April 14 Market Overview: The S&P recovers all war-related declines, Nasdaq hits nine consecutive gains

Author: Deep Tide TechFlow

What happened over the weekend: 21-hour negotiations break down, U.S. blocks the Strait of Hormuz

Before writing today’s market update, we must first rewind 48 hours.

On Saturday, Vance, Vitkov, and Kushner led a 300-person U.S. delegation to the Serena Hotel in Islamabad, sitting face-to-face with a 70-person delegation led by Iranian Speaker of Parliament Ghalibaf and Foreign Minister Araghchi. This was the highest-level direct contact between the U.S. and Iran since the 1979 Iranian Revolution.

After 21 hours, Vance stepped out of the hotel and told the cameras: “They chose not to accept our terms.”

The core disagreement boiled down to two words: nuclear weapons. The U.S. red line was very clear: stop all uranium enrichment, dismantle major enrichment facilities, hand over more than 400 kilograms of highly enriched uranium believed to be buried underground, cease funding Hamas, Hezbollah, and Houthi militias. Iran’s position was equally non-negotiable: continue controlling the Strait, retain uranium enrichment rights, lift all sanctions, compensate for war damages, and withdraw troops from the Middle East.

Iranian Foreign Minister Araghchi’s statement was more nuanced: “We are just one step away from signing the memorandum of understanding, but the U.S. keeps moving the goalposts.” Trump’s words were more straightforward: “Most of the points have been agreed upon, but the one that matters most—the nuclear issue—was not resolved.”

Pakistan was shocked by the rapid breakdown of negotiations, as they had expected days of talks to gradually narrow differences. Vance’s departure after 21 hours was seen as a signal of unilateral termination of negotiations.

A few hours later, Trump announced on Truth Social: the U.S. Navy will “immediately” impose a blockade on the Strait of Hormuz, intercept all ships attempting to enter or exit Iranian ports, and seize any ships paying “illegal tolls” to Iran. U.S. Central Command confirmed the blockade would take effect at 10 a.m. Monday (Eastern Time), targeting all ships entering or leaving Iranian ports, but ships headed to non-Iranian destinations could pass freely.

This created an absurd situation: the strait now has two layers of blockade. Iran has controlled who can pass since the first day of the war, and now the U.S. is blocking Iran’s ports from the other side. Two hostile powers are guarding each end of the strait, with over 800 stranded cargo ships and more than 230 fully loaded oil tankers in the middle.

UK Prime Minister Sunak explicitly stated he would not join the U.S. blockade. Intelligence indicates China is planning to supply Iran with air defense weapons. Trump responded: “If China does that, China will have big trouble.”

The market’s reaction in futures was: S&P 500, Nasdaq, and Dow futures all fell over 1%. Oil prices surged above $104.

But Vance left with a parting message: “We left a final offer. Let’s see if Iran accepts.” The ceasefire agreement remains on paper until April 22.

U.S. stocks: From a 400-point plunge to a 300-point gain, a one-sentence reversal

On Monday morning, the market faithfully reflected the weekend’s bad news. The Dow plunged over 400 points (-0.9%), the S&P 500 fell 0.4%, and the Nasdaq dropped 0.5%.

Then Trump said six words: “The other side called us.”( “We’ve been called by the other side.”)

This vague hint suggested Iran might still want to negotiate, enough to cause short-sellers to panic. The Dow recovered from -400 points to +301 points, with an intraday swing of over 700 points. The S&P 500 closed up 1.02% at 6,886.24, its highest close since the outbreak of war, also meaning it has fully recovered all the losses during the 40 days of conflict. The S&P’s year-to-date return turned positive again at +0.05%.

Nasdaq rose 1.23% to 23,183.74, marking the ninth consecutive day of gains—the longest streak since 2023.

Tech stocks led the rally. Oracle surged 13% (showcasing AI capabilities at the client summit), Palantir gained 3%. Software stocks rebounded after last Friday’s sell-off. However, Goldman Sachs, after posting its second-highest quarterly profit ever, fell 1.9%, a classic “buy the rumor, sell the news” move. Airline stocks fell over 2% collectively, affected by storms and rising oil prices.

VIX closed at 19.12, remaining below 20, the lowest level since the war began.

Ed Yardeni wrote in his Monday report: “Financial markets may be learning to coexist with the Middle East war, just as they have learned to coexist with the Russia-Ukraine war.” He maintained his year-end target for the S&P 500 at 7,700.

Fundstrat’s Tom Lee said on CNBC with a meaningful tone: “Markets have a very strong ability to price in outcomes in advance. I believe the reason stocks are rising is that we will ultimately get a favorable result.” He cited WWII as an example: the U.S. stock market bottomed in May 1942, when the U.S. had just entered the war and troops had not yet been deployed on a large scale. Markets always reach the end before the war does.

Q1 earnings season officially kicks off. FactSet data shows expected earnings growth of 12.6%, marking the sixth consecutive quarter of double-digit growth. Major banks like Goldman Sachs, JPMorgan, Citi, Wells Fargo, Morgan Stanley, and BofA will report this week.

Oil: Double blockade, is $97 the new normal?

