Trump is about to deliver a speech; US stocks have risen for two consecutive sessions for the first time, gold has gained four times in a row, and Wall Street is experiencing FOMO.
A speech that no one on Wall Street dared to miss.
On April 1 local time, according to Xinhua News Agency, the White House announced that President Trump will deliver a national address at 9 PM Eastern time (9 AM Beijing time on April 2), to provide an “important update” on Iran. White House press secretary Levitt said this on social media, but provided no further information.
The market expects him to reaffirm ending military operations in two to three weeks. Trump sent signals earlier yesterday. According to Xinhua, he said the US may end military operations against Iran in two to three weeks, “we’ll be pulling out soon,” and that the only goal was for Iran not to have nuclear weapons, “and that goal has already been achieved.” He added that even without a deal with Iran, the US could end the war.
This statement directly ignited the market’s FOMO (Fear of Missing Out) sentiment.
Overnight, US stocks rose for the second day in a row, with the Nasdaq recording its best two-day performance since May 2025. Gold has surged more than 6% this week, rising for the fourth consecutive day in early trading, as traders bet the Fed may turn to rate cuts due to economic pressure. Oil prices dropped again in early trading, falling back to around $100 per barrel.
But will this time be a new TACO? Amidst this frenzy at the beginning of April sparked by “hope for a ceasefire,” the divergence between real data and market sentiment is becoming extremely dangerous. US macro hard data continues to decline, but survey-based “soft data” has spiked due to “hope” from the war bottoming out. Faced with exaggerated verbal exchanges between Trump and Iran, increasingly clear-minded traders are questioning: Is this the dawn of peace, or just another 'head fake' by Trump to manipulate the market?
US stocks “two-day rally”: No one wants to miss out, but the market is still being played by news headlines
US stocks rose for the second consecutive day on April 1. The Nasdaq Composite rose 1.2%, marking its best two-day performance since May 2025; the S&P 500 rose 0.7%.
Boeing and Caterpillar's gains pushed the Dow Jones Industrial Average to a three-day rally. The memory stocks sector (GSTMTMEM, +8.2%) led the gains, marking its second best performance ever.
US stocks’ Mag 7 are poised for their best two-day performance in a year, though momentum then waned.
The driving force of this rally stems not only from optimism about fundamentals, but also from a collective “FOMO” mentality of not daring to miss out.
Piper Sandler derivatives trader Tom Keen said: “As soon as there's even a whiff of good news, or any sign of progress, everyone rushes to increase exposure to risk assets.”
“This is a ‘war is about to end’ trade,” said Rocky Fishman, founder of Asym 500.
This mindset is traceable. Last year, after Trump announced “Liberation Day” tariff suspensions, the Nasdaq soared over 10% in a single day, catching many hedge funds off guard. That scene is still vivid; nobody wants to miss out again.
Prediction market data also confirms this optimism. According to Polymarket, traders recently put the probability of a US-Iran ceasefire before June 30 at around 65%, up from about 52% in late March.
However, some analysis shows that this rally may be a technical squeeze rather than a fundamentally driven substantial build. Genuine trading data from Goldman Sachs Prime Brokerage (PB) shows: the net buying in overnight US equities (1.7 standard deviations above the yearly average) was overwhelmingly driven by short covering—the scale of short covering buys reached 4.7 times that of long sells.
Moreover, institutional funds are actually “frozen.” Goldman Sachs noted that overall trading activity was only 5 out of 10; both long only (LO) and hedge funds (HFs) stood on the sidelines, with net positions basically flat for the day.
Goldman Sachs analyst Chris Hussey also pointed out, today’s rally was largely due to short positions passively being squeezed, not genuine long builds.
At the open, driven by optimism over Trump's speech, indices quickly shot up to key technical resistance; but as more Middle East conflict headlines emerged, the morning squeeze rally failed to stabilize and gains quickly narrowed. All three major US indices could not hold their ground throughout the day, instead reversing on news cycles, three times staging “pump’n’dump” rallies followed by sell-offs.
Derivatives Market “Booster”: Every point higher elicits more buying
Behind this rebound, the structural force of the derivatives market is also not to be ignored.
Option market makers' hedging operations clearly amplified the rally on Tuesday. David Boole, managing director of BayCrest Options Brokerage, said that as stock prices rose, the value of some professional traders’ option positions changed rapidly, forcing them to buy stock index futures to hedge.
“Every point higher elicits more buying,” said Boole. “This looks more like a momentum, position, and technical-driven market, rather than one driven by long-term fundamentals.”
