In 30 seconds: The US-Iran war has triggered a major oil supply shock, with the Strait of Hormuz disrupted, global oil demand forecast to contract for the first time since 2020, crude stocks drawing rapidly, and governments releasing strategic reserves and cutting fuel taxes to cushion the blow. The S&P 500 has surged back from its March lows in a sharp V-shaped recovery, approaching all-time highs with a 10% gain in 10 trading days, driven largely by tariff and Iran-war policy reversals dubbed the 'TACO trade.' March US Producer Price Index came in well below consensus forecasts at +0.5% month-on-month and +4.0% year-on-year, offering some relief to markets and the Fed, though energy prices and tariff pass-through remain key inflation risks. Viktor Orban was ousted in a landslide Hungarian election, while in the US, Kevin Warsh disclosed over $100 million in financial interests as his Federal Reserve chair nomination accelerates ahead of Powell's term expiry, with Treasury Secretary Bessent signaling rate cuts could eventually resume.
The numbers are starting to tell a story that policymakers would rather not read aloud. Just a month earlier, the agency had penciled in growth of 700,000 barrels per day. That is a swing worth pausing over. Crude and condensate stocks have been drawing at 10 million barrels per day through the first 9 days of April, according to Vortexa. During the first 24 hours of the US blockade, 6 merchant vessels were directed to turn around, and none made it through. Eurasia Group argues that what Iran has achieved with the Strait of Hormuz is likely to be more long lasting than US tactical gains, which it calls temporary. The IMF's worst case already envisions oil at $110 this year and $125 next, with global inflation hitting 6% and growth slumping to 2%. At least one government has already moved: Canada's Prime Minister suspended a fuel excise tax until Labor Day weekend.
The same S&P 500 additional gain needed for new all-time high driving Iran War Disrupts Oil Markets and Global Economy is also a factor in S&P 500 Stages V-Shaped Recovery Toward All-Time Highs.
S&P 500: 6,967.38. The market has gained approximately 10% in 10 trading days. If you find that disorienting, good. You are paying attention. The pattern is straightforward. The president announces something destabilizing, markets crater, the president reverses himself, and markets rip higher. The S&P 500 has logged 4 sessions with gains exceeding 1% in the past two weeks. Volatility, naturally, has collapsed. The VIX settled at 18.36, and over the past two weeks has fallen 38%, the 7th biggest volatility crash in history. Breadth has been broad: the S&P 500's 10-day advance/decline line reached the 95th percentile heading into Tuesday, with Real Estate breadth hitting the 99th. Financials % of stocks above 50-DMAs climbed to 63.6%, the highest since 1/14. S&P 500 up ~10% in 10 trading days. Intel is the most overbought stock in the S&P 500.
The prior core monthly figure was itself revised down to 0.3%. So the pipeline is, for now, cooperating. Dig into the components and you find airline passenger services prices jumping 2.8%, while margins ticked up only 0.3%. US tariff revenue peak: $31 billion. One research firm noted that plans to raise selling prices have actually slid even as oil costs have risen, suggesting limited pass-through. The broader small business mood is souring. That is not the posture of businesses about to push aggressive price increases. The Treasury Secretary framed the current shock as transitory, arguing the Fed is right to wait and see. Over the past five years, producer prices have risen a cumulative 25%, averaging 4.6% annually. The question is whether this month's soft print is a genuine breather or the last clean reading before tariff costs arrive in earnest.
The same Scott Bessent driving US PPI Inflation Comes in Softer Than Expected is also a factor in Hungary's Orban Voted Out; Kevin Warsh Fed Nomination Advances.
After 16 years in power, Viktor Orban was voted out in a landslide in Hungary. But the ideological read is more complicated than it looks. Kevin Warsh, the president's nominee to lead the Federal Reserve, disclosed a sprawling set of financial interests worth more than $100 million. Warsh appears to have signed disclosures back in February. Kevin Warsh financial interests: $100 million. He says the Fed is right to wait and see how the economy handles the Iran shock but expects it will not seep into inflation expectations, allowing cuts to eventually resume. He put it more colorfully: If ever there was 'Team Transitory,' it's this.
Here is where the labor market stands for your paycheck.
Continuing claims: 1,794,000, down 2.07% on the week
Job openings (JOLTS): 6,882.00, down 4.94% on the month
Quits rate: 1.90, down 5.00% on the month
Unemployment rate: 4.30, down 2.27% on the month