Oil prices experienced intense volatility on Monday, settling around $97 per barrel (WTI).

Over Sunday night, prices surged above $104 (+8%) due to the blockade news, but as Trump’s “the other side called us” hint spread, prices retreated from the high. Brent settled near $97.

The market faces an unprecedented pricing dilemma: Iran’s blockade of the strait + U.S. blockade of Iranian ports = double blockade. CENTCOM clearly distinguishes between the two: the blockade targets Iranian ports, and ships headed to non-Iranian destinations can pass freely. But in practice, who can guarantee that an oil tanker passing through the strait won’t be intercepted by Iran or the U.S.?

Lloyd’s List Intelligence data shows that transit through the strait is now “completely stalled.” Ships turned around after the blockade order was issued. IEA Director Birol previously warned that the strategic oil reserves released in March would be nearly exhausted by mid-April.

Goldman Sachs’ latest report maintains the view that “if the strait remains closed for another month, Brent prices could average over $100 for the year.” Kobeissi Letter’s analysis is more straightforward: “Trump’s long-term plan seems to be to first blockade the strait, gain control, then gradually open traffic. But if this path is feasible, it will still take at least two more months to further restrict transit.”

Two months. This means U.S. gasoline prices will continue to stay above $4, inflation pressures will persist, and the Fed’s rate cut window remains closed.

Gold: $4,733, waiting at the crossroads

Gold prices dipped 0.3% on Monday to $4,733 per ounce, almost unchanged.

Negotiation breakdown and blockade news should have boosted safe-haven demand, but a stronger dollar (safe-haven funds flowing back into USD) offset gold’s gains. Gold is currently trapped in a broad range of $4,300–$5,600, a zone that has not been broken since the war began.

State Street’s view is: if oil normalizes to $80–$85, gold could “quickly return above $5,000.” But if Brent surges past $150, forcing the Fed to hike rates, gold could test a structural bottom around $4,000–$4,100.

Current gold prices are nearly exactly at the median forecast of 30 analysts surveyed by Reuters for 2026, at $4,746.50. The market is waiting for a directional signal, which depends on when the Strait truly reopens.

Cryptocurrency: BTC $72k, resilience that war can’t kill

Bitcoin rose about 2% on Monday to around $72,100, showing surprising resilience that even analysts didn’t expect.

Looking back at the weekend: negotiation breakdown + blockade announcement → BTC dropped from $73,000 to $70,600 → Monday, with the “the other side called us” news, rebounded above $72,000. Throughout this process, BTC’s decline was much smaller than expected. When the war broke out on February 28, BTC fell 12% in one day. Now, facing negotiation failure + Strait blockade, the decline is only 2-3%.

FX Leaders analyst wrote: “Bitcoin didn’t crash due to the blockade, and that in itself is a signal. It’s building support and gearing up for a strong rally.”

$70,000 has become a solid bottom tested multiple times. BTC was at $66k before the ceasefire, surged to $73,000 after, and held above $70,000 after the negotiation failed. The net effect of 40 days of war is a trading range from $66K to $72K, not a collapse.

CoinDesk’s analysis framework is most noteworthy: “If oil prices continue to fall 15-16%, the futures market will reprice the probability of rate cuts in 2026, which is a structural tailwind for non-yield assets (including Bitcoin).” Currently, about $6 billion in leveraged shorts are clustered between $72,200 and $73,500. If BTC breaks through this zone, a short squeeze could push the price toward $80,000.

Ceasefire expires on April 22. CLARITY bill roundtable on April 16. Fed FOMC meeting on April 28-29 (possibly Powell’s last). These three dates will define BTC’s direction in late April.

Today’s summary: The market has chosen to believe

After the weekend of April 14, when negotiations in Islamabad broke down and the U.S. blocked the Strait, the market responded with a strong bullish candle:

U.S. stocks: The S&P recovered all war losses to 6,886.24 (+1.02%), turning positive for the year. Nasdaq’s nine-day rally is the longest since 2023. Trump’s phrase “the other side called us” reversed a 400-point plunge.

Oil: WTI retreated from the weekend high of $104 to around $97. Double blockade is the new reality, but the market bets on an eventual agreement.

Gold: $4,733 flat, stuck in the $4,300–$5,600 range, waiting for the Strait and Fed to give direction.

Cryptocurrency: BTC up 2% to $72,100. Negotiation failure + blockade only caused a 3% dip—proof that the war’s resilience is unstoppable. $70,000 is the new strong bottom.

Tom Lee cited WWII: in May 1942, right after the U.S. entered the war, the stock market bottomed. Markets always reach the end before the war does.

Wall Street is making a big bet: no matter how tortuous the process, the U.S. and Iran will eventually reach an agreement, the Strait will reopen, oil prices will fall, and inflation will ease. The Dow has rebounded nearly 3,000 points from its war lows. The S&P has recovered all war losses. Nasdaq has risen nine days in a row.

Either this is market foresight—like the stock market in 1942 seeing victory in the darkest hour—or an expensive collective illusion, as the Strait remains double-locked, 800 ships are still waiting, the ceasefire expires in 8 days, and there’s no solution yet to the nuclear issue.

But at least today, the market has chosen to believe.