Doubline’s Gundlach: No terribly enthusiastic about credit markets or stocks at this time.Ominous: Thousands of US Marines are slated to arrive in the Middle East on FridayOil plunges as Iran tensions ease. Crude oil futures settle at $88.13Netanyahu spoke with Trump: Says war achievements can be leveraged into dealMarkets tentatively embrace Trump’s claims that a peace deal is likelyTrump: Discussions with Iran to determine whether broader agreement can be reachedGoldman Sachs raises its US recession probabilityIran parliamentary speaker: No negotiations have been held with the USIran foreign ministry: Conditions to end the war did not changeGold moved to the lowest level since November, testing a key MA before bouncing.What next?US January construction spending -0.3% vs +0.1% expectedTrump: We have had very, very strong talksTrump: Recent Iran talks happened last nightAxios indicates intermediaries passed messages between Iran and the USFed’s Goolsbee: The war definitely throws a wrench into plans to cut ratesinvestingLive European session wrap: Big swings as Trump delays strikes, Iran denies talksMarkets turn around as Trump signals a shift in talks with IranIran media continues to deny US talks, says Hormuz will not return to pre-war conditionsS&P 500 skyrockets as Trump announces ceasefire. Real TACO or just usual jawboning?Iran media reportedly says there has been no direct or indirect contact with Trump
The US session got off to a solid start after Pres. Trump posted on Truth Social signaling productive talks between the U.S. and Iran and a five-day postponement of planned strikes on Iranian energy infrastructure. That shift in tone eased immediate supply concerns and triggered a sharp unwind of the geopolitical premium priced into crude.
Trump is fighting many wars including a decline in support from a war that does not put America first. In addtion, gas price are nearly averaging $4.00 per gallon ($3.95 from AAA), the Fed is not in a hurry to cut rates. yields are moving higher. On top of that there are the tariffs which are supposed to be paid back, and top it off with the Epstein files that that have been put on the back burner – for now. Of course all of that is converging toward a mid-term election which if House and Senate reverse, could spell trouble for the President’s agenda. He is on a high-wire but has to hope for success in Iran to give him some leverage with the voters.
Meanwhile, Iran is sending mixed but deliberate signals regarding the war and prospects for peace. Publicly, officials are denying any direct negotiations with the United States, calling such reports false and in some cases suggesting they are part of a broader disinformation effort aimed at shaping public sentiment or undermining leadership. At the same time, Iran is acknowledging that indirect communication is taking place, with messages being exchanged between Tehran and Washington through intermediaries such as Egypt and Turkey, with the stated goal of reducing tensions. They also reportedly agreed to freeze its missile project for five years. Despite these backchannel efforts, Iran’s stance on the conflict remains firm, with leadership indicating that hostilities will continue until key conditions are met, including the lifting of sanctions, compensation for damages, and acknowledgment of aggression. Overall, while there are signs of diplomatic movement behind the scenes, Iran is maintaining a hard public line, signaling that any meaningful progress toward peace will depend on significant concessions from the United States.
Israel’s messaging reflects a measured but firm approach, balancing openness to a deal with a clear emphasis on achieving military objectives first.
Israeli officials indicate that discussions are underway with the U.S. regarding a potential deal with Iran, with Prime Minister Netanyahu and U.S. officials exploring how recent military developments could be leveraged into a diplomatic outcome. However, Israel is making it clear that any agreement must preserve its core security interests and meet the stated objectives of the war, and there is confidence that the U.S. will not sign a deal that falls short of those goals.
At the same time, Israel is signaling realism about the ongoing conflict, with officials warning that even if fighting continues for weeks, it is unlikely to completely stop Iranian missile activity. This underscores the view that military pressure and diplomacy will likely need to work in tandem, rather than expecting a quick or clean resolution.
The urgency of the situation is also evident, with Netanyahu calling an emergency meeting of coalition leaders to address the evolving U.S.-Iran discussions. Overall, Israel’s stance suggests conditional openness to a deal, but only one that is built on current battlefield gains and fully aligned with its strategic and security priorities. Israel – unlike the US – faces the threat from Iran more directly than the US and if the history of the Hammas/Israeli war is an indication, the contnued bombing from Israel is a wildcard for peace.
Looking at the U.S. stock market, gains were led by the small-cap Russell 2000 (+2.29%), followed by the NASDAQ (+1.38%), the Dow (+1.38%), and the S&P 500 (+1.15%). However, despite the solid upside, all of the major indices closed well off their intraday highs. The S&P, for example, was up as much as 145.14 points at the peak, briefly reclaiming its 200-day moving average at 6624.78, but ultimately failed to hold that level, closing lower at 6581.00. That inability to stay above a key technical barometer keeps the broader bias more cautious.
The NASDAQ showed a similar pattern. The index surged as much as +541.73 points, but fell short of its own 200-day moving average at 22261.38, topping out at 22189.34 before settling at 21946.76. As a result, while the bounce was impressive, the index remains below its key longer-term average, leaving sellers with the technical edge for now.
In the bond market, yields moved lower across the curve. The 2-year yield fell -4.2 basis points to 3.851%, while the 10-year yield declined -4.0 basis points to 4.351%, after reaching as high as 4.44% earlier in the session. Notably, the 10-year yield remains comfortably above the 4.25% level, which was broken to the upside last week—an indication that rates are still elevated despite today’s pullback.
Crude oil also saw a sharp reversal, moving back below the $90 level after trading as high as $104. The current price near $89.39 reflects easing geopolitical concerns, but context matters—oil was trading closer to $67 at the start of the conflict on February 28, meaning prices are still significantly elevated overall.
In the FX market, the U.S. dollar moved broadly lower, with the biggest decline against the GBP (-0.63%), followed by the JPY (-0.48%) and the EUR (-0.35%). Risk-sensitive currencies were mixed: the NZD gained +0.34%, but the CAD was little changed and the AUD fell -0.23%. That divergence is notable, as both the CAD and AUD typically benefit from risk-on flows and lower yields, suggesting that today’s move was not a full conviction shift across markets.
Bottom line, the day ended far better than it looked heading into the open, with risk assets rebounding and yields and oil moving lower. However, key technical levels were not reclaimed, and cross-asset signals were mixed. Whether this turnaround reflects a genuine shift in sentiment or a temporary reaction—potentially influenced by political headlines—remains to be seen. For now, the market leaned toward optimism, but not decisively.
This article was written by Greg Michalowski at investinglive.com.