USO is trading 6.2% down today as crude prices drop sharply after a pause in U.S.–Iran hostilities removed much of the recent geopolitical risk premium from oil.
- Brent crude has pulled back from above $100 per barrel to the high $80s, easing inflation concerns and Fed-hike fears.
- The decline in oil has triggered a risk-on equity rotation away from energy exposure, causing USO to fall even as broader market indices trade higher.
- Major U.S. indices are currently in a relief rally as the removal of geopolitical tension improves sentiment across non-energy sectors.