US Stocks Near Recovery from Post-Iran War Decline, Oil Remains Elevated on Hormuz Strait Risk

April 10: U.S. stocks are edging toward a recovery from losses tied to the "Iran conflict," as investors increasingly bet geopolitical impacts will be short-lived, per CNBC. Oil markets, however, remain far more cautious. A two-week ceasefire announced Tuesday night sparked a relief rally, helping major indexes recoup more than two-thirds of losses since the conflict erupted in late February. The S&P 500 now sits less than 1% below its pre-conflict level (6,878.88 points). Meanwhile, crude prices stay elevated amid ongoing Middle East supply bottleneck concerns. Barclays strategists noted in a client report: "Equity markets are pricing in a far more optimistic 'good outcome' than oil markets—stock index performance has clearly outpaced the pullback in oil futures." They added the rally was partly driven by strong short-covering, as short positions were forced to close during the uptick. Barclays also cited growing investor confidence in President Trump seeking an "exit strategy" to avoid further economic costs: "In our view, further de-escalation remains the most reasonable outcome—Trump needs an exit plan to address rising political and economic costs." Citigroup strategists echoed this, saying Tuesday’s ceasefire shifted market sentiment: "While uncertainties remain, a U.S.-Iran exit strategy is a positive signal in itself, even if the path to agreement isn’t straight. Investors have cut risk exposure sharply; if the ceasefire holds, they may re-enter the market, leaving room for the rally to continue." In contrast, oil markets still price in a cautious scenario: tensions around the Strait of Hormuz persist, and key shipping lanes remain largely closed. May-delivery U.S. WTI crude neared $100/bbl Friday, up from ~$67/bbl before the conflict began.