Markets Rally as Trump Extends Ceasefire Without Deadline
The ceasefire extension sent a clear message to global markets: risk-on is back. Japan’s Nikkei climbed 236.69 points to close at 59,585.86, a record high and the strongest major index in the world, now within striking distance of the 60,000 barrier. Taiwan’s chip sector surged to its own record. NASDAQ added 197.33 points (+0.81%) to 24,457.29, with QQQ gaining +0.836% to 649.72. The DJIA is pressing toward 50,000. The Fear & Greed Index reads 68, Greed, up sharply from 15 just one month ago and from an extreme fear level of 13 a year ago. Asian markets led the move; the US confirmed it.
The 250-SMA remains the key structural level to watch as this rally builds. NASDAQ’s SMA(250) sits at 21,752, well below current prices, confirming the index is in recovery mode. For context on why buying into strength like this still makes sense, see our 250-SMA strategy breakdown.
World Observation: Iran’s Kharg Island and the Sedimentation Trap
This ceasefire is one-sided. Trump has extended it indefinitely, but Iran’s IRGC has made no matching commitment and continues targeting commercial vessels in the Strait of Hormuz. Three ships have now been seized or targeted. The US is not negotiating with the Iranian Parliament Speaker because Washington considers his representative authority insufficient. Iran must submit a compromise plan first.
The deeper story is Kharg Island. That single facility handles roughly 90% of Iran’s oil exports and holds 32 to 34 million barrels of storage capacity. With the US naval blockade cutting off exports, Iran is still pumping 1.5 to 2 million barrels per day into tanks that are days away from being full. Once full, wells must shut in. When older reservoirs lose pressure and then restart, permanent damage occurs: future output could be cut by half. Iran loses an estimated $435 million per day under current blockade conditions, and oil revenue represents approximately 80% of its export earnings and 25% of its GDP. This is what Daniel Yue calls the “Economic Fury” strategy: turn Iran’s greatest asset into a liability without firing a single shot at the oil fields. For earlier analysis of this conflict’s trajectory, see Firepower Leads to Ceasefire and Epic Fury and Terafab.
Meanwhile, USS George Bush carrier strike group is moving north from South Africa and USS Boxer amphibious assault ship group is departing Hawaii toward the Middle East. The combined force of 3 heavy and 2 light carrier groups surpasses the scale of the 1991 Gulf War. Trump is using the ceasefire window to finish deployment. This is two-handed preparation.
Secondary Developments: SpaceX, Musk, Fed Nominee, and Tariff Refunds
SpaceX announced a partnership with AI coding startup Cursor, including an option to acquire the company for $60 billion later this year. The timing matters: SpaceX is preparing for an IPO and has just absorbed xAI. Elon Musk separately floated a “universal high income” concept on X, arguing that AI-driven unemployment requires the government to distribute money directly to citizens. The proposal drew immediate pushback from academics and economists. For background on how AI and semiconductors are reshaping the investment landscape, see Battle of AI.
Fed Chair nominee Kevin Warsh told the Senate Banking Committee he will act as an independent decision-maker, not a presidential instrument. He called for structural reforms to the Fed’s inflation framework and communication approach but gave no guidance on the near-term interest rate path. The tariff refund system launched Monday, covering more than $166 billion in collected taxes. Apple and Amazon have not yet applied. Trump’s comment: “That’s smart.” For a deeper read on how tariff policy is shaping markets, see 245 Tariff and Tariff War.
Global Round-Up
OpenAI’s GPT-5 has been released and is reported to have passed the Turing Test at AGI (super AI) level. Merck signed a multi-year agreement with Google Cloud worth up to $1 billion to deploy AI in research, manufacturing, and business operations. WTI crude oil found support at its Bollinger Bands floor and rebounded back into the Ichimoku Cloud. Investors should note that oil prices rising alongside a market rally is the correct outcome when the geopolitical picture is being resolved through economic strangulation rather than military confrontation. See Mind the Oil Price for the longer oil framework.
What Investors Should Do Now
- Treasure hunt with discipline: Market sentiment has reverted to late-2025 levels. There are more attractive stocks than most investors have cash to buy. The most reliable method remains monthly instalment buying on income day.
- Focus on Top 10 by market cap: Stocks like NVDA, GOOG, TSLA, and TSM have the recovery power to survive any crash and mean-revert over a full year. Buying monthly brings your average cost close to the annual average price.
- Consider ETF allocation of 30% to 60%: VOO tracks the S&P 500, which has delivered 12% to 13% annually, doubling capital in roughly 8 years. QQQ runs slightly faster than NASDAQ. DIA pays a monthly dividend. ETFs guarantee you move with the market, not against it.
- Stay alert to the Hormuz timeline: The next few days are critical. If Kharg Island storage fills and wells shut in, oil prices will spike sharply. Position accordingly with energy exposure. See Mind the Oil Futures for tactical framing.
- Watch the NVDA and AI complex: GPT-5’s AGI-level release and the SpaceX-Cursor deal signal that the AI capex cycle is accelerating again. The Merck-Google Cloud deal confirms enterprise AI spend is broadening beyond tech into healthcare.
Key Takeaway: Trump’s open-ended ceasefire is not a peace deal; it is a deployment window, and markets are correct to rally while Iran’s oil infrastructure counts down to collapse.
Related reading: Firepower Leads to Ceasefire · Mind the Oil Price · 250-SMA Strategy Read previous US Stock Express editions here.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.