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Yesterday the Dow posted its biggest single day since April 2025. Around 1,325 points higher. The S&P 500 added 2.51% to close near 6,783, and the Nasdaq rose 2.80% to about 22,635. Delta Air Lines closed up more than twelve percent on a Q1 beat.
Then the clock hit overnight, and the story started rewriting itself.
Iran’s parliamentary speaker accused the United States of breaching the two-week ceasefire less than 36 hours after it began. Tehran cited continued Israeli strikes on Lebanon, a drone it says crossed into Iranian airspace over Fars Province, and a dispute over uranium enrichment that Washington denies was part of the framework. Iran’s Revolutionary Guard Corps claimed shipping through the Strait of Hormuz had stopped again. The White House called the shipping claim false.
Oil heard enough. WTI clawed back above $95 in early Thursday activity after settling near $94 Wednesday, the biggest single-day drop in crude since April 2020. Brent followed back into the mid-$90s. S&P, Nasdaq, and Dow futures were pointing modestly lower before the cash open.
What matters:
The ceasefire is cracking on day two. Yesterday’s full-throated relief rally got all of one session to enjoy itself. Cyclicals that ripped on the ceasefire are the first to give it back, and the bid under oil-linked names is already reasserting.
The FOMC minutes released yesterday afternoon were more hawkish than the dot plot alone suggested. Seven of nineteen participants now project no cuts at all this year. Both headline and core PCE projections were revised up to 2.7% from 2.5%. The committee was already worried about oil pass-through before yesterday’s ceasefire unwound at dawn.
Delta (DAL) beat the print but guided Q2 adjusted earnings to a range of $1.00 to $1.50, below the $1.41 consensus. Management said fuel expense will be roughly $2 billion higher this quarter and that capacity growth will be “meaningfully reduced.” That is a real-world repricing the entire transport complex now has to swallow.
CPI for March lands Friday at 8:30 AM ET. Consensus is running around 0.9% month over month for headline, which would translate to a year-over-year jump from 2.4% in February into the high-threes. Core is expected closer to 0.3%.
Weekly jobless claims print at 8:30 AM this morning. Last Thursday’s read came in around 202,000, a better-than-expected number. Another low print extends the “labor is fine, inflation is the problem” framing the Fed is already pricing.
Meanwhile.
The airlines are the clearest day-two signal. Delta’s guide anchors the read-across for the group. American (AAL) and Alaska Air (ALK) both report next week. Both run leaner hedge books than Delta, which means a fuel shock flows straight through to the operating line. Southwest (LUV) hedged more aggressively than peers historically but has scaled those programs back since 2023, and its domestic-heavy route network is the least diversified way to absorb a global jet fuel spike. If Delta is pulling capacity, Southwest’s incremental unit cost conversation gets much harder. Watch for mid-month guidance pre-announcements, not just the quarterly prints.
Tanker equities sit on the opposite side of the same trade. War-risk premiums on Hormuz-bound vessels are running around 1% of hull value, renewable weekly, versus roughly 0.25% pre-conflict. Ships with US, UK, or Israeli nexus are fetching multiples of that. Those are revenues for the shipowners, not the oil producers. Frontline (FRO) and International Seaways (INSW), both pure-play crude tanker operators with heavy VLCC exposure, have been the cleanest way to own the rate environment. Spot market exposure in their fleets translates higher day rates into earnings almost immediately. The risk on these names is not rate compression. It is a ceasefire that actually holds. Yesterday that risk briefly looked real. This morning it does not.
The integrated majors are the third leg. Exxon Mobil (XOM) trades around 14 times forward earnings with a dividend yield near 3.2%, and its free cash flow coverage of the dividend holds even in a $70 WTI environment. Chevron (CVX) sits closer to 13 times forward with a yield around 4.5% and has been leaning into capex discipline that pushes incremental free cash flow higher in a $90-to-$100 WTI world. Neither name rips on a single headline the way mid-cap E&Ps do. But both are the ballast. If crude holds above $90 into the summer driving season, the buyback and dividend flow at these two is the kind of high-quality income stream institutional allocators cannot ignore when every other yield alternative sits below 5%.
The Fed is boxed.
Here is the quiet part the minutes made loud. If Friday’s CPI prints anywhere near the 0.9% headline consensus, the June cut leaves the curve, and September becomes a coin flip. Seven participants already see zero cuts this year. Two more defections and the median dot moves. A hot March CPI plus an unresolved oil shock is the exact scenario the committee spent most of March worrying about, and it is the one that actually showed up.
The 10-year Treasury is sitting around 4.3%, gold is holding in the mid-$4,000s per ounce, and Bitcoin is hovering around $72,000. None of that tells you the rally is wrong. It tells you the rally is narrow and conditional. Oil sets the terms this week.
Three things to size this morning.
Airlines into their prints, with Delta’s capacity commentary as the template. Tanker names while the insurance premium picture stays elevated. And the integrated majors as the lower-beta way to stay long the oil trade without getting whipsawed on every headline out of Tehran.
The reflex yesterday was to buy the ceasefire. The trade this morning is to respect the calendar. CPI tomorrow. Bank earnings start next week with JPMorgan (JPM) kicking off Q1 reporting season into a yield curve that does not look anything like the one the consensus was modeling in January.
