MarketsApr 9, 2026
Markets Catch Relief on Ceasefire Hopes, but Risks Linger Beneath the Surface
Geopolitical Stability
Rhea Lobo
Discover
Everyone loves a last-minute reprieve, and US investors finally got one they could trade on. President Donald Trump’s two-week ceasefire with Iran triggered the relief rally that traders had been waiting for. But every bounce has a catch, and this one is no different. It’s still a short-term pause, with 800 vessels still stranded in the Persian Gulf and a “safe passage” looking far from certain.
Don’t chase the rush: Goldman Sachs trader Rich Privorotsky is urging caution on the S&P 500 rally, arguing this is not a level to chase. Much of the conflict-driven drop has already been retraced, while fresh strikes across the Gulf highlight how unstable the ceasefire remains. He also flagged comments from Iran’s Foreign Minister Abbas Araghchi, indicating tanker traffic through the Strait of Hormuz could be controlled by the military and restricted by technical limits, raising the risk that a key global oil route starts operating more like a managed checkpoint than an open passage.
The “TACO” trade has become so consistent that nine of the S&P 500’s ten biggest single-day gains since he took office have followed relief around tariffs or Iran. The payoff has been massive, with returns hitting 52% if you only owned stocks on those days versus 12% for buy-and-hold. But that success may now be the problem, as traders are front-running reversals so aggressively that gains are fading faster.
T&C applied: The market is leaning into relief, with Jim Reid noting investors are “breathing a big sigh of relief” while still looking for clear signs of de-escalation. Reports suggest the deal may allow Iran and Oman to charge transit fees through the Strait of Hormuz, keeping risks elevated. If the truce holds, easing tensions around the chokepoint could pull oil lower and shift markets back into risk-on, lifting airlines, travel, industrials, and equities while energy and defense give back gains. For now, optimism is back in control, but it’s walking on a thin layer of confidence.
