US-Iran ceasefire talk reversing the fear trade — buy the broad market rally as oil pressure fades
The U.S. and Iran appear to be closing in on a ceasefire deal, which could end the military escalation that spooked markets this week. Stocks are bouncing back and oil prices are giving up their war-driven gains as peace hopes rise.
Idea
Markets tanked earlier this week when the U.S. struck Iranian targets, sending oil prices up and stocks down. But now reports say both sides are close to a ceasefire, and that's reversing the fear trade. Stocks are climbing back, and oil is giving up its gains. When geopolitical tensions de-escalate, the market tends to rally hard as the risk premium evaporates. One of the biggest trading firms, Citadel Securities, is also saying that stocks have more room to run. If the ceasefire holds, investors who got scared out of the market will scramble to buy back in — and that rush pushes prices even higher.