Remember when everyone was convinced we were heading into an oil-fueled apocalypse? Yeah, about that.
This week, the stock market decided to pull off a comeback so dramatic it would make a Marvel movie jealous. After getting absolutely hammered by Iran war fears, the S&P 500 basically said “nope, we’re good” and clawed back nearly all its losses. The Dow jumped over 1,300 points in a single day. The Nasdaq? Up almost 3%. It was the kind of week that makes financial advisors either heroes or villains depending on who you ask.
Here’s what actually happened: Tuesday evening brought news of a ceasefire deal with Iran, and suddenly the market’s worst-case scenario—an extended conflict that would spike oil prices, torch inflation, and potentially tank the economy—got taken off the table. Investors collectively exhaled. Hard.
The numbers tell the story. The S&P 500 ended the week up 3.6%, marking its biggest weekly gain since November. That’s not just a bounce; that’s a full-on recovery. The index is now trading just 1% below where it was back in late February, before everything went sideways.
But here’s where it gets interesting: oil prices absolutely tanked. Both Brent crude and WTI crude dropped below the $100-a-barrel psychological threshold that everyone’s been obsessing over. Brent ended the week at $94.50, while WTI settled at $95.98. Wednesday alone saw WTI post its biggest single-day drop since 2020. Brent logged its largest weekly decline since 2022. That’s the kind of move that gets traders’ attention.
Treasury yields followed suit, sliding from 4.34% on Tuesday afternoon down to 4.24% by Wednesday’s low, eventually settling at 4.31% by week’s end. Why? Because investors suddenly got optimistic about inflation. With the war paused and negotiations underway, there’s hope that maritime traffic through the Strait of Hormuz can normalize, which means no prolonged energy crunch. No energy crunch means no runaway inflation. No runaway inflation means the Fed might actually cut rates.
Speaking of which, the market’s odds that the Fed will cut rates at least once in 2026 jumped to 30% this week. That’s a massive shift in expectations, and it’s all because one ceasefire deal changed the entire macro outlook.
The TACO trade—that’s Trump And Ceasefire Optimism, for those keeping score—took investors on an absolute roller coaster. But by Friday’s close, the gains were locked in. Stocks soared, oil plunged, yields dropped, and suddenly the recession fears that were dominating headlines just days earlier felt a lot less urgent.
Of course, inflation still accelerated 3.3% in March, so it’s not like everything’s perfect. But for a market that was genuinely worried about stagflation just a week ago, this is a pretty solid outcome. Sometimes the comeback is real.