Goldman Sachs data shows, after quarter-end option expiries, the market makers’ gamma exposure changed from a net short of more than $7 billion to roughly flat, meaning the amplification effect of two-way volatility in the market may shrink.
Gold's “four-day rally”: Traders bet on Fed pivot
Meanwhile, gold has risen for four consecutive days, with this week’s cumulative gain exceeding 6%, the largest weekly gain in nearly 10 weeks.
Spot gold rose about 0.6% in early trading on April 2, quoting at $4,788.13 per ounce, briefly hitting above $4,790 during the session.
The logic behind gold’s rise is slightly different from that of stocks. OCBC strategist Christopher Wong said: “If geopolitical tensions ease, or worries about economic growth re-emerge, the market expectation for Fed rate cuts may make a comeback. In that scenario, real yields will fall and provide support for gold. In fact, recent price moves already hint at this dynamic.”
Simply put, the market logic is: War ends → Economic downside risk rises → Fed forced to cut rates → Gold benefits. Currently, expectations for Fed rate moves in 2026 have turned dovish, returning firmly into the “rate-cut” zone…
Notably, gold fell nearly 12% in March, marking its worst monthly performance since October 2008. At that time, high oil prices boosted inflation expectations, suppressed rate cut expectations, and gold’s safe haven attribute failed. Now, as ceasefire expectations heat up, this logic is reversing.
Additionally, the dollar fell for the second day in a row, providing extra support for gold. Bitcoin touched $69,000 twice during the session, but with US stocks falling at the close, Bitcoin gave back its early gains and ended flat.
Oil price: Whipsawed by “Trump’s mouth”, physical and futures markets split
Oil price trends are more complicated. In the past 24 hours, the energy market has been like a frightened bird, fluctuating wildly with “ceasefire statements” and "refutations" in headlines.
WTI crude fell 1.8% to $98.37 per barrel in early trading on April 2, after dropping 1.2% the previous day. Brent oil futures fell 2.7% to $101.16 per barrel. S&P 500 energy sector fell 3.9%, its worst one-day performance in a year of tariff turmoil; ExxonMobil shares dropped 5.2%.
But every drop in oil prices comes with a rebound. Based on data, throughout April 1, oil prices swung violently with news about Trump and Iran:
- 08:45 AM local time Trump posts on Truth Social that Iran has requested a ceasefire, oil price drops; then Trump threatens to bomb Iran back to the Stone Age if the strait isn’t reopened, oil price rebounds.
- 10:30 AM Iran's Foreign Ministry immediately denies, saying the claim is "false and groundless," oil price rebounds above $100;
- 1:00 PM White House officials reveal Trump's speech will reaffirm a two to three week timetable to end the war, oil price falls again;
- 1:45 PM Israeli broadcaster reports US-Iran talks not progressing well, oil price turns up, US stocks fall.
This “headline-driven” market reflects deep divisions. Goldman Sachs analysis says the biggest disagreement currently among clients is between macro clients and physical/professional clients—macro clients increasingly price in a ceasefire, physical clients believe current futures prices are still too low given actual supply interruptions.
Simply put: The futures market is trading on “war ending” expectations, while the physical market is trading on “oil not getting out” reality. Wall Street macro traders are betting ceasefire, but spot traders think current futures pricing is severely undervalued relative to actual supply disruptions.
International Energy Agency director Fatih Birol warned that with oil supply shocks deepening this month, some countries may soon face energy rationing. France and Australia have already seen gas stations run dry.
Gap between ceasefire expectations and reality: Will the market be fooled again?
Market optimism is not without concerns.
As a classic saying echoes in Wall Street traders’ minds: “Fool me once, shame on you... fool me... you can’t get fooled again.”(Fool me once, shame on you; fool me twice… no way.)
According to CCTV News, Trump recently hinted that US troops might withdraw without reopening the Strait of Hormuz. But media analysis says this scenario was previously thought nearly impossible. Before the war, the Strait of Hormuz handled about 20% of global oil and LNG shipping.
Iran’s parliament this week passed a plan to charge passing ships a transit fee, suggesting some supply may be restored, but also highlighting the risk that Iran may continue to control this channel.
UK Prime Minister Keir Starmer said Wednesday that officials from dozens of countries will meet this week to discuss restoring free energy flow. But he candidly said: “I must be honest: this won’t be easy.” He added that a ceasefire and reopening the strait “won’t necessarily go hand in hand.”
Will Todman, senior fellow for the Middle East at the Center for Strategic and International Studies, bluntly pointed out Iran’s calculus: “If the ceasefire opens the door to a new round of conflict, Iran is unlikely to agree. The regime thinks time is on its side—the longer the strait is closed, the more pain it inflicts on the global economy.”
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