Closing Recap
Wall Street’s unprecedented V-shaped recovery officially entered the history books on Wednesday. Ignoring the reality of a burning Middle East, the Nasdaq surged 1.59% to notch its 11th consecutive positive close – its longest winning streak since 2020 – while the S&P 500 ground 0.80% higher to secure a fresh all-time closing record. This staggering $6.6 Trillion market cap expansion over the last 12 trading days is being fueled by a lethal combination of algorithmic short-covering, an explosion in retail call option buying, and the market’s desperate belief that a U.S.-Iran diplomatic breakthrough is imminent. While equities partied, the U.S. Dollar dumped to six-week lows and Treasury yields slipped, forcing precious metals lower.
However, the physical reality remains grim: the Strait of Hormuz is entering its 8th week of de-facto closure, and oil prices remain stubbornly elevated above $91 as the disconnect between the «Paper Market» optimism and the «Physical Market» danger reaches extreme levels. Precious metals saw some profit-taking, with gold slipping below $4,850, while Bitcoin bounced back above $75,000.
Key Takeaways
- Nasdaq’s 11-Day Miracle: The Nasdaq completed its 11th straight green day, adding over 13% during the streak. The «Magnificent 7» led the charge, with semiconductor indices hitting all-time highs. Historically, an 11-day streak has led to positive returns 100% of the time over the following year.
- S&P 500 Hits All-Time High: In the middle of an active war that has crippled global shipping, the S&P 500 closed at a record 7,022. The index has rallied 11% from its recent lows, driven by a massive unwind of bearish positioning.
- The Options Casino Reopens: U.S. call option volumes exploded to 47 million contracts per day (+75% this month), driving the put/call ratio down to 0.68. The «FOMO» (Fear Of Missing Out) has completely overtaken the «Fear of War.»
- Oil Prices Cool, But Remain Elevated: WTI and Brent crude futures slipped on the day, but front-month contracts are still on track for record monthly gains due to the ongoing disruptions in the Strait of Hormuz.
- Dollar Sinks to Multi-Week Lows: The U.S. Dollar Index (DXY) fell for a sixth straight day, its longest losing streak since mid-January, as the market prices in a more dovish Fed and a potential resolution to the Iran conflict.
- Gold and Silver See Profit-Taking: Gold slipped $26.90 to settle at $4,823. The collapse of the U.S. Dollar was not enough to save the yellow metal, as the extreme «Risk-On» equity rally drained safe-haven capital.
- Bitcoin Recovers on Regulatory Hopes: The crypto market found some footing, with Bitcoin rising past $75,000, bolstered by a new joint regulatory initiative from the SEC and CFTC and a massive $1.28B purchase by MicroStrategy.
- Trump Attacks Powell (Again): President Trump threatened to fire Fed Chair Powell if he «doesn’t leave on time,» and stated rates will go lower when Kevin Warsh takes over. This political pressure is accelerating the Dollar’s decline.
- U.S. Oil Exports Hit Record: The EIA reported total U.S. oil exports jumped to a record high, as the U.S. leverages its energy independence to supply a desperate global market locked out of the Middle East.
- Market Breadth Remains Strong: Despite the recent volatility, market breadth is surprisingly robust, with nearly 20% of S&P 500 stocks hitting new 52-week highs, a historically bullish signal.
- CTAs Unleash the Kraken: Systematic trend-following funds (CTAs) are projected to buy up to $130 Billion in U.S. equities over the next month if the market stays flat or rises. This mechanical buying is providing a massive, price-insensitive floor under the market.
- Yen Intervention Jawboning: Japan’s Finance Minister Katayama dropped the «B-word» (Bessent), confirming she is coordinating with the U.S. Treasury to combat oil-driven Yen volatility. This verbal intervention successfully pushed USD/JPY back below 159.00.
- China Q1 GDP Beats, but Property Slump Continues: China’s economy grew at a faster-than-expected 5.0% pace in the first quarter, though weakness in the property sector and the looming impact of the oil shock remain significant headwinds.
Market Overview
The market is suffering from severe cognitive dissonance. We have a literal war disrupting 20% of the world’s oil supply, yet the S&P 500 is at all-time highs and the VIX is crashing. This is entirely a function of market mechanics overriding macro fundamentals. The record short positioning from early March is being violently unwound, forcing prices higher regardless of the news. Wednesday’s session demonstrated the market’s remarkable ability to compartmentalize risk. Despite the ongoing, severe disruption to global energy supplies caused by the U.S.-Iran conflict and the effective closure of the Strait of Hormuz, equities pushed higher. The narrative driving the market appears to be a combination of «this too shall pass» optimism regarding the geopolitical situation and a belief that the U.S. economy is strong enough to withstand the current energy shock without derailing into a deep recession.
| Index | Up/Down | % | Last |
| DJ Industrials | 299.89 | 0.63% | 48,216 |
| S&P 500 | 69.09 | 1.01% | 6,885 |
| Nasdaq | 280.84 | 1.23% | 23,183 |
| Russell 2000 | 39.89 | 1.52% | 2,670 |
The fact that a significant portion of the S&P 500 is making new highs suggests that investors are looking past the immediate headline risks. However, the bond market is painting a slightly different picture, with Treasury yields remaining elevated as the reality of stickier inflation sets in. The U.S. dollar’s continued slide is also a key factor, providing a tailwind for multinational earnings and helping to stabilize risk assets. While the market’s current resilience is impressive, the situation in the Middle East remains highly volatile, and the risk of a sudden, sharp reversal remains elevated if the conflict escalates or if the economic data begins to show serious signs of stagflation.
Economic Calendar
Today’s focus is on the European Central Bank and U.S. labor market data.
