US and Iran Agree to Two-Week Truce: Is the Bull Market Really Back?

Last night, the nerves of the global financial market were stretched to the limit. The global financial markets were pushed to the absolute breaking point. With less than 90 minutes remaining before President Trump's infamous "8 p.m. Tuesday" deadline, this President once again showcased his signature art of negotiation. Wall Street has a widely circulated nickname for this maneuver—TACO (Trump Always Chickens Out, referring to a retreat after maximum pressure). In a series of posts on Truth Social, Trump announced that, following a plea from Pakistani Prime Minister Shehbaz Sharif, he agreed to suspend the planned "massive strikes" on Iranian power plants and bridges, giving diplomacy a two-week window.

This seemingly "impromptu" ceasefire was, in fact, the result of days of behind-the-scenes orchestration by Pakistan. Rather than a unilateral act of mercy from Trump, it was a mutual step back from the abyss. Iran presented a 10-point peace proposal that Trump described as "workable" and committed to reopening the Strait of Hormuz. In return, the United States stood down its fully armed and ready combat aircraft. On social media, Trump stated bluntly:  "We're going to give peace a chance, but I am ready to go!"

The "revenge" frenzy of global assets: from the Nasdaq to BTC

After the news was released, the global financial markets instantly shifted from a "war panic" mode to a "peace dividend" mode. This emotional release was intense and direct. Nasdaq futures and the S&P futures directly embarked on a wild rally, with astonishing gains. It was discovered that the technology stocks that people had previously been reluctant to buy due to concerns over escalating war and supply chain disruptions had now become the most sought-after treasures. A large amount of capital was fleeing from government bonds and cash, and was rushing frantically towards the AI and chip sectors. 

The most interesting aspect is the "synchronicity" of asset trends. Although the risk of war has decreased, Bitcoin did not fall due to the reduced demand for hedging. Instead, it soared directly due to the return of market confidence. Gold and silver also strengthened after a brief fluctuation, taking advantage of the weakening of the US dollar, and even broke through the recent rebound highs. This "unified rise of all assets" situation indicates that the capital's craving for peace has already been suppressed to the extreme.

The "massive drop" in oil prices? You might have to wait a little longer at the gas station

During this frenzy, the international crude oil prices did indeed drop in response. Brent crude oil plunged by approximately 15% at one point, quickly falling below the $100 per barrel mark. But if you were expecting a cheaper price for your fuel this evening, you might be disappointed. There is a classic economic logic at play here, known as "lag". 

The oil currently sold at the gas station was purchased by the owner at a "war price" two weeks ago as an inventory. According to business principles, the owner must first sell off the expensive oil before purchasing the cheaper new oil. This phenomenon of "rising like a rocket and falling like a feather" indicates that the decline in international oil prices may take one to two weeks to be reflected on the price tags at your local gas station. Although the stock market reflects expectations for the next few years, so the Nasdaq can surge instantly, physical trade reflects past costs, so the decline in oil prices always occurs half a beat later.

Be vigilant about sudden news

Although the current celebration is genuine and the stock prices are indeed rising in response, don't forget that these 15 days are merely a "pause". 

Risk point: What if the negotiation fails after 15 days? Or what outrageous remarks might Trump make on Truth Social again? 

Suggestion: Regarding the investment pace, do not go all-in at once. If you are considering entering now, it is recommended to build your position in stages. Consider these 15 days as an "observation period". If the negotiations proceed smoothly, then gradually increase your investment.

Conclusion

Overall, I believe that in the next two weeks, the stock market will exhibit a kind of "restorative heat". 

First, go with the flow. The current market situation is driven by "peaceful expectations". Do not attempt to short sell forcefully at this time; doing so would be contrary to the global risk appetite.

Second, stop when you see progress. If you have already earned a 3% or even 5% rebound gain within a short period, you may consider selling off a portion to secure your profits. After all, the 15-day negotiations will be the key factor in determining whether it is a "bull market" or not. 

Now is a good time to make money, but make sure to secure your safety belt and be ready to deal with any sudden changes in Trump's Twitter posts.