US Stocks Near Recovering from Iran War Dip, Oil Holds Near Highs on Hormuz Risk

BlockBeats News, April 10th, according to CNBC, the US stock market is nearing a recovery from the fall caused by the "Iran War," with investors increasingly betting that the geopolitical impact will be short-lived. However, the oil market remains more cautious. The two-week ceasefire agreement announced on Tuesday night drove a stock market rebound, triggering a round of "relief rally," helping the stock indexes recover more than two-thirds of their losses since the conflict erupted in late February. The S&P 500 index is currently less than 1% below its pre-war level (6,878.88 points).

At the same time, due to ongoing concerns about Middle East supply disruptions, oil prices remain at high levels. Barclays strategists stated in a client report, "The stock market's expectation of a 'good outcome' is significantly higher than the oil market, and stock index performance has clearly outperformed the pullback in oil futures." They pointed out that this rebound was partly driven by a "strong short-covering rally," as short sellers were forced to close out their positions as prices rose.

Barclays also stated that investor confidence in President Trump seeking an "exit strategy" to avoid greater economic losses is increasing. "In our view, further de-escalation remains the most reasonable outcome, as Trump needs an exit plan to address the escalating political and economic costs," the bank noted. Citigroup strategists also expressed a similar view, believing that Tuesday's ceasefire has shifted market sentiment. "Despite lingering uncertainties, the US-Iran finding an 'exit strategy' itself is a positive signal, clearly the path to an agreement will not be a straight line. Investors have significantly reduced their risk exposure, and if the ceasefire holds, they may be enticed to re-enter the market, indicating that the rebound may still have momentum."

By contrast, the oil market remains in a more cautious pricing environment, as tensions around the Strait of Hormuz persist, with key shipping lanes still largely closed. May-delivery US West Texas Intermediate (WTI) crude oil futures traded close to $100 per barrel on Friday, compared to around $67 before the war broke out.