Data Released Yesterday / Overnight:
- UK Feb GDP & Retail Sales: Both beat expectations, with monthly GDP at +0.5% (vs. +0.1% exp) and retail sales jumping +1.8% m/m, highlighting unexpected resilience in the UK economy.
- China Q1 GDP: Stronger than expected at +5.0% y/y (vs. +4.8% exp), though this largely pre-dates the full impact of the oil shock.
- Australian Employment (Mar): Solid report with +17.9K jobs added and the unemployment rate steady at 4.3%, keeping the RBA firmly on a hawkish footing.
Today’s Economic Calendar:
- European Session: Final Eurozone CPI (Mar). The headline is expected at 2.5% y/y, with the core rate at 2.3%. The focus will be on the ECB’s interpretation of the energy-driven inflation spike.
- 12:00 GMT – Eurozone Final CPI (Mar). (Expected to confirm the energy-driven spike).
- U.S. Session: The main highlight is the weekly U.S. Jobless Claims report and the Philadelphia Fed Manufacturing Survey.
- 13:30 GMT (9:30 ET) – US Initial Jobless Claims. Est: 219k.
- 13:30 GMT – Philly Fed Manufacturing Index. Est: 18.1.
- Central Bank Speakers: Massive slate of Fed (Williams, Miran) and ECB (Schnabel, Nagel, Lane) speakers throughout the day.
Asset Class Spotlight: FX, Commodities, Bonds & Crypto
After a period of extreme volatility, the oil market is stabilizing but tense. WTI Crude settled at $91.29 after a massive EIA gasoline inventory draw (-6.33M barrels) offset a crude build. Brent is holding near $95, though prices remain highly elevated compared to pre-war levels. Precious metals saw some profit-taking, with gold slipping to $4,823.60 and silver tumbling, losing its safe-haven luster as the S&P 500 hit record highs – as the dramatic drop in oil prices immediately reduced near-term inflation expectations and safe-haven demand.
| Asset | Up/Down | Unit / % Change | Last |
| WTI Crude | -18.54 | -16.41% | 94.41 |
| Brent Crude | -14.52 | -14.70% | 94.75 |
| Gold | -26.90 | -0.54% | 4,823.60 |
| EUR/USD | 0.0065 | 0.56% | 1.1659 |
| USD/JPY | -1.00 | -0.63% | 158.61 |
| 10-Year Note Yield | -0.052 | -1.20% | 4.291% |
The U.S. dollar continues its slide, providing a significant boost to the euro and the pound.
- EUR/USD: The pair is extending its winning streak to 8 consecutive positive closes, climbing towards 1.1800 hitting levels not seen since the war began. The «Trump Truce» optimism is crashing the Dollar. The euro is benefiting from broad dollar weakness and hopes that a diplomatic resolution in the Middle East will avert a severe energy crisis in Europe. Options Expiry: A massive $1.7 Billion option expiry at 1.1700 is now acting as a support floor, preventing any major pullbacks.
- GBP/USD: The pound surged on the back of much stronger-than-expected UK GDP and retail sales data, pushing the pair above the 1.3550 level. The resilient domestic economy is complicating the BoE’s rate-cutting path.
- USD/JPY: The pair is trading with a negative bias near 158.60. The yen is finding some support from the weaker dollar and increasingly urgent intervention warnings from Japanese Finance Minister Katayama. The Yen strengthened (pair down) as Finance Minister Katayama explicitly name-dropped US Treasury Secretary Bessent, signaling coordinated G7 awareness of the Yen’s weakness. The 160.00 level remains a heavily defended fortress.
- AUD/USD: China Boost (0.7139). The Aussie is the strongest major currency today, boosted by the China GDP beat and the tight Australian jobs data, which keeps the RBA on a hawkish footing.
Cryptocurrencies: The crypto market found some relief from the broader risk-on mood. Bitcoin rebounded over 3% to reclaim the $75,000 level, tracking the strong performance in tech stocks and finding support from a new joint regulatory initiative from the SEC and CFTC, as well as a massive $1.28 billion purchase by MicroStrategy.
Treasuries: U.S. Treasury yields fell sharply as the plunge in oil prices immediately reduced inflation expectations. The benchmark 10-year yield dropped over 5 basis points to 4.291%, a significant reversal that provided much-needed relief for equity markets.
Looking Ahead
We are entering the «Euphoria Phase.» When bad news (Hormuz closed, inflation rising) is ignored and good news (unconfirmed peace talks) is bought aggressively, the market is historically vulnerable to a sudden shock. Today’s trading will continue to be heavily influenced by headlines from the Middle East. The market is desperate for clarity on the conflicting reports regarding U.S.-Iran negotiations.
The release of the U.S. Jobless Claims and Philly Fed data will also be closely watched for any signs that the recent energy shock is beginning to impact the real economy. With the market heavily reliant on the «soft landing» narrative, any data that challenges this view could trigger a swift reversal in the recent equity rally. Traders should remain highly vigilant in this fragile and news-driven environment.
What to Watch Today
- The «Day 12» Curse: The Nasdaq has only had three 11-day winning streaks on record. Does it make it 12? Watch for profit-taking in the final hour of trading as institutions lock in the historic V-shaped gains.
- US-Iran Headlines: Axios reports a «framework deal» is close. If Iran officially denies this (again), the $6.6 Trillion equity rally will violently reverse.
- Philly Fed Prices Paid (8:30 ET): Last month this printed at 36.6. If it spikes (reflecting the oil shock), the bond market will sell off, pushing the 10-year yield toward 4.35%.
- USD/JPY & US Yields: If US data is strong, the Dollar will bounce. Watch 159.50 on USD/JPY. If it pushes higher, Katayama will likely escalate her verbal intervention.