Yesterday, equity markets opened lower as President Trump and Iran exchanged bellicose rhetoric ahead of the impending deadline. However, equities recouped those losses throughout the day as reporting suggested there was some progress in diplomatic efforts. The S&P 500 ended slightly higher with energy leading to the upside and pockets of strength in mega-cap tech. Consumer related stocks underperformed with weakness in retail, housing and travel related companies.

Shortly before the 8:00 pm deadline there was a two-week ceasefire announced leading to a significant rally across risk assets while oil prices have fallen sharply. Interestingly it is the day before the anniversary of the tariff turnaround rally which led to a historic 10% intraday reversal (and the TACO moniker). There are some similarities in the unwind of positioning ahead of that policy pivot, however, this time around that unwind was much more contained. S&P futures are up ~2.5% which will put the index just under 6,800, retesting the low end of the range that we broke down from and the 50/100d moving averages. Russell 2k futures are up >3%. Oil prices are falling >15% with ICE Brent trading in the low $90’s, which is still up ~$20 from the start of the conflict.