The ceasefire expires tomorrow, oil prices fell 7.8% and then rose 4.5% in two days — what is the market betting on in real time?
Oil prices fell 7.78% in a single day on Friday and rebounded 4.55% on Monday. In just two days, the market has already voted twice, and in opposite directions.
This is not just market volatility; it's the market using prices to price in the probability of US-Iran negotiations in real-time—betting on a deal being reached on Friday, then switching to betting on talks breaking down on Monday. Tomorrow (April 22) the ceasefire expires, and the bets are back on the table.
Current two-day trend:
- April 17 (Friday): USO closed at $116.04, -7.78%, previous close $125.84, market pricing in a deal nearing completion
- April 20 (Monday): USO closed at $121.32, +4.55%, Iran announced refusal to participate in new round of talks, market reversed
Other asset closings on Monday:
- XOM: $147.68, +0.85%
- CVX: $183.25, -0.40%
- GLD (Gold ETF): $442.09, -0.86%
- LMT (Lockheed Martin): $581.28, -1.84%
- RTX: $195.79, -0.32%
- NOC (Northrop Grumman): $656.98, -1.25%
- Data source: hermes+ Longbridge skill, commands are below
longbridge quote USO.US XOM.US CVX.US GLD.US
longbridge quote LMT.US RTX.US NOC.US
longbridge kline USO.US --period day --count 10
Oil up, Gold down, Defense weak—What is this combination saying
These three directions appearing simultaneously is abnormal.
The normal logic for escalating war risk: oil, gold, and defense stocks all rise. But now only oil is rising, gold is slightly down, and defense is falling more.
This combination indicates the market's mainstream judgment is: The ceasefire will break, but it will not escalate into a full-scale war. The market is betting on the continuation of blockades and economic confrontation, not the resumption of military conflict. This explains why crude oil is rising on supply tightening expectations, but gold (a comprehensive safe-haven asset) and defense (a war beneficiary) are weakening instead.
Whether this judgment is correct, we'll have the answer tomorrow.
Why are the negotiations stuck here
None of the three core disagreements are easy to compromise on:
The Strait of Hormuz is a structural contradiction—about 20% of the world's oil passes through this waterway. Iran cannot truly let go, and the US cannot accept Iran retaining control. The 20-year vs. 5-year uranium enrichment timeline seems negotiable, but with the Hormuz issue stuck, everything else is secondary.
Tomorrow is a dual pressure point
April 22: Ceasefire expires + TSLA Q1 2026 earnings report, on the same day.
Volatility from both the energy and tech sectors will hit simultaneously. Specifically:
- If the ceasefire breaks and blockades escalate: Oil prices could climb another notch, USO has a chance to recover above $125; energy stocks XOM/CVX will follow, but gains will lag crude (already partially priced in)
- If a deal is unexpectedly reached: Sequel to the oil price crash, Friday's -7.78% wave could repeat or be even bigger
- If TSLA earnings disappoint: The tech sector will face pressure on the same day; the hedging effect between energy and tech positions depends on your allocation
With volatility hitting from both sides, figuring out your position sizing today is more important than watching the screen tomorrow.
$United States Oil Fund.US $Exxon Mobil.US $Lockheed Martin.US $Gold ETF.US
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