Digesting a Strait of Hormuz skirmish and a V-shaped rally

Briefing.com Summary:

*Some weekend hostilities in the Strait of Hormuz have created some misgivings about the ceasefire agreement between the U.S. and Iran.

*WTI crude futures are up 5.5% in early trading but remain below $90.00/bbl.

*The Nasdaq is on its longest winning streak (13 straight) since 1992.

There was some slippage over the weekend in the U.S.-Iran ceasefire effort. Iran is perturbed that the U.S. blockade of its ports is ongoing and reportedly fired on commercial vessels trying to get through the Strait of Hormuz. The U.S., meanwhile, is determined to continue the blockade until Iran agrees to its demands and seized an Iranian oil tanker trying to get through the blockade.

There are conflicting reports as to whether a second round of negotiations between the U.S. and Iran will proceed in Pakistan this week. President Trump has warned that, if Iran doesn’t take the deal that has been offered, the U.S. will destroy its power plants and bridges.

That is the backdrop for why WTI crude futures are up 5.5% today to $88.49/bbl, and it is the go-to excuse for why the equity futures are lower.

Currently, the S&P 500 futures are down 24 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 71 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 202 points and are trading 0.4% below fair value.

Those indications, frankly, aren’t painting the tape with a lot of fear and loathing about the Iran situation. In the same vein, the 10-yr note yield is unchanged at 4.25%.

With the Nasdaq Composite up 13 straight sessions (its longest winning streak since 1992) and the S&P 500 up 12.8% from its low on March 30, one can make a reasonable case that the equity futures market would look exactly like it does this morning had the Strait of Hormuz skirmishes not happened at all this weekend.

The jump in oil futures is the one element that speaks directly to the Iran matter, but otherwise we would contend that the equity market is in a digestion phase after the huge V-shaped rally to all-time highs this month.

Today’s open will have a downward bias. What everyone is waiting to see is if the buy-the-dip impulse remains just as strong as it was last week… and the week before that… and the week before that.

With the first-quarter earnings reporting period set to crank up this week, there might be an understandable lull today in the buy-the-dip action and perhaps some more idiosyncratic behavior linked to corporate headlines like American Airlines (AAL) denying interest in a merger with United Airlines (UAL), TopBuild (BLD) agreeing to be acquired by QXO for $505.00 per share, and Google (GOOG/GOOGL) talking to Marvell (MRVL) about constructing new AI chips, according to The Information.

There won’t be any U.S. economic data of note to contend with today, nor will there be any Fedspeak.

There will certainly be more headlines about the state of affairs between the U.S. and Iran. That will provide a go-to rationale for explaining the market’s behavior, whether it is valid or not in the context of a market that has gone straight up this month.

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Originally Posted April 20, 2026 – Digesting a Strait of Hormuz skirmish and a V-shaped rally