Life and death in one hour! "Two-week ceasefire between the US and Iran," the trading logic behind the major reversal in U.S. stocks

Byline: US Stock Investing Network

On Tuesday, April 7, US stocks staged a very typical V-shaped rebound.

During the trading session, the market was still pricing the worst-case scenario that “the situation in the Middle East could escalate into a full-scale crisis.” But by the close and in after-hours trading, funds quickly switched to a new expectation: “the conflict may not spiral out of control immediately, and there is still room for diplomacy.” It looks like it was just a day of back-and-forth moves up and down, but beneath the surface there is actually a very clear chain of cause and effect: the Strait of Hormuz, oil prices, inflation, and the Federal Reserve—these pieces are tightly bound together.

Early Panic Intensified In Tuesday’s early session, risk-off sentiment briefly swept over Wall Street. Trump issued an extremely hardline threat on social media, saying “the entire civilization could end tonight,” and set Tuesday at 8:00 PM as the final deadline for the Strait of Hormuz to open. Once that statement hit the tape, the market’s first reaction was not to debate the wording—it went straight to price in the worst outcome.

If the conflict really escalates, once the Strait of Hormuz faces sustained disruption, global energy transport would be impacted, and oil prices could keep climbing. If oil prices get out of control, inflation expectations would come roaring back, and the Federal Reserve’s room to cut rates this year would be further squeezed—possibly even facing again the dilemma of “inflation won’t come down and growth is weakening.”

That’s also why the Dow fell by more than 400 points at one stage during the day, and the S&P 500 also clearly dipped lower; meanwhile, money rushed into defensive assets like crude oil. What the market sold off early that day wasn’t only the risk of war, but also the macro risk that high oil prices could once again tie the Federal Reserve’s hands.

A Turn for the Better Before the Close But right when the deadline approached, there was a critical change. Pakistan’s Prime Minister Sharif publicly called on Trump to extend the final deadline by two weeks. He also urged Iran to open the strait for two weeks first, as a gesture of goodwill, and push all parties to implement a two-week ceasefire to create room for diplomatic mediation.

The meaning of this signal is very direct: it made the market realize that fighting might not start immediately tonight, and that there is still a window for negotiations. As long as the worst-case scenario is not immediately realized, the risk discount priced in earlier based on “full escalation” can be repaired first for a period.

So in the late session, you saw market sentiment start to warm up, with the indices rebounding noticeably from their intraday lows. Ultimately by the close, the Dow fell 0.18%, the Nasdaq rose 0.10%, and the S&P 500 gained 0.08%. Although it only looked like a flat up-and-down close on the surface, when you combine it with the intraday trajectory, this was clearly a rebound/repair.

US Stock Investing Network: Precise Layout

Today during the session, healthcare insurance stocks put in a very strong independent rally. Triggered by a positive Z government news release, the US Z government announced that the final reimbursement policy for 2027 Medicare Advantage (MA) is expected to result in a 2.48% payment growth for MA plans, far higher than the 0.09% in the preliminary proposal from early January this year. CMS said this plan corresponds to an added reimbursement scale of more than $13 billion; if risk adjustment is considered, the total industry payment uplift is close to 5%.

Benefiting from this boost, industry giant $UNH surged more than 9% in a single day.

And as early as March 23, we discovered—through real-time options order flow from US stock big data at StockWe.com—that big money was aggressively sweeping up shares. At that time, we detected a huge anomalous order with a total value as high as $2.6 million, and the buyer was extremely bullish on UNH.

Based on this data, we notified the options community that day to buy UNH call options—specifically a Call option expiring on April 24, 2026, with a strike price of $280, with bidding around $12.65.

Today’s strong surge in UNH once again confirms big money’s precise “sense” before policy changes. Currently, this options price has already reached $32.3—up nearly 3x!

That day, we also made a synchronized layout on $AAPL. And the entry timing was exactly when market sentiment was at its worst and the stock price was near its intraday low. $TSLA $NVDA

In the morning, Apple suffered a major negative shock. The stock slid sharply after news that the development progress for the foldable-screen iPhone was behind expectations. The market worried that during early-stage test production of Apple’s first foldable iPhone, the company encountered more engineering and technical problems than expected—worst case, the timing for the first batch of shipments could be delayed by several months.

This news directly hit investors’ expectations for Apple’s next-generation hardware innovation cycle, and it also led to a relatively concentrated wave of selling pressure on AAPL in the early session.

But it was precisely at the peak of this panic that we chose to act. At 11:27 AM (8:27 AM PT), we bought the underlying shares at $247.55, accurately capturing the bottom.

Meanwhile, at 11:15 AM (8:15 AM PT), we also prompted the VIP community to simultaneously buy an AAPL 2026 April 10 call option with a strike price of $255 and a buy price around $0.73.

After that, Apple’s stock price dipped, then climbed. Analysts pointed out that although there were issues during development, the company still moved forward with its plan to release its foldable phone in September. After-hours, Apple was at $259.3, up about 5% versus our underlying entry. And our options have already reached $2.6—up nearly 4x!

Trump Comes Around After Hours

After hours, Trump posted on social media saying he agrees to pause Iran’s bombing and attack operations for two weeks, on the condition that Iran “fully, immediately, and safely” opens the Strait of Hormuz.

He also said this decision was made after meetings with Pakistan’s Prime Minister Sharif and Pakistan Army Chief of Staff Asim Munir, adding that it would be a “bilateral ceasefire.”

More importantly, he added one more line: negotiations between the US and Iran on a long-term peace agreement have made significant progress, and Iran’s ten-point proposals have already become the foundation for moving negotiations forward.

Trump’s Iran official statement on truthsocial:

The core meaning conveyed by this image is:

First, thank Pakistan’s Prime Minister Sharif and army commander Munir for their mediation to end the regional war.

Second, state that the US put forward a 15-point plan; Trump accepted Iran’s 10-point plan’s overall framework, and is willing to use it as the basis for negotiations.

Third, propose a conditional statement: if attacks against Iran are stopped, Iran’s armed forces will stop defensive actions; and within the next two weeks, the Strait of Hormuz can achieve safe passage under coordinated and technical limitation conditions.

The after-hours market reaction was very direct: stock index futures surged straight up, and oil prices immediately plunged. Data showed that after the news broke, S&P 500 futures were up as much as 1.8%, Nasdaq 100 futures rose 2%, and Dow futures surged violently by 832 points; correspondingly, WTI crude fell as much as 14.36% to $96.73, and Brent fell 14.17% to $93.79.

Behind this kind of extreme volatility is a pricing logic like this: the Strait of Hormuz is the global energy throat; disruption there leads to higher oil prices, which in turn forces inflation expectations upward and threatens the outlook for interest rates. Now that the ceasefire expectation has emerged, the oil price pullback directly removes the “alarm” of the Federal Reserve being forced to raise rates or maintain high rates.

Earlier, the market’s plunge in essence was pricing in “the cost of war.” Now that there is a two-week buffer and the officials have hinted that the agreement is close to finalization, money naturally starts quickly repairing the valuations that were mistakenly marked down due to panic. As the consensus that “we’re not going to fight” strengthens, the market is accelerating to buy back the portion it fell.