply shocks in modern history. Higher transportation and production costs have rippled through the economy, and inflation is now projected to exceed 4% according to the Cleveland Fed. That outlook has upended expectations for Federal Reserve rate cuts. The stock market entered 2026 with its second-highest valuation in 155 years, priced on the assumption of continued monetary easing. With the Federal Open Market Committee now unlikely to lower interest rates, sectors dependent on cheap capital—especially artificial intelligence and technology—face mounting valuation pressure.