Please be advised that everything is fine.
The S&P 500 is up 2.5%. The Dow added 1,325 points. Brent crude fell 13.4% to $94.68 in a single session. Bitcoin crossed $71,000. Ether was up nearly 7%. The dollar index touched 98.838, its weakest reading since March 11, as the euro climbed to $1.1698 and sterling pushed $1.3428. The yen firmed to 158 per dollar. The Aussie dollar, perhaps giddy at not being entirely irrelevant, jumped 1.2%.
Everything is fine.
Carnival Corporation, which had fallen 20% since the war began because it turns out people do not book cruises when an active military conflict is blocking the world's most critical oil shipping lane, gained 10% in a single session. United Airlines surged 9.5%. Coinbase rose 5%. Robinhood was up 8%. Strategy, the Bitcoin treasury firm formerly known as MicroStrategy before it legally changed its identity to match its manic energy, advanced premarket alongside crypto names across the board as $140 million in short positions were forcibly liquidated in twelve hours.
Everything is fine, and if you had concerns, they have been liquidated.
The occasion for this optimism is a two-week ceasefire between the United States and Iran, announced by President Trump on Truth Social roughly ninety minutes before his deadline expired — a deadline he had underscored by warning that "a whole civilization will die tonight." The ceasefire was mediated by Pakistan's Prime Minister, who invited both delegations to Islamabad on Friday to continue talks toward what he called "a conclusive agreement to settle all disputes."
All disputes. In two weeks. Between the United States and Iran.
The disputes, for reference, include: Iran's nuclear program, the role of the IRGC as a state-within-a-state, four decades of sanctions architecture, the question of regional proxies across Yemen, Iraq, Syria, and Lebanon, the Houthis, Hezbollah, the precise legal status of the Strait of Hormuz, and what Iran's foreign minister described as the "technical limitations" on safe passage — a phrase that markets absorbed and immediately forgot.
The White House says the strait is open. The IRGC says shipping has stopped following Israeli strikes on Lebanon that killed at least 182 people, which Iran considers a ceasefire violation. Defense Secretary Hegseth said at a press briefing "the strait is open." The Chairman of the Joint Chiefs said he believed so, based on the diplomatic negotiation. A shipping executive with vessels currently in the Persian Gulf told reporters he had received no guidance from Iranian authorities and was not prepared to transit without guarantees on crew safety.
MarineTraffic confirmed a trickle of vessels had passed through. "A trickle" is doing considerable work as a bullish data point for the relief rally, but here we are.
The currency moves are the part of this worth sitting with. The dollar's weakness is not solely a risk-on unwind. The DXY has now fallen for three consecutive days, and it was already soft before the ceasefire. There is something structural occurring beneath the tactical noise: the dollar index had erased all of its year-to-date gains even before this week's geopolitical pivot. The euro at $1.1698 is its strongest since early March. The markets now see around a 50% probability of a Fed rate cut by year-end — against essentially zero just days ago, when crude was pricing in a supply crisis and the March FOMC minutes were revealing that the modal policy path had shifted to no cuts at all in 2026. The ECB, running the opposite direction entirely, saw its rate hike expectations fall — markets were pricing nearly three hikes last week; now they see two. War premium out. ECB hawkishness, apparently, partially negotiable.
This is worth a moment of structural honesty. In the space of 90 hours, Federal Reserve policy expectations went from "possible hike" to "50% chance of a cut." Not because any American economic data changed. Not because inflation moved, or payrolls surprised, or PCE printed clean. Because one man posted on Truth Social. Jerome Powell has spent eighteen months carefully managing market expectations through measured press conference language, and the entire enterprise can be unwound overnight by a Middle Eastern ceasefire that may or may not involve the strait actually being open.
The Fed's credibility is not in question. Its relevance is.
Elsewhere, less loudly, the private credit complex continues its slow-motion stress test. Morgan Stanley and Cliffwater have now joined BlackRock in capping redemptions from their multibillion-dollar private credit funds. Defaults in the space have climbed to 5.8% in the twelve months through January — the highest since Fitch launched its tracker. The underlying exposure problem is concentrated in software companies, particularly SaaS borrowers, where private credit funds hold an estimated $500 billion in loans to firms now facing structural disruption from AI. The combination of floating rate debt, compressed revenue multiples, and AI-driven competitive pressure is a three-body problem that a ceasefire rally does not solve.
The headlines this week belong to oil and Trump and Pakistan. The footnotes belong to credit. They usually do, right up until they don't.
The honest version of this memo reads as follows: a temporary pause in a war that began weeks ago, mediated under improvised diplomatic conditions, with disputed terms, active violations already alleged by one party, and a fourteen-day clock, has caused one of the largest single-session risk rallies of the year. The private credit system is showing early signs of dislocation. The dollar is structurally softer than its safe-haven reputation implies. And the Federal Reserve's policy trajectory is being determined by events in the Strait of Hormuz.
Everything is fine.
Act accordingly.
Published April 9, 2026
