“Peace is close” has become the market’s favorite refrain. Since late February, the US-Iran war has rattled global markets, sending oil soaring, reigniting inflation, and forcing central banks to rethink rate cuts. Investors are chasing a “peace dividend” amid the chaos, but capturing it may be far trickier than it looks.

Equity rally, skeptic edition: The S&P 500 has climbed 9% since the conflict began, hitting record highs as institutional money pours into equities under a TINA (“There Is No Alternative”) mindset that favors stocks over bonds. Optimism surged again last weekend after President Donald Trump announced a near-final deal, briefly sending Brent crude down and lifting global equities before the rally quickly faded as doubts over diplomacy returned. Rabobank strategist Michael Every compared the cycle to “Charlie Brown and Lucy with the football,” where every apparent breakthrough keeps falling apart again.

• The S&P 500 already sits roughly 18% above its wartime low, leaving limited room for another major peace-driven surge.
• Barclays said market concentration is at its highest level in over two years, with any broader rally into Europe, emerging markets, or cyclicals likely depending on oil prices falling further.

Ceasefire Hopes Meet Reality

Even a signed peace deal would not instantly untangle global energy markets. Around 166 tankers carrying roughly 170M barrels of crude remain stranded in the Persian Gulf, while restarting oil production and repairing damaged refinery infrastructure could take months or even years. Marine insurance costs have also exploded, leaving shippers hesitant to fully return until the region sees a sustained stretch of stability.

• Simplify’s Michael Green said Brent crude likely needs to fall near $60 a barrel for US gas prices to approach $3 a gallon, a level futures markets do not see until 2032.
• Still, Washington and Tehran are reportedly moving toward a 60-day extension of the truce while reviving diplomatic talks around Iran’s nuclear ambitions.

Standing on fragile ground: Deutsche Bank’s Jim Reid warned this week that recent US strikes were “a warning shot that the ceasefire is fragile,” while Iran’s state news agency stressed that restoring tanker traffic is “in no way” the same as returning to pre-war conditions. Capital Economics’ Thomas Mathews also cautioned that any relief rally “probably won’t be very large by the standards of such things.” For all the optimism, the market is still one headline away from panic.