New Month, New Ratchet

After a week punctuated by hopeful talk, mostly on Tuesday and Thursday, about prospects for an extended ceasefire and/or peace deal in the Persian Gulf, oil and bond traders are expressing their disappointment at yet another lack of evident progress.  Brent and WTI futures and bond yields were up modestly early this morning, but then took another leg higher when Iran said it would halt message exchanges with the US.  Stocks once again yawned, only giving back some of their pre-market gains.

This type of behavior is nothing new.  We’ve noted on multiple occasions that stocks, particularly those that are being boosted by aggressive AI spending, have been shrugging off inconvenient news about the Strait of Hormuz for several weeks now.  The latest bout of enthusiasm that came to naught was on Friday afternoon.  After reports on Thursday that a tentative agreement for a 60-day extension to the current ceasefire had been reached, the President said on Truth Social at 10:51 AM EDT that “I will be meeting now, in the Situation Room, to make a final determination” on the proposal.  After a two-hour meeting, the President emerged from that Situation Room meeting with no update on whether a determination had been reached. 

No determination, no matter.  The S&P 500 (SPX) rose by 0.22% on Friday and the Nasdaq 100 (NDX) did even better with a 0.36% rise.  Today, at noon EDT, we have SPX up 0.09% and NDX up by 0.46%, thanks to a 1.05% bounce in the Philadelphia Semiconductor Index (SOX).  These modest bumps come despite roughly $6 jumps in both Brent (CO) and WTI (CL) futures and 7 basis point rises in 2- through 10-year Treasuries.  There’s our ratchet. 

It is indeed possible that end-of- and start-of-month factors helped immunize stocks from the geopolitics.  Stocks had a bit of a late pop just before the closing bell on Friday.  We can see from the tables below that both SPX and NDX have risen on each of their last three month-end sessions, while SPX rose in each of the five prior starts to the month, with NDX only missing January. 

Source: Interactive Brokers

We have previously discussed the stock market’s predilection for Mondays, though that has not been quite as reliable – and certainly not as reliable as its recent streak of 9 straight weekly advances. 

Source: Interactive Brokers

There is a fascinating but subtle data point in the table above.  Of the 22 weeks that have been completed so far this year, SPX has risen in 12 of them.  That’s not too shabby, even if it is a lower percentage than the 13 for 18 prior up Mondays that have occurred in 2026.  But if I had asked you whether more than half of the weeks this year had seen a fall in SPX, I doubt that many of you would have thought that the benchmark was batting less than .500 on that measure.  Even more interestingly, when we remove the current 9-week streak, it means that only three, yes, three, of the prior weeks have seen a gain in SPX.  Not only can it be asserted that the current market advance is relatively tech-heavy, it is also very recent. 

Equity investors have proven once again that they can put aside geopolitical concerns in favor of their unyielding focus on the earnings and guidance boosts that have bolstered tech stocks in recent weeks.  We can debate whether they have extrapolated near-term guidance too far into the future, but for now, the combination of positive thinking and unyielding momentum has led to stock traders’ remarkable ability to shrug off the global factors that spook their bond and commodity counterparts.