Closing Recap
U.S. stocks extended their winning streak to seven days on Thursday – its longest since October 2025, rebounding from early morning weakness to finish broadly higher as investors clung to hopes for a lasting ceasefire in the Middle East. The Nasdaq led the gains with a 0.83% advance, while the Dow Jones Industrial Average turned positive for the year. U.S. equities overcame early morning jitters to close broadly higher, driven by President Trump’s intervention, which helped preserve the fragile US-Iran ceasefire narrative. The Dow Jones jumped over 275 points to turn positive for the year, while the S&P 500 added 0.62% and the Nasdaq surged 0.83%. However, the market’s optimism is starkly contradicted by the reality on the ground: Iran denied reports that peace talks were scheduled for Saturday in Pakistan, and energy markets remain incredibly tight.
WTI Crude spiked nearly 4% to settle near $98, signaling that the oil market does not believe the geopolitical crisis is resolving. Despite the rising energy costs, traders rushed to cover historic short positions in U.S. equities, fueling a massive short-squeeze that added $4.5 Trillion in market cap to the S&P 500 over the last eight sessions. While the U.S. dollar retreated and Treasury yields slipped. Gold and silver continued their upward march, and Bitcoin failed to break the key $73,000 resistance level.
Key Takeaways
- 7-Day Equity Win Streak, Longest Win Streak Since Oct 2025: U.S. equities rallied for a 7th straight day, adding $4.5 trillion in market cap since the March 30th low, driven by hopes for a diplomatic resolution to the U.S.-Iran conflict.
- Trump Pushes for De-escalation: Reports that President Trump urged Israel to scale back strikes in Lebanon to aid Iran negotiations provided a significant boost to market sentiment.
- Hot PPI Underscores Inflation Risk: The February PPI report came in hotter than expected at +3.4% y/y, a stark reminder of the inflationary consequences of the recent spike in energy prices.
- Hedge Funds Scramble to Cover Shorts: Hedge funds are unwinding short positions in U.S. equities at the fastest pace since the March 2020 rebound, fueling a massive short squeeze that is propelling the market higher.
- Oil Rips Higher Again: The energy market is ignoring the equity euphoria. WTI Crude surged 3.66% to $97.87, and Brent rose to $95.92. Shippers remain terrified of the Strait of Hormuz, and Iran’s denial of the peace talks added fresh supply fears.
- Gold and Silver Extend Gains: Gold Defies the Dollar: Gold remains incredibly resilient, rising $40.80 (+0.85%) to settle at $4,818 despite a stronger U.S. Dollar and rising inflation fears. The metal is acting as the ultimate geopolitical and fiat hedge.
- Yen on Japan Intervention “Code Red”: Japanese Finance Minister Katayama escalated verbal warnings, stating the government is ready to take “decisive action on all fronts” against speculative moves in FX and oil. USD/JPY is hovering near the 160.00 danger zone.
- Warsh Fed Confirmation Delayed: The Senate Banking Committee delayed Kevin Warsh’s confirmation hearing due to missing paperwork. This ensures Jerome Powell remains Fed Chair in a holdover role for the foreseeable future, removing immediate policy uncertainty.
- Bitcoin Struggles at Resistance: BTC failed to break $73,000 for the third time since the ceasefire began, slipping to $67,268. A $1.9 Billion options expiry today adds mechanical friction, but the failure to break out despite the massive equity rally is a bearish divergence.
- Smart Money Confidence Spike: The “Smart Money / Dumb Money” confidence spread crossed above 0.25 after 225 days of suppression. Historically, this rare signal has a 100% win rate for positive S&P 500 returns over the following 12 months.
- Key U.S. CPI Data on Deck: The market is bracing for Friday’s crucial U.S. Consumer Price Index (CPI) report, which will be heavily scrutinized for the impact of surging energy costs.
Market Overview
Thursday’s trading session perfectly encapsulated the market’s current state of “cautious euphoria.” Equities are riding a massive wave of short-covering and relief that the immediate threat of a catastrophic, prolonged war in the Middle East appears to have been averted by the two-week ceasefire. This sentiment has been powerful enough to drive the S&P 500 to its longest winning streak in months, pushing indices back above key moving averages. The fact that the Dow has turned green for the year is a testament to the sheer velocity of this rebound. The market is entirely bifurcated. On one hand, the “Paper Market” (Equities) is celebrating a historic short-squeeze, driven by the technical unwinding of extreme bearish positioning and hopes of a diplomatic miracle. On the other hand, the “Physical Market” (Oil, Gold, Inflation Data) is screaming that a massive stagflationary shock is already underway.
| Index | Up/Down | % | Last |
| DJ Industrials | 275.88 | 0.58% | 48,185 |
| S&P 500 | 41.84 | 0.62% | 6,824 |
| Nasdaq | 187.42 | 0.83% | 22,822 |
| Russell 2000 | 15.86 | 0.61% | 2,636 |
However, beneath the surface of this rally, significant macroeconomic risks are festering. The hotter-than-expected February PPI report is a glaring warning sign that the inflationary damage from the recent spike in oil prices is already rippling through the economy. While Fed Chair Powell suggested the central bank might “look past” a temporary energy shock, he also cautioned that they cannot ignore a persistent rise in inflation expectations. With oil prices rebounding towards $100 a barrel as doubts emerge about the viability of the upcoming peace talks in Islamabad, the threat of stagflation is very real. The market is currently choosing to focus on the geopolitical positives, but Friday’s highly anticipated CPI report will be a critical test of this narrative.
