A ceasefire was announced shortly before a deadline, with talks due to begin in Islamabad on Friday, though this is not officially confirmed. The Strait of Hormuz is open and ships are passing through, but they must coordinate with Iran’s armed forces.
Before the announcement, the VIX reached 28 at 3 pm, then fell 8% to close at 25.50, still up 6% on the day. US indices ended mixed: the Dow -85 points, S&P +5, Nasdaq +21, Russell +4, Transports +242 (1.3%), Equal Weight S&P -20, and the “Mag 7” -37.
Market Reaction Snapshot
Asian markets rose: South Korea 6.8%, Japan 5.4%, Taiwan 4.6%, Hong Kong 3.1%, China 3.5%, and Australia 2.6%. In Europe at 6 am, France, Germany and the Euro Stoxx were up 4.3%, Italy 3.3%, Spain 3%, and the UK 2.4%.
US futures were higher: Dow 2.5%, S&P 2.6%, Nasdaq 3.8%, and Russell 3.7%. Oil fell, with WTI down 15.6% to $95.30 and Brent down 13% to $95, while fall oil futures were pricing low $70s.
Treasury yields moved lower, with the 10-year at 4.24% (down 5 bps) and the 30-year at 4.84% (down 3 bps). Gold rose 1.7% after a 1.2% gain, trading at $4,790, up $82, while the VIX dropped 20% and moved below 22.30 towards 19.60.
Economic releases listed were Mortgage Applications and the March FOMC minutes. The S&P closed at 6,616, with futures pointing 180 points higher; levels referenced were 6,644, 6,771, and 6,804, with a 3% rise cited to clear all three trendlines.
We should remember the lesson from last year’s ceasefire deal in 2025. Markets were on edge with the threat of bombs dropping, but the 11th-hour deal triggered a massive risk-on rally. That event showed us just how quickly geopolitical risk premiums can vanish from the market.
Lessons From The 2025 Ceasefire
Look at the VIX today, sitting around 14.5, a world away from the spike to 28 we saw during the peak of that crisis in 2025. This tells us that options are relatively cheap right now, and the market is complacent. For traders, this is an opportunity to buy longer-term protection, like puts on the SPY, at a discount compared to what it cost during that panic.
Oil prices are also a different story, with WTI currently trading near $82 a barrel. This is a sharp contrast to when it crashed from over $110 to $95 in a single morning after the Strait of Hormuz reopened last year. With the geopolitical premium gone and prices stable, selling covered calls on energy stocks or ETFs like XLE could be a smart way to generate income.
The relief rally back in 2025 was led by high-beta sectors like technology and small caps, just as expected. The Nasdaq 100 has climbed over 22% since that ceasefire day, rewarding those who bought into the dip. With implied volatility low today, buying call options on tech indices like the QQQ is a more capital-efficient way to position for upside than buying the stocks outright.
We also saw how gold reacted, rallying not on fear but on falling bond yields. With the 10-year Treasury yield now stable around 4.15%, down from the 4.24% seen during that event, the frantic moves in gold have calmed. This suggests that options strategies on gold ETFs like GLD that profit from range-bound price action could be effective.
The main takeaway from the 2025 scare is how fast sentiment can flip and de-escalation can ignite a rally. Today’s low volatility environment shouldn’t be taken for granted, as it provides a valuable window to structure trades. We must remain vigilant, because as we saw last year, the market can turn on a dime.
