The buy orders began to accumulate before it was even noon in New York. The trading floors appeared almost joyful for a few hours after President Trump announced a two-week ceasefire with Iran on April 8. The Dow increased by 1,325 points. The S&P 500 saw a 2.5% increase. WTI crude fell 16.4% in a single session, the largest one-day decline since 2020, and oil fell so quickly that it triggered automated alerts across brokerage desks. JPMorgan analysts wrote, somewhat ecstatically, that “euphoria” was reappearing in the markets. It was practically audible.
After a week, the majority of that emotion vanished. Relief typically exits a room quietly, rather than dramatically or with another crash. Due to Israel’s attacks on Lebanon, traffic in the Strait of Hormuz has been suspended, according to a semi-official Iranian outlet. The speaker of Iran’s parliament claimed that the United States had broken the ceasefire on X. A cargo ship flying the Iranian flag was seized by the White House. Iran closed the Strait once more by the weekend of April 18. The price of oil recovered to $95. For just the second time in fourteen sessions, the S&P fell from its all-time high.
Traders have begun to notice a pattern here, and it’s not a pleasant one. After the announcement, the market rallies and waits for the announcement to have some significance. The day of the ceasefire itself saw just four tankers pass through Hormuz, the fewest of the week. The shippers were not persuaded. They most definitely weren’t maritime insurers. Neil Roberts of the Lloyd’s Market Association put it bluntly: commercial trade into the Gulf would not simply resume on its own, regardless of whether this was a pause or a peace. It turns out that the headlines move more quickly than the paperwork.
It’s odd how divided the response has been. After the ceasefire window, tech stocks—particularly those related to AI infrastructure—looked completely different. In just one week, Marvell Technology increased by about 20%. With Nvidia’s $2 billion investment still in effect and a CEO publicly informing investors that the company was sold out through the end of 2027, Lumentum, which manufactures the photonic components that join GPU clusters inside data centers, emerged from the dispute. Strangely, rather than upsetting the AI narrative, the Iran War seemed to clarify it. Investors determined which names were simply being carried by the tide and which had structural demand.
Cruise lines and airlines, however, present a different picture. On April 20, Norwegian Cruise experienced a 4.3% decline. After months of fuel costs eating away at margins, American Airlines saw a 4.8% decline. You can see who has been bearing the brunt of this conflict outside of the Pakistani exchanges, which saw a 9% increase in just one day due to ceasefire relief: the high-fuel-bill companies, the importers from emerging markets, and the businesses that can’t simply reprice overnight. It’s difficult to ignore the fact that the winners and losers of the rally have nothing to do with the ceasefire. They deal with the businesses that the war advanced and those that it hindered.
In the meantime, the Federal Reserve is in a situation where all of the options appear to be incorrect. In March, rates remained unchanged. At Harvard, Powell came across as cautiously dovish. However, the Fed is essentially waiting on Tehran as well, with Brent still above $85 and a ceasefire that may or may not last past its expiration on Tuesday at 8 p.m. The one bright spot has been corporate earnings; almost nine out of ten S&P 500 companies that have reported so far have exceeded expectations, and Michael Wilson of Morgan Stanley stated that despite geopolitics, the earnings recovery is still going strong. That is true. Additionally, it’s the kind of thing that is quoted just before it ceases to be true.
As this develops, it seems that markets are now more adept at pricing war than peace. Within hours, every oil spike and new Gulf news story is taken in. However, a real, functional ceasefire that allows ships to move, insurers to write policies, and the Fed to make cuts still needs belief, which the market is unable to produce. We’ll find out how much of that remains on Wednesday night when the current truce expires.
