Yesterday saw significant reversals in equities and oil. S&P futures were down >2% testing the 200d ma at the lows, before losses were cut in half ahead of the open. Equities initially came under some additional pressure but had recouped a good portion of the losses by the time European indices had closed and then surged in the final hour of after President Trump told CBS News that he believed the Iran conflict was closer to the end than the beginning. The S&P 500 ended the session up 0.8% after an intraday reversal of >2.5%. If you think that is extreme, check out oil. ICE Brent traded up to nearly $120 overnight before starting to pullback on press reports suggesting that G7 nations could tap strategic petroleum reserves and then took another sharp leg lower after President Trump’s comments trading back under $90 reversing all of the weekend gains. Trump held a press conference after the close in which he reiterated that he expects the war to end “soon, very soon” but not this week.

Markets are focused on one variable at this point and hanging on every word from the administration. The sharp reversal yesterday highlights that traders are afraid of missing out on the next “TACO” trade. S&P futures were up ~0.5% overnight but had turned modestly lower ahead of press conference with Secretary of War Hegseth and Joint Chiefs of Staff General Caine. Hegseth stated that today will be the most intense day of strikes inside Iran. ICE Brent traded between $90 - $95 overnight. G7 energy ministers met this morning to discuss the current situation. Shortly after the open IEA Executive Director Fatih Birol released a statement saying, “We discussed all the available options, including making IEA emergency oil stocks available to the market. IEA Member countries currently hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation.” There will be an extraordinary meeting of IEA Member governments later today. Oil prices broke back below $90 after the release and have traded down to ~$85 over the last hour as there are reports of ships starting to move through the Strait of Hormuz. This is helping equity markets move higher. As we head to print, the S&P 500 is up 42pts to 6,838 (+0.6%) trading just under its 100d ma, the Dow is up 427pts to 48,168 (+0.9%), while the Russell 2k is up 26pts to 2,580 (+1.0%).