Wall Street has reacted positively to the extension of the U.S.-Iran ceasefire. The S&P 500 and Nasdaq both closed at record highs. Extending this rally is Tesla popping 3%+ after hours (despite being down 11% year-to-date), after posting 16% revenue growth in Q1. So: good vibes on Wall Street.
However, shortly after the U.S. extended the ceasefire, Iran’s navy seized two container ships in the Strait of Hormuz. WTI crude oil rose to around $92 per barrel, while Brent crude oil rebounded above $101 per barrel.
So, bulls appear in control of both Stocks and oil. Does this suggest a disconnect in the market? Or is the oil market overreacting? The unconventional Pentagon Pizza Index which monitors pizza orders near the Pentagon (an informal indicator of elevated military readiness), may suggest the ceasefire is not in jeopardy even with the recent development in the Strait.
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