US shares rose on Thursday, with the Dow up about 300 points (0.7%), the S&P 500 up 0.6%, and the Nasdaq up 0.7%. The move extended a two-day rally despite doubts about the two-week US\u2013Iran ceasefire.<\/p>\n
The Dow traded above 48,000 after rebounding from the 200-day EMA near 46,700 and retaking the 50-day EMA around 47,550. Daily Stochastic RSI moved above 60, with resistance near 48,200.<\/p>\n
Late in the session, Israel\u2019s Prime Minister Benjamin Netanyahu said he instructed his cabinet to begin direct talks with Lebanon. Negotiations are expected next week at the State Department in Washington, focusing on disarming Hezbollah and establishing peaceful relations.<\/p>\n
Iran\u2019s parliamentary speaker, Mohammad Bagher Ghalibaf, warned that continued Israeli strikes on Hezbollah would carry consequences. After the announcement, the S&P 500 turned positive and oil pulled back from intraday highs.<\/p>\n
WTI traded above $98 a barrel after briefly topping $100, while Brent rose about 1% to above $95. The prior session included an intraday fall of over 10% after the ceasefire announcement.<\/p>\n
The Strait of Hormuz remained functionally closed, with about 230 oil-laden ships reportedly waiting. US Vice President JD Vance is due in Islamabad on Saturday for direct talks with Iran.<\/p>\n
Core PCE was 0.4% MoM in February and 3% YoY, down from 3.1%, while Q4 GDP was revised to 0.5% from 0.7%. Jobless claims rose to 219K versus 210K expected, personal income fell 0.1% versus 0.3% forecast, and spending rose 0.5%.<\/p>\n
Meta shares rose over 3% after launching the Muse Spark AI model, following a 6.5% rise on Wednesday. On Friday at 12:30 GMT, CPI is forecast at 0.9% MoM and 3.3% YoY, with Michigan sentiment seen at 52 versus 53.3.<\/p>\n
The current market rally is built on a fragile two-week ceasefire, creating significant uncertainty for the weeks ahead. Given the Dow’s sharp bounce off its 200-day moving average, we see this as an opportunity to buy volatility at relatively lower levels. The CBOE Volatility Index (VIX), which likely spiked above 35 during the conflict, has likely receded, making protective options strategies more affordable.<\/p>\n
With the Dow testing resistance near 48,200, outright long positions carry substantial risk. We believe using derivatives to define risk is prudent, such as buying call spreads to bet on a continued but limited rally, or purchasing protective puts below the key 46,700 support level. This provides a hedge in case the Israel-Lebanon talks falter or the US-Iran ceasefire breaks down.<\/p>\n
The situation in the Strait of Hormuz remains the most critical variable, with 230 oil-loaded ships still waiting to pass. Historically, this chokepoint handles over 20% of the world’s daily oil supply, and a prolonged closure could send WTI crude prices, now at $98, well above $120 per barrel. Buying call options on oil futures or related ETFs offers a direct way to hedge against a re-escalation of hostilities.<\/p>\n
The upcoming March CPI report is a major catalyst that could easily halt this equity rally. We remember how in 2022, persistently high inflation forced the Federal Reserve into aggressive rate hikes that sent the S&P 500 down over 19% for the year, even as the economy slowed. A hot CPI print tomorrow could revive rate hike fears and erase the recent market gains almost overnight.<\/p>\n
Beyond the immediate geopolitical risks, the economic data shows a weakening foundation, with Q4 GDP revised lower and jobless claims rising. The drop in personal income is particularly concerning for future consumer spending. We should consider layering in longer-dated puts on broad market indices as a strategic hedge against the growing risk of a recession later this year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US stocks extended rally as Middle East tensions eased; Dow topped 48,000, oil volatile, inflation data awaited.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44571","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44571"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44571\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}