U.S. stocks are approaching to recover the declines since the Iran war, while crude oil remains high due to the Strait of Hormuz risk.

ME News Report, April 10 (UTC+8), the U.S. stock market is approaching recovery from the decline triggered by the “Iran War,” with investors increasingly betting that geopolitical shocks will be short-lived. However, the oil market remains more cautious. The two-week ceasefire announced Tuesday evening has boosted the stock market rally, triggering a “relief rally” that helped the indices recover more than two-thirds of the losses since the conflict erupted in late February. The S&P 500 index is currently less than 1% below pre-war levels (6,878.88 points). Meanwhile, concerns caused by Middle Eastern supply bottlenecks persist, keeping oil prices high. A Barclays strategist reported to clients: “The stock market’s expectation of a ‘good outcome’ is clearly higher than that of the oil market, with stock indices outperforming the correction in oil futures.” They noted that this rebound was partly driven by “strong short covering,” as short sellers were forced to close positions during the rally. Barclays also stated that investor confidence in President Trump seeking an “exit route” to avoid greater economic losses is increasing. “In our view, further de-escalation remains the most reasonable outcome, as Trump needs an exit plan to cope with rising political and economic costs,” the bank said. Citi strategists also expressed a similar view, believing that Tuesday’s ceasefire changed market sentiment. “Although many uncertainties remain, the fact that the U.S. and Iran found an ‘exit route’ is a positive signal; clearly, the path to an agreement will not be straightforward. Investors have significantly reduced risk exposure, and if the ceasefire holds, they may be tempted to re-enter the market, which could mean the rally still has room to continue.” In contrast, the oil market remains pricing in a more cautious scenario due to ongoing tensions around the Strait of Hormuz, with key shipping routes still largely closed. The May delivery U.S. West Texas Intermediate (WTI) futures approached $100 per barrel on Friday, up from about $67 before the outbreak of war. (Source: BlockBeats)