Last-minute ceasefire saves us from the brink… Dow rises 1,200 points… S&P regains critical line in the sand… AI bull market resumes today… and what investors should watch next
As I write on Wednesday, markets are rising.
The Dow Jones jumped more than 1,200 points, the S&P 500 rose 2.5%, and the Nasdaq rose more than 3%.
Meanwhile, oil prices are doing the opposite, falling 16% during the day.
It’s all because of a two-week ceasefire between the US and Iran that was reached last night, with nearly 90 minutes remaining before President Trump’s 8 p.m. deadline.
If you read yesterday digestYou know how close we are to the edge…
Trump had set a strict deadline for Iran to reopen the Strait of Hormuz. US forces had already struck military targets on Kharg Island the night before. Trump posted an ominous warning on the Truth Social website: “An entire civilization will die tonight, never to be brought back again.”
Then, at around 6:30 p.m., came the post avoiding the worst.
How the deal came together
Here’s what Trump posted on Truth Social:
Based on my conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir of Pakistan, in which they asked me to halt the destructive force that will be sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the full, immediate and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack on Iran for two weeks.
Pakistan, which led negotiations throughout this conflict, appears to have acted as the crucial last-minute mediator.
Prime Minister Sharif had publicly urged Trump to extend the deadline by two weeks to allow diplomacy to advance, while at the same time asking Iran to reopen the strait.
On Wednesday, Iran’s Supreme National Security Council confirmed its acceptance of the ceasefire. The talks are scheduled to begin in Islamabad on Friday.
The language coming out of Tehran came with some clear caveats. The Iranian statement said: “This does not mean the end of the war.” He added: “Our hands remain on the trigger, and if the enemy commits the slightest mistake, we will respond with full force.”
At the same time, the Strait itself remains a complex issue…
The Iranian Foreign Minister confirmed that ships may transit the waterway within the next two weeks – but “through coordination with the Iranian Armed Forces and taking into account technical restrictions.”
Before this conflict, more than 100 ships a day passed through a decades-old traffic system that did not require such coordination. What these “technical limitations” mean in practice is not yet clear.
The US military has halted all offensive operations against Iran, although defensive measures remain in place. In fact, early this morning, both Israel and the United Arab Emirates issued missile warnings despite a declared ceasefire – a reminder that the gap between declared peace and actual peace in the Middle East can be large.
However, the market is rejoicing
Today’s price action tells you all about how much fear has been priced into assets over recent weeks.
Brent crude fell from around $110 to $95 as I wrote – on pace for its biggest single-day decline since the coronavirus. WTI fell nearly 16%.
Meanwhile, all three major indices are rising. And something important is happening that goes beyond the headlines of one day.
As of yesterday’s close, the S&P was trading below its 200-day moving average — an important technical line that separates bull market behavior from bear market behavior. Chief market analyst Brian Hunt has written that stocks “below their 200-day moving average are ‘on the wrong side of the track.’ It’s the ugly part of town.”
Well, as you can see below, with the surge this morning, we’re back to the nice part.
This is big.
Markets that reclaim the 200-day moving average after falling below it — especially given heavy volume and an underlying catalyst — often see a follow-through. It’s not foolproof, but we encourage it.
Meanwhile, the bond market is pricing in brighter skies as well.
Treasury yields are falling as investors bet that lower energy costs could give the Federal Reserve room to cut interest rates later this year — a scenario that looked increasingly tenuous just days ago when Brent crude was threatening to push toward $130.
So, is today a good time to buy?
Yesterday, we featured our technology expert Luke Lango, Editor Innovation investorAnd his framework of three scenarios for how to resolve this conflict.
Outcomes 1 and 2 – reaching an agreement or unilateral American withdrawal – were assigned a combined probability of 80% to 85%.
This morning, Luke calls it plain: We got TACO (Trump Always Takes Out the Chicken). Better yet, from his perspective, this is not a tactical pause – but the beginning of the end of the conflict.
Here’s Luke:
The taco was delivered on Tuesday. Trump “came out” last night with a social post of truth avoiding the apocalypse that we believe marks the beginning of the end for the Iran war.
We didn’t just get tacos last night – we got them the Taco. The big one. He is the one who ends the war.
From our point of view, the war is now effectively over. The AI bull market resumes today. It is time to spread the dry powder.
Locke’s confidence in that call depends on a detailed reading of Trump’s actual language — not just the headline.
As he wanders around (Trump’s posts in bold):
- “We have already achieved and exceeded all military objectives.” This is a declaration of victory. Trump has publicly stated — on the record, with hundreds of ReTruth documents — that the military mission has been completed…
- “A two-sided ceasefire.” This is not a pause, not a delay, and not a suspension awaiting review. A ceasefire is a mutual agreement to stop fighting.
- “10-point proposal from Iran…almost all points agreed.” Iran returned with its own proposal. The United States considers it a practical basis. This is a deal being made, not a delay being manufactured.
- “Long-term peace with Iran and peace in the Middle East.” Trump portrays this as a historic foreign policy achievement. You can’t frame a tactical delay as an outdated accomplishment.
In light of this, Locke recommends to his subscribers to buy the dip.
He sent out a number of buy alerts this morning – but with a specific focus: AI and high-growth names only. Not the broader economy.
Oil prices will fall, he writes, but not to prewar levels like $65. It will be low enough to recharge AI shares But not revitalizing the flagging American consumer.
Returning to Luke on how this war changed the investment landscape:
Market bifurcation becomes permanent as a result of this war.
The AI boom and other high growth investment themes are stocks we want to own as the fear premium emerges and the fundamental premium returns.
The rest of the economy will continue to struggle.
For subscribers to Innovation investor I’m looking for Luke’s locating instructions, Click here To access the new recommendations this morning. and To learn more about joining Luke in Innovation investorClick here.
Why do we celebrate mostly – but not completely -?
I agree with Locke’s analysis, and I am very encouraged by the idea of Trump’s desire to secure his legacy as a peacemaker in the region. This is a great incentive to maintain this ceasefire.
However, this is the Middle East. And two weeks short runway.
This is not raining on today’s march. The ceasefire is real, the market reaction is rational, and the technical picture has improved significantly.
But if you’re buying today, it’s worth a moment of thought: Are you taking a more speculative trade and want to get out of it if the next two weeks are disappointing? Or are you adding a long-term contract that you will hold even if volatility returns?
Knowing the answer—and your exit plan—before you pull the trigger today is the best way to avoid potential regret tomorrow.
Bottom line
It’s a great day…
The ceasefire that few thought would arrive in time has already been achieved, and markets are responding accordingly.
We will be monitoring the Islamabad talks closely when they begin on Friday, and will keep you updated as the picture develops.
But for now, let’s take a breath and appreciate the fact that the worst-case scenario didn’t happen.
I wish you a good evening,
Jeff Remsburg
Note: There’s one thing we’re hearing more and more from readers lately…
“The market seems to be moving faster than ever.”
And they are right. Between AI-driven moves and sharp reversals, it’s becoming harder to rely on the old buy-and-hold approach alone. That’s why our colleagues at Stansbury Research have created a new event, Market Shakes 2026focused on a different approach – one that is based on identifying short-term opportunities and acting on them quickly using alternative data.
It’s a completely different mindset…but one that may be better suited to today’s market environment. If you feel this shift, It’s worth checking out.
