Markets rally after truce

U.S. stocks rose again on Thursday, April 9, as investors bet the Middle East truce would hold long enough to keep the conflict from widening. (newsbreak.com) The S&P 500 closed up 41.85 points, or 0.62%, at 6,824.66, while the Dow Jones Industrial Average added 275.88 points, or 0.58%, to 48,185.80. The Nasdaq Composite gained 187.42 points, or 0.83%, to 22,822.42. (newsbreak.com) The Nasdaq-100, which tracks 100 large nonfinancial Nasdaq companies, finished at 25,082.1, up about 0.7% on the day. Consumer discretionary shares led the S&P 500, while energy was the weakest of the index’s 11 sectors. (360miq.com; newsbreak.com) Oil stayed volatile because traders were still watching the Strait of Hormuz, the shipping lane that carries about one-fifth of the world’s oil. Reuters reported that front-month West Texas Intermediate crude settled up 3.66% on Thursday, though it remained below $100 a barrel. (cnbc.com; newsbreak.com) The market move followed a sharper jump on Wednesday, April 8, after the United States and Iran agreed to a two-week ceasefire tied to a safe reopening of the Strait of Hormuz. CNBC reported that Dow futures had risen 967 points before the opening bell, with S&P 500 futures up 2.1% and Nasdaq-100 futures up 2.3%. (cnbc.com) Stocks had sold off earlier in the conflict because higher oil prices can feed inflation by raising fuel, shipping and input costs across the economy. When oil dropped back below $100 after the ceasefire announcement, traders moved money back into economically sensitive shares such as retailers, chipmakers and transports. (cnbc.com; bloomberg.com; newsbreak.com) Interest-rate expectations shifted with the same headlines. CNBC reported that market-implied odds of a Federal Reserve rate cut by year-end jumped to about 43% on April 8, up from 14% before the ceasefire, according to CME Group FedWatch pricing. (cnbc.com) That repricing did not mean investors thought the danger was over. CNBC reported that gold rose and Treasury yields fell even as stocks rallied, and Bloomberg said the Cboe Volatility Index was still around 21 on April 8, a sign that traders were still paying up for protection against another reversal. (cnbc.com; bloomberg.com) By Thursday’s close, the rally looked more like a relief trade than a clean all-clear. Reuters said the S&P 500 had climbed back above its 100-day and 200-day moving averages in two sessions, while crude kept swinging with every headline about negotiations and shipping. (newsbreak.com)