Last Thursday we wrote that the Strait of Hormuz was "still the wildcard." On Saturday, Iran closed it, mined it, and started firing on ships trying to cross.

The ceasefire that powered the S&P to 7,000 and gave the Nasdaq its longest winning streak since 2009 is now on the brink of collapse. It expires in two days. Iran says it's not showing up to the next round of talks. And the US Navy is deploying underwater mine-clearing robots to try to reopen the most important oil chokepoint in the world.

Futures are red across the board this morning. Oil is up over 5%. And the Energy Secretary said over the weekend that gas prices might not fall below $3 a gallon until 2027.

More below.

This is not financial advice. Always do your own research. Past performance doesn’t guarantee future results.

Here's the timeline.

April 8: The US and Iran announced a two-week ceasefire, brokered through Pakistan. Markets exhaled. Oil dropped. Stocks started climbing.

April 15: The S&P 500 closed above 7,000 for the first time ever, fueled by ceasefire optimism and strong earnings. The Nasdaq was on an 11-day winning streak.

April 16: The Nasdaq extended its streak to 12 days (longest since July 2009). The market started more fully pricing in peace.

April 17: Iran accused the US of violating the terms of the deal by maintaining its naval blockade of Iranian ports. Tehran reimposed restrictions on the Strait of Hormuz.

April 18: Iran fully closed the strait and began firing on commercial vessels. Two Indian-flagged ships were hit by gunfire from Iranian gunboats. A container ship took a rocket. Merchant vessels reported gunfire as they tried to cross.

April 19: The US Navy seized an Iranian-flagged cargo ship in the Gulf of Oman. Iran vowed a response. Trump said he's sending negotiators to Pakistan on Monday (today) for fresh talks.

April 20 (Sunday): Iran said it won't attend the talks, citing "excessive demands, unrealistic expectations, and repeated contradictions" from the US. The ceasefire expires on Wednesday.

That's the whole arc. Fourteen days from "peace is close" to "ships are getting shot at in the Strait."

The rally was real, but it was built almost entirely on two things: ceasefire optimism and earnings momentum. The earnings are still solid. The ceasefire is falling apart. That's why futures are down across the board this morning (Dow -0.44%, S&P -0.40%, Nasdaq -0.39%) while oil is surging over 5%.

We're not panicking. But we're paying attention. If the ceasefire collapses tomorrow without an extension, the Strait of Hormuz situation could get significantly worse before it gets better. Clearing the mines alone could take two to three weeks, according to defense analysts. And every day the strait stays closed, global oil supply tightens further.

On the other hand, there are mixed signals from Tehran. Despite publicly rejecting the talks, Iranian sources have indicated a delegation might still show up in Pakistan on Tuesday. The public posturing could be negotiation leverage, not a final answer. Both sides have reasons to make a deal. Whether they can get there this week is the question.

If a deal happens: oil drops, stocks resume the rally, and the 7,000 level on the S&P holds. If it doesn't: oil goes higher, the rally stalls, and energy and defense become the only safe corners of the market. We think it's worth being positioned for both scenarios right now.

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Oil surged over 5% in premarket trading. Brent crude is pushing back toward $100 and WTI is approaching $95 after Iran fired on commercial ships and closed the strait. US crude inventories dropped by 9 million barrels last week (analysts expected flat), and with the strait shut, supply pressure is only building. Energy Secretary Chris Wright said Sunday that gas prices may not fall below $3 a gallon until 2027, walking back his earlier prediction from March that prices would drop within "weeks."

Meta is targeting May 20 for the first wave of layoffs. About 8,000 employees (roughly 10% of the workforce) will be let go, with more cuts planned for the second half of 2026. The restructuring is AI-driven: teams are being reorganized into AI-focused "pods," engineers are being transferred into a new "Applied AI" organization, and the cuts are hitting Reality Labs, recruiting, sales, and global operations. Since 2022, Meta has now cut roughly 25,000 jobs total.

Weight-loss drug maker Kailera surged over 60% on its Nasdaq debut. The company raised $625 million in the largest biotech IPO since 2021. Kailera's lead drug is a once-weekly injectable GLP-1/GIP receptor agonist for obesity. Shares priced at $16 and closed at $26. The GLP-1 space continues to attract massive investor interest.

Hedge funds' Treasury bets have hit record levels. According to Apollo, hedge funds now hold roughly 8% of the $31 trillion US Treasury market, with over $6 trillion in leveraged "basis trade" positions. The strategy exploits tiny price differences between cash Treasuries and futures using heavy leverage. If these positions unwind suddenly (say, during a geopolitical shock like the one happening right now), it could send shockwaves through the global bond market.

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