ProShares UltraShort Bloomberg Crude Oil (SCO) experienced a significant 6.80% decline during the night session. As an exchange-traded fund designed to move inversely to the daily performance of Bloomberg Crude Oil, its sharp drop corresponds directly to a substantial rise in crude oil prices.

The plunge was driven by escalating geopolitical tensions in the Middle East, which reignited supply concerns and sent oil benchmarks soaring. U.S. President Donald Trump's rejection of Iran's latest peace proposal, which he termed "completely unacceptable," dimmed hopes for a quick resolution to the conflict that has effectively blockaded the critical Strait of Hormuz. This key chokepoint handles 20-30% of global oil and gas transportation, and its prolonged disruption is seen as creating the largest supply-side shock in history, pushing Brent crude futures violently higher toward $105 per barrel.

Market focus shifted from the recent AI investment frenzy to the "NACHO" (Not A Chance Hormuz Opens) trading theme, as traders began pricing in the risk of a long-term strait blockade. Analysts from Citigroup warned that even an orderly reopening would not lead to an immediate supply recovery, and Saudi Aramco's CEO suggested the oil market might not normalize until 2027 if restrictions persist. This surge in oil prices, which pressures inverse ETFs like SCO, also raises broader inflation concerns, potentially constraining central banks' ability to cut interest rates.