MW The ceasefire mirage: Here's why stock-market bulls may already be getting ahead of themselves
By Barbara Kollmeyer
Chasing the S&P 500 higher at these levels is not advisable, says Goldman senior trader
Cargo ships and tankers are seen off coast city of Fujairah, in the Strait of Hormuz in the northern Emirate on Feb. 25. Following the Iran-U.S. cease-fire, market attention will now focus on movement in the war-blocked waterway.
An 11th hour U.S.-Iran cease-fire has triggered a spectacular rally for stocks and the opposite for oil prices.
That's even as a lasting deal still needs to be agreed, with an estimated 800- plus stranded vessels in the Persian Gulf.
The worry for some is that the sharp stock rebound may be getting ahead of itself. In that camp is a senior trader at Goldman Sachs, Rich Privorotsky, who sees a major risk ahead as the market tries to "move past Iran."
In a note to clients, Privorotsky cautioned "this isn't a great level to chase," with regards to the S&P 500 SPX. He noted that the index had already recouped two-thirds of losses incurred when the conflict began in late February; from its most recent record high in January, the S&P 500 was down about 5%.
Read: Then and now: Comparing where the S&P 500, crude and other markets are to the prewar situation
Commenting that "cease-fires are fragile by definition," Privorotsky said strikes have been seen overnight across the Gulf despite the cease-fire. "You can hand-wave some of that as lag effects, but the disagreement around proxies (e.g. Lebanon with Israel) leaves plenty of scope for this to break," he said.
The market will ultimately judge "actual flows through the Strait over time," he said. "I struggle to see new highs for equities, but positioning still argues for forced buying to run its course first."
Goldman traders pointed out late last month that momentum-chasing commodity trading advisers (CTAs) sold nearly $55 billion in U.S. stocks from early March, with asset managers cutting $51 billion in S&P 500 positioning.
Privorotsky said those CTAs will now start buying and that should continue. Falling volatility - the CBOE Volatility Index VIX is tumbling sharply - is also set to trigger buy signals for some computerized trading programs.
What matters now is whether oil comes down and stays there, taking the pressure off inflation and lessening the need for interest-rate hikes, said Privorotsky.
Read: What the market is now pricing for Fed and global central bank interest rates after the cease-fire
The pessimistic view on the cease-fire is that "underlying positions remain far apart." As for oil tankers getting through the Strait of Hormuz, he focused on a social-media post from Iranian Foreign Minister Abbas Araghchi, saying safe passage through the strait must be coordinated with Iran military and subject to "technical limitations." This means tanker movement will be extremely controlled, subject to Iran's "toll booth."
That should keep crude holding in the $90-a-barrel level, rather than pulling back into ballpark of $80.
His advice came just after Goldman strategists told investors that a generational buying moment has arrived for tech stocks.
The markets
Dow futures (YM00) indicate a 1,000-point-plus rally ahead, with S&P 500 and Nasdaq futures (ES00)( NQ00) also soaring. Oil prices (CL.1) (BRN00) are sinking, 10-year Treasury yields BX:TMUBMUSD10Yand the dollar DXY are dropping and gold (GC00) is higher.
Key asset performance Last 5d 1m YTD 1y S&P 500 6616.85 1.35% -2.43% -3.34% 32.79% Nasdaq Composite 22,017.85 1.98% -2.99% -5.27% 44.21% 10-year Treasury 4.249 -7.30 1.80 7.70 -10.70 Gold 4825.2 0.85% -6.92% 11.38% 55.66% Oil 94.49 -4.44% 6.88% 64.59% 50.65% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
President Donald Trump announced a two-week-long cease-fire deal with Iran shortly before his deadline and dramatic threat of attacks expired. Iran said it would be possible for ships to pass safely through the Strait of Hormuz during that period.
Levi's $(LEVI)$ stock is soaring after the denim king lifted its sales and profit outlook, and cited a boost from the TV series "Love Story."
San Francisco Fed President Mary Daly is due to speak at 1:05 p.m. The minutes of the Fed's May Federal Open Market Committee meeting are due at 2 p.m.
Best of the web
Iranian hackers are targeting US energy and water sectors, federal agencies warn.
My quest to solve bitcoin's great mystery.
Democrats who lost a special election in Georgia had one of their best election nights in recent memory.
The chart
The chart shows the dramatic plunge for West Texas Intermediate crude as the cease-fire was announced late Tuesday. Down around 15%, U.S. crude (CL.1) is poised for its biggest one-day percentage drop since a 24% tumble in late April 2020, according to Dow Jones Market Data. Year to date, though, crude is still up around 65%.
Top tickers
These were the top-searched tickers on MarketWatch as of 6 a.m.:
Ticker Security name NVDA Nvidia TSLA Tesla GME GameStop AMZN Amazon MSFT Microsoft MU Micron AAPL Apple TSM Taiwan Semiconductor Manufacturing AMD Advanced Micro Devices META Meta PLTR Palantir
Random reads
Lola the parrot is home after airport charm offense.
Toddler tantrum? Just shout this name.
The viral fried chicken at Yankee Stadium is a sellout.
BEYOND THE NEWS
MarketWatch Picks: I'm 66 and have $190K in my 401(k) and get $8K a month in income. I owe $150K on my house. Can I retire by year-end?
-Barbara Kollmeyer
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 08, 2026 06:36 ET (10:36 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.