Author: Shenchao TechFlow

U.S. Stocks: NASDAQ's 13-day record ends, Russell 2000 quietly hits new highs

On Monday's close, the S&P 500 fell 0.24% to 7,109.14, ending a five-day winning streak. The NASDAQ dropped 0.26% to 24,404.39, marking the end of its longest 13-day rally since 1992. The Dow was nearly flat, down just 4.87 points to 49,442.56.

However, the most interesting story wasn’t in the major indices, but in the small caps. The Russell 2000 rose 0.58% to 2,792.96, setting a new all-time closing high and also hitting a record intraday high.

What does this divergence indicate? Large tech stocks began to take a breath after two weeks of violent rebounds; Meta fell 2.6%, Tesla fell 2%, Alphabet dropped 1.2%, and Broadcom declined 1.7%. But funds didn’t leave the market; rather, they rotated into small caps, financials, and cyclical stocks. JPMorgan rose 2.2%, and Salesforce increased by 2.3%. This is a healthy signal: the market is rotating sectors at high levels instead of pulling back entirely.

David Wagner from Aptus Capital said something that might define the current market mindset: "For the market, the Iran war is already in the rearview mirror."

Scott Welch, Chief Investment Officer at Certuity, had a more nuanced view: "The S&P was not cheap before the war, and the recent rebound has only brought us back to the beginning of the year’s level. Investors will soon refocus on more fundamental issues: valuations, earnings outlook, inflation, the economy, the labor market, and Federal Reserve policy."

35 S&P 500 components reached new 52-week highs on Monday, showing that strength at the individual stock level still persists, even on down days.

Another key agenda item today: Warsh's Senate Banking Committee hearing. As Trump’s nominee for the next Fed Chairman, his statements on monetary policy will directly influence the market’s pricing on interest rate cuts/rises. (Note: the report was still ongoing at the time of publication.)

Oil Prices: Ship Seizure Incident Boosts by 6%, But $82 Benchmark Remains Far Below Wartime Highs

WTI rose about 6% in intraday trading on Monday, driven by the U.S. military seizure of an Iranian cargo ship and the closure of the Strait again.

After rebounding from $82.59 last Friday, it returned to around $88. However, comparing it shows that two weeks ago, oil prices were at $116. From $116 to $82, then bouncing back to $88, the war premium has been squeezed out by about 25%, even considering today's rebound.

The core contradiction hasn’t changed: the U.S. is blockading Iranian ports, while Iran controls the transit through the strait, and the dual blockade still exists. Last Friday’s collapse of oil prices by 9.4% occurred because the market was pricing in "peace is coming soon". Today’s 6% rebound is due to the ship seizure incident reminding the market that peace has not yet arrived.

Tomorrow the ceasefire expires. If not renewed, Trump says "the bombs will start flying". If the Iranian delegation truly goes to Islamabad for a second round of negotiations, the ceasefire will likely be extended in some form. Oil prices are currently seeking equilibrium between these two scenarios, and the $82-$95 range could be the new range for the coming weeks.

Gold: $4,813, the Last Safe Haven Before Ceasefire Expiry

The gold price is around $4,813, slightly down from last Friday's $4,879.

The ship seizure incident theoretically favors gold (increased geopolitical risk), but last Friday’s surge (+1.48% to around $4,880) has already partially priced in such risks. The gold price is currently trading within the $4,800-$4,880 range, awaiting the outcome of tomorrow's ceasefire expiry for direction.

The Warsh hearing is another focal point today. If he appears more dovish on monetary policy than Powell (the market generally expects him to be more open to rate cuts), gold could gain additional upward momentum. If his statements lean hawkish, the support at $4,800 will be tested.

Cryptocurrency: Stably Holding Amid Ceasefire Countdown

Bitcoin is around $76,000.

Under the triple pressure of the U.S. military seizing an Iranian cargo ship, the strait closing again, and the ceasefire expiring tomorrow, BTC's decline was less than 2%, showing resilience that the market has repeatedly validated. From the end of February's $85,000 drop to $65,000 and then rebounding to above $75,000, BTC has completed a full "war cycle" pricing.

The current core pricing logic of the market for crypto assets has shifted from "geopolitical panic" to "macro expectations". The assumption implied by BTC’s position above $74,000 is that the ceasefire will continue in some form, oil prices will not return above $100, inflation data will improve in the coming months, and the Fed will eventually cut rates.

If these assumptions are broken tomorrow, the ceasefire expiry + war reignition + surging oil prices could see BTC quickly retest $70,000 or even $67,000. But if Iran genuinely goes to Islamabad for talks on the second round, the market will interpret this as "the end of war is just a matter of time", and BTC could surge to $78,000-$80,000.

An interesting observation: the Russell 2000 set a historical high today, which is generally a signal of strong fundamentals in the U.S. economy. Small caps are much more sensitive to the domestic U.S. economy compared to large tech stocks, and a new high in the Russell implies that the market believes the U.S. economy can withstand the shocks from war and high oil prices. This signal is also positive for the crypto market, as it reduces the probability of the tail risk chain of "recession → liquidity crisis → crypto crash".

Today’s Summary: Last 24 Hours of Countdown

On April 21, the last complete trading day before the ceasefire expiry, the market is finding balance between the ship seizure incident and peace talks expectations:

U.S. Stocks: S&P slightly down 0.24% to 7,109. NASDAQ's 13-day winning streak ends. However, Russell 2000 sets a new historical high, with funds rotating instead of retreating.

Oil Prices: WTI rebounded 6% to around $88 from $82. Ship seizure incident + the strait closing again are driving this. The war premium has been squeezed out by 25%, but tomorrow's answer will determine everything.

Gold: $4,813. Staying cautious before the ceasefire expiry and Warsh hearing.

Cryptocurrency: The market has shifted from "geopolitical panic pricing" to "macro expectation pricing".

The question tomorrow is very simple: Is the ceasefire renewed or not?

If renewed: oil prices continue to fall, the S&P heads towards 7,200, and BTC targets 80,000.

If not renewed: Trump says "bombs start flying", oil prices return to above 100+, and the market gives back all last week's gains.

Aptus Capital says "the war is already in the rearview mirror", but sometimes what’s in the rearview can suddenly rush to your front.