The Ceasefire Rally: Seven Straight Days, Oil Below $100, and the Dow Back in the Green
The S&P 500's longest winning streak since October. WTI crude's biggest single-day plunge since April 2020. Semis leading, energy lagging, and the Fed worried about inflation. A market snapshot from a week that moved everything.
The Week in Context
On April 7, President Trump announced a two-week ceasefire with Iran, brokered by Pakistan, ending 40 days of U.S.-Israeli strikes that had sent oil above $110 per barrel, disrupted global shipping through the Strait of Hormuz, and dragged the Dow into negative territory for 2026. The market response was immediate and violent. On April 8, the Dow surged 1,326 points (2.9%), its best day since April 2025. WTI crude plunged 16% to $94.41, the steepest single-day decline since April 2020. The S&P 500 broke above its 200-day moving average. By April 9, the index had notched seven consecutive gains, its longest winning streak since October.
The rotation was textbook. Semiconductor stocks led the rebound: Broadcom jumped 5%, reclaiming ground lost during the conflict. Energy names that had surged on war premiums reversed hard: Exxon fell 4.7%, Chevron dropped 4.3%. Industrials (XLI +3.8%) and materials (XLB +3.3%) rallied on expectations that global trade disruption would ease. Ten of eleven S&P sectors closed green on April 8. Energy was the lone loser.
Why It Matters
The “war premium” unwind is only half done: Oil settled near $98 on April 9 after bouncing from the $94 low, as markets realized Iran was still controlling access to the Strait of Hormuz despite the ceasefire. Ships need to “coordinate with Iran’s Armed Forces” to pass through. That is not free passage. Until the strait is genuinely reopened without conditions, crude remains elevated above the pre-war ~$70 to $75 range. The rally is pricing in a ceasefire that is fragile at best.
The Fed pivot that isn’t: FOMC minutes released April 9 showed policymakers are now more inclined toward rate hikes, not cuts, as they fear the war has triggered inflationary pressure that the ceasefire alone will not reverse. Oil spent 40 days above $100. That feeds into transportation, food, and manufacturing costs with a lag. Even if crude normalizes, the inflation impulse is already in the pipeline. Markets rallying on peace may be ignoring the monetary tightening that peace cannot prevent.
Amazon’s $15B AI reveal: Buried in the ceasefire euphoria, CEO Andy Jassy disclosed for the first time that AWS’s AI revenue run rate topped $15 billion in Q1. Amazon shares jumped 5.6% on April 9. The number confirms that the AI infrastructure buildout is accelerating through geopolitical chaos: hyperscalers are spending regardless of oil prices, wars, or rate expectations. Amazon, Meta ($21B CoreWeave deal), and Anthropic ($30B run rate) all reported milestone AI numbers in the same week.
- Ceasefire fragility: Iran's Supreme Leader posted that "aggressors who attacked our country" will not "go unpunished." Israel is continuing strikes in Lebanon. Pakistan-brokered talks in Islamabad on April 10 face deep structural disagreements.
- Inflation persistence: 40 days of $100+ oil has second-order effects on CPI that a ceasefire cannot instantly reverse. The Fed is watching, and rate hikes are back on the table.
- Private credit stress: Carlyle, Blue Owl, and others are gating funds. The rally masks underlying credit deterioration that the war exposed but did not cause.
- Technical breakout: The S&P recaptured its 200-day moving average. Seven-day winning streaks historically extend further when accompanied by breadth improvement.
- AI spending is war-proof: Amazon, Meta, and Anthropic all posted record AI infrastructure commitments during the conflict. Enterprise tech spending is not slowing down regardless of macro.