2026.4.13 US Stock Market Brief

Strait of Hormuz traffic plummeted from 19 vessels to 4. WTI surged as much as 9% in early trading, then Trump said Iran called, “very eager to make a deal.” Oil reversed immediately, and all three major indices opened low but rallied to close green.

This script has played out too many times. After a fruitless 21-hour marathon negotiation over the weekend, the US moved to blockade the strait. Just as the market was pricing in “escalation,” a single hard-to-verify headline flipped the narrative. S&P 500 closed at 6886.24, +1.02%, just one decent catalyst away from 7000. Nasdaq 23183.74, +1.23%. Dow 48218.25, +0.63%. VIX fell back to 19.12 — nowhere near the panic level you’d expect from a market in the middle of a military conflict.

Polymarket’s pricing is the most honest read: 100% probability that military action ends before April 17, but only 10% chance of a permanent peace deal by April 22. Translation: the market isn’t betting on peace — it’s betting this war stays small. Citadel reads it the same way, viewing Trump’s agreement to a two-week ceasefire as a signal of “intent to end the war.” The path will be messy, but the direction is convergent.

Tech led the rally, XLK +2.10%. Microsoft +3.64%, still climbing after hours. NVDA closed up just 0.36%, after dipping 1.31% premarket. Defensive sectors got dumped — consumer staples XLP -1.00%, utilities XLU -1.21%. Classic risk-on signal.

WTI settled at $99.08, +2.60%. The early 9% spike got slapped back by one sentence from Trump, but $99 is still a sensitive level. If the blockade holds, $100 is a matter of time; if negotiations show real progress, oil could slide back below $90 fast. The 10-year Treasury yield fell to 4.30%. Japan’s 40-year JGB yield dropped 9bp to 3.84%, and the 20-year auction drew the strongest demand since 2019. Money is buying stocks and bonds simultaneously — the former betting the conflict stays contained, the latter hedging in case it doesn’t.

BlackRock upgraded US equities to overweight today, citing “likely limited” damage to the global economy from the Middle East conflict and “still strong” AI-driven corporate earnings. Combined with JPMorgan’s tactical shift to bullish last week, a big-money consensus is forming. But the May options chain tells a different story: institutions are loading up on puts, hedging for a valuation correction in May. Bullish on the mic, buying insurance with the other hand.

Earnings season officially kicks off this week. Wall Street consensus for S&P 500 Q1 earnings is +13.9% YoY, followed by +20%, +22%, and +19.9% for the next three quarters. These expectations are extremely optimistic, especially with oil near $100, inflation above 3%, and rate cut hopes for the year essentially dead. Goldman already set the template: revenue and profit both beat, but FICC dragged, credit loss provisions rose, and the market didn’t buy it — stock fell. The bar right now isn’t “good or bad,” it’s “good enough or not.”

Dollar index 98.37, -0.28%. Spot silver up 2% to $77.1. Dollar weakness plus geopolitical uncertainty — precious metals are quietly carving out a rally of their own.

6886 is close to 7000, and the bulls want to pin the index high before Friday’s monthly settlement. Whether the strait stays blocked or loosens up, whether earnings guidance shows “reality catching up to expectations” or “expectations bowing to reality” — these two things decide whether 7000 breaks.