A fragile geopolitical truce sent technology stocks soaring, but the Federal Reserve’s latest warnings are threatening to cut the party short. The Nasdaq 100 surged 2.90% on Wednesday, its strongest daily gain in weeks, fueled by news of a two-week ceasefire between the U.S. and Iran. The announcement, which included a pledge to reopen the Strait of Hormuz, triggered an immediate market rotation out of energy and into tech.
The relief was palpable. Oil prices plunged below $94 a barrel, with West Texas Intermediate crude closing down 16%. The CBOE Volatility Index (VIX) tumbled over 20% premarket on Thursday, nearing its historical average. This drop in perceived risk supercharged a rally in semiconductor and AI stocks. Nvidia, Meta, Tesla, and AMD jumped between 4% and 10%, while Micron Technology saw significant inflows. Delta Air Lines, a direct beneficiary of lower fuel costs, soared 12%.
However, the rally showed cracks almost immediately. Iran accused the U.S. of violating the agreement later on Wednesday, causing indices to pare some gains. Analysts at Evercore ISI noted that core issues like sanctions remain entirely unresolved, highlighting the ceasefire’s fragility.
Fed Throws Cold Water on Euphoria
Simultaneously, the release of the March FOMC meeting minutes provided a sobering counter-narrative. The document revealed that a majority of Fed officials see heightened upside risks to inflation and downside risks to the labor market, exacerbated by the Middle East situation. Some members advocated for additional interest rate hikes should inflation prove stubbornly above target. The central bank, which currently holds its benchmark rate at 3.5% to 3.75%, signaled only a single rate cut for the entire year of 2026, explicitly warning of stagflation risks.
This hawkish tone casts a long shadow over companies making massive capital expenditures. Microsoft, down over 21% year-to-date, faces investor skepticism over whether its quarterly $37.5 billion investments in data centers can deliver expected margin gains in a high-rate environment. Meta Platforms has lost 10.7% after guiding for annual expenses of up to $135 billion for its AI division.
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Technical Breakout Under Scrutiny
From a chart perspective, the surge propelled the Nasdaq 100 to its highest level since March 2026, breaking decisively above its 200-day moving average at 24,472 points. The move was supported by heavy volume, with 59 million shares of the QQQ ETF trading hands. Futures pointed to further gains premarket Thursday, with Nasdaq 100 futures up 3.28% to approximately 25,171 points.
The index now trades within a symmetrical triangle formation, bounded roughly between 24,112 and 26,054 points. A sustained close above the 25,200-point level would open the path toward testing the pattern’s upper boundary. The immediate focus is the psychological 25,000-point mark and the 50-day moving average at 24,720.
JPMorgan’s trading desk has turned tactically bullish following the ceasefire, seeing potential for a move akin to a post-liberation-day rally that could push the S&P 500 above 7,000. The bank pins this optimism on a strong upcoming earnings season, with the first major quarterly reports due in the coming days.
Yet the path forward is fraught. The nascent rally depends entirely on a smooth resumption of shipping traffic through the Strait of Hormuz and strict adherence to the ceasefire. Any deviation could quickly reignite the volatility that just subsided, forcing the market to reconcile fleeting geopolitical relief with the Fed’s enduring inflation fight.
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