Just eight days ago, International Energy Agency Chief Fatih Birol declared the world was facing the largest energy supply disruption in modern history.

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The blockade of the Strait of Hormuz, he said, was “more serious than the ones in 1973, 1979 and 2022 together.”

Twelve million barrels per day removed from markets — more than the two 1970s oil shocks combined. A global energy crunch twice as severe as the Ukraine crisis.

In less than two weeks, that thesis was fully dismantled by the stock market.

On Wednesday, the S&P 500 — tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) — pushed above 7,002 and printed a fresh all-time high, capping a 10% rally in just 11 sessions.

While the physical economy still reflects the worst energy shock on record, financial markets are already pricing a world in which it has passed — with companies effectively back to business as usual.

The S&P 500 is now trading higher than it was before the conflict began. In equity terms, the war never happened.

A Rally That Defies Reality

Oil remains near $90 a barrel — roughly $30 above pre-war levels. Traffic through Hormuz is still a fraction of normal.

Yet equities have staged a textbook V-shaped recovery.

“So as far as the stock market is concerned, the war is over until further notice,” Ed Yardeni, president of Yardeni Research, said this week.

According to Yardeni, the April 2026 rally follows the same pattern as last year’s explosive rebound that began on April 9, when Trump postponed his Liberation Day tariffs — another momentum-led V-shaped recovery from a geopolitical-driven sell-off.

Analysts on Wall Street haven't meaningfully adjusted their forecasts. Year-end targets for the S&P 500 have barely moved at around 7,500 points, despite the war in Iran. Yardeni is targeting the index at 7,700 — above the consensus.

Markets are not just optimistic — they are ahead of consensus, pricing resolution before it is visible in the data.

The White House has helped shape that repricing, first by securing a temporary ceasefire and, more broadly, by containing the risk of a sustained move in oil above $100.

Two Signals, One Must Break

On Wednesday, President Donald Trump declared the Strait "permanently open," even as tanker flows remain sharply constrained. He framed $90 oil as manageable and promised lower gasoline prices ahead of elections.

On the same day, AAA data shows gasoline prices remain elevated at $4.10 per gallon — still $1.12 higher than pre-war levels.

According to David Morrison, senior analyst at Trade Nation, investors are effectively betting that the war will end soon — a view reflected in the Brent forward curve, where futures prices through year-end trade well below current spot levels.

“But key to all this is not just an end to the war, but the complete reopening of the Strait of Hormuz, which remains under Iranian control. The U.S. continues to block shipping to and from Iranian ports in the region,” he added.  

Whether Trump has engineered a masterpiece of communication or one of misdirection may not matter — at least for now.

The S&P 500 is making new all-time highs. The worst energy disruption in modern history was declared less than 10 days ago.

One of those signals is wrong.

And the next phase of the market will be determined by which one.

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