War... And Peace? Markets Respond to Headline News That the Conflict Is About to End.

Mar 31, 2026

∙ Paid

Key Takeaways

Headline-Driven Rally Amid Policy Whiplash: Bloomberg News runs with an article claiming that Trump is now willing to end the war even with the Strait remaining largely closed — Stocks Rally, Oil Steadies as US Weighs End to War — timed perfectly for average nationwide gasoline prices to climb above $4 per gallon for the first time in four years. That column was ratified by Trump Looks to Exit With Strait Still Closed. This all begs the question as to why he brought thousands of troops into the region — but a headline-driven stock market is rallying in kind.
Rate Hikes Priced Out: The Fed rate hike that had been priced in has now been priced out, but there is still downside Treasury yield potential, especially at the front end, once cuts get repriced back. Adding to that were the comments by Jay Powell yesterday, when he made it clear that inflation expectations have remained range-bound even with the oil price breakout and that the Fed is simply not equipped to deal with a supply shock of this size.
Peace Priced In, Risk Premium Stays: Peace, at any cost, is what investors crave, though they may not have factored in the implications of Iran staying in control of the Strait. Or what if Donald Trump is really planning a surprise attack of his own with all these shifting narratives? All to be considered at another time, but it does mean that even if hostilities end, the risk premium in oil prices does not.