If inflation proves stickier than expected, the current “Goldilocks” scenario could quickly unravel. If the weekend passes without a definitive US-Iran peace agreement, the $98 oil price will bleed into next week’s CPI report, potentially forcing the bond market to reprice Fed hikes and shattering the 7-day equity rally.
Economic Calendar
Today is CPI Day. This is the first inflation report that will fully capture the shockwaves of the Iran war and the Strait of Hormuz closure.
Data Released Yesterday / Overnight:
- U.S. PPI (Feb): Came in hot, with headline PPI rising +3.4% y/y (vs. +2.9% exp) and core PPI jumping +3.9% y/y (vs. +3.7% exp), highlighting building inflationary pressures.
- U.S. Weekly Jobless Claims: Climbed to 219,000, slightly above the 210,000 consensus, indicating a modest softening in the labor market.
- China CPI/PPI (Mar): CPI slowed to +1.0% y/y, while PPI unexpectedly turned positive at +0.5% y/y, ending a multi-year deflation streak due to the oil shock.
- Japan PPI (Mar): Accelerated to +2.6% y/y, further supporting the case for BoJ tightening.
Today’s Economic Calendar:
- European Session: An extremely light calendar.
- U.S. Session: The main event is the U.S. March Consumer Price Index (CPI) report. The headline rate is expected to surge to 3.4% y/y (from 2.4%), driven by the energy shock. The core rate is expected to tick up to 2.7% y/y. The Canadian Employment report is also due.
- 12:30 GMT (8:30 ET) – US CPI (Mar). Headline Est: 3.4% YoY. Core Est: 2.7% YoY. Expect a massive energy-driven spike. A hot Core print will terrify the bond market.
- 14:00 GMT (10:00 ET) – Univ. of Michigan Consumer Sentiment (Prelim). Watch the inflation expectations component.
- Multiple Central Bank Speakers (ECB’s de Guindos).
Asset Class Spotlight: FX, Commodities, Bonds & Crypto
The energy market remains highly sensitive to geopolitical headlines. Crude oil rebounded strongly, with WTI settling up 3.66% near $98 a barrel, as doubts emerged over Iran’s willingness to engage in the upcoming peace talks. Precious metals gained traction, with gold rising nearly 0.9% to settle at $4,818.00 and silver jumping 1.4%, as the weaker U.S. dollar and persistent inflation fears provided a solid bid. Silver gained 1.4% to $76.44.
| Asset | Up/Down | Unit / % Change | Last |
| WTI Crude | 3.46 | 3.66% | 97.87 |
| Brent Crude | 1.17 | 1.23% | 95.92 |
| Gold | 40.80 | 0.85% | 4,818.00 |
| EUR/USD | 0.0037 | 0.32% | 1.1701 |
| USD/JPY | 0.48 | 0.30% | 158.96 |
| 10-Year Note Yield | -0.004 | -0.09% | 4.287% |
The U.S. dollar is on the back foot as risk appetite improves and the market prices out aggressive Fed tightening.
- EUR/USD: The 1.1700 Ceiling (1.1701). The Euro is grinding higher, but it faces a massive $909 Million option expiry at 1.1700 for today’s 10 AM NY cut. The German final CPI confirmed a spike to 2.7% YoY, keeping the ECB hawkish and supporting the Euro against the Dollar.
- GBP/USD: The pound is holding steady around 1.3460, consolidating its recent gains. The currency is supported by the weaker dollar, but faces headwinds from domestic stagflation risks and expectations of BoE easing.
- USD/JPY: The pair is trading near 159.00. The yen remains under pressure due to the wide yield differential, but increasingly forceful intervention warnings from Japanese Finance Minister Katayama are capping the pair’s upside. The Yen is agonizingly close to 160.00. Japan’s Finance Minister is explicitly warning of action against FX and oil speculators. A hot US CPI print today will likely push the pair to 160.00, triggering a massive, unannounced BOJ/MOF intervention. Options Expiry: A $967M expiry at 160.00 will act as a battleground today.
Cryptocurrencies: Bitcoin remains trapped in a tight range, failing to break the $73,000 resistance level for the third time since the ceasefire was announced. The crypto market is struggling to find clear directional momentum, hovering near $70,800 as investors await the U.S. CPI data. U.S. Treasury yields slipped slightly as investors balanced the hot PPI data against the broader risk-on mood and dovish comments from Fed Chair Powell. The benchmark 10-year yield ended the day relatively flat near 4.287%.
Looking Ahead
Today is “CPI Day.” The release of the U.S. March Consumer Price Index will be the defining event of the session. A significant spike in headline inflation is widely expected due to the oil shock, but the market’s reaction will depend heavily on the core reading. If core inflation surprises to the upside, it could force the market to rapidly reprice Fed expectations, triggering a resurgence in the U.S. dollar and a sharp pullback in equities. Conversely, an in-line or soft report could be treated as confirmation that the inflation spike is temporary, providing further fuel for the ongoing short-covering rally. Traders should brace for extreme volatility around the 8:30 AM ET release.
What to Watch Today
- US CPI (8:30 ET): This is the main event. A hot number kills the “Soft Landing” narrative and forces the market to price in Fed rate hikes.
- Weekend Geopolitics: Iran denied the Islamabad talks. Will they launch a retaliatory strike over the weekend? Do not hold unhedged risk exposure into the close.
- USD/JPY 160.00: If CPI is hot, the Dollar will rip. The moment USD/JPY touches 160.00, expect a 200-pip drop as Japan intervenes.
- EUR/USD Option Pin: Watch the 1.1700 level into the 10:00 AM ET cut. The $909M expiry will keep volatility compressed until the options roll off.