Closing Bell - Closing Bell Overtime: Dow Has Best Day In a Year As Stocks Rally Following Temporary Ceasefire 4/8/26

Episode Date: April 8, 2026

Cantor Fitzgerald’s Eric Johnston and Capital Area Planning Group’s Malcolm Ethridge debate a key question: how real is this rally and can it hold. Jonathan Krinsky of BTIG walks through the technical picture and what the charts say about the rally. Our Kristina Partsinevelos examines rising competition out of China and whether it poses a real threat to Nvidia and the broader semiconductor trade. Sarah Bianchi of Evercore on historical parallels to the Iran ceasefire and lessons for investors. Eric Rosengren, former Boston Fed President, breaks down how the Fed should respond as the economy, inflation and geopolitical risks collide. Plus, a check on private credit downgrades and bank earnings with our Leslie Picker. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Go human X. The bell is bringing an end to the trading day at the NYC, Human X ringing the bell, and at the NASDAQ. Daktronics doing the honors. Welcome to the closing bell overtime, live from Studio B at the NASDAQ market site. I'm Mike Santoli. Melissa Lee is off today. A big rally on Wall Street as the U.S. and Iran agreed to a two-week ceasefire.

The Dow up 1,300 points, having its best day in nearly a year, the S&P 500, and NASDAQ extending their winning streaks to 6. days, the S&P up 2.5%. But this only brings us back to the same index levels from early March shortly after the war began. Over the next hour, we'll be talking to market watchers, technicians, and political strategists asking the questions you want to know. Can you trust this rally? And can you trust this ceasefire? But we begin with the numbers. Sima Modi is looking at some of the big movers on the day. Hello, Sima. Hey, Mike, a nearly 3% gain for the NASDAQ today. Tech stocks really witnessing a sharp reversal details of the U.S. Iran's ceasefire.

are merging and investors responding with hyperscalers like meta, alphabet, all gaining on the day. Memory names like Micron up nearly 8%. And with today's gains, Intel now higher by 32% just in the month of April following news of its partnership with Elon Musk's tariffab. Industrials with energy exposure also joined the market rally today. This as investors, count down to earnings from Caterpillar Cummins and Boeing unofficially earning season getting kicked off next week. The plunge, though, in oil prices, sending airlines and cruise lines higher. We saw Carnival the best performing stock on the S&P 500 today up over 11%. William Blair analysts believe its best position than its competitors on hedging oil.

There was also Delta out with earnings of $1 billion pre-tax profit this quarter higher than what analysts had expected shares up about 4% on the day. United higher by 8%. Cyber security stocks, one pocket of strength within software. Crowdstrike, Paula Alto, networks gain. after Anthropic revealed it is previewing its latest AI model mythos with leaders in security. So that calms, some concerns, crowd strike, ending the day high up just fractioning on the day. The losses highly concentrated in energy as is suspected, given the drop we saw in oil, Marathon, Petroleum, Exxon and Valero, all lower on the day.

Mike? Seema, thank you. Well, oil plummeting on Hope's passage through the Strait of Hormuz will be normalized. Pippa Stevens watching all that for us. Hi, Pippa. Hey, Mike, a little bit more hope than reality at this. this point with just three vessels transiting the straight of Hormuz today. That's according to Lloyd's list. That is fewer ships than we're transiting prior to the ceasefire. There are currently 304 vessels

in the Persian Gulf with about 172 million barrels of oil and products at full operational capacity. It would take 13 days to clear the backlog, notes Kepler, but at a reduced rate of 25%, which is still well above where current transit sit, it would take 51 days to clear. Now, I did speak to a shipping executive today who has ships stuck in the Persian Gulf and who told me that they have no information about how they could currently transit and they are not in touch with Iranian authorities. Still, WTI seeing its biggest drop in six years with Brent shedding 13% to settle at 94-75. Now, dated Brent, which is a better indicator of current prices, falling to $124 and $68 per barrel today. That's according to Platt, but still a roughly $30 premium to the front month.

Yeah, Pip, I guess that's your best real-time gauge of physical scarcity when it comes to crew. I mean, what would that spread normally be? Would it be right in tune with, let's say, Front Month Brent normally? It can normally be a little bit different, say, $3 to $5, but it usually converges when the contract rolls. But I think that the futures market is not quite accurately pricing what is happening on the ground and those physical shortages, especially since those final cargoes have just been delivered. it is really now crunch time in terms of refineries being able to get those barrels. And then there's also questions about whether this ceasefire then kind of, you know,

kicks the can down the road in the sense that if refiners then think that maybe they can get a cheaper price in a few weeks time, maybe they won't buy right now, and then they won't have any oil to refine into products, further tightening those already tight products. And so in some ways, this kind of lack of clarity, you know, this two-week ceasefire that hasn't really seen the meaningful uptick in ship transits could actually exacerbate the situation further. And then finally, I would note that we're so focused on chips that are exiting the Persian Gulf, but equally important is ships that are entering. Because in order to get oil fields restarted,

in order to get any LNG out of Rass Lafan, you need ships that are empty to offload onto. And so without that portion, we're not going to see a normalization of flows anytime soon. Yeah, I mean, as you say, it could be weeks and weeks before we have any sense of that. Pippa, thank you. Well, stock storing, oil tumbling, but bond yields pretty flat today. Rick Santelli tracking the action from the CMA. Hi, Rick.

Yeah, absolutely flat. But if you just look at a 24-hour chart, Mike, look at it. It certainly looks like it was just a big up day in yield. Now, when you pair it with yesterday, you really get a much better sense of what's going on. We did hit an intraday low of 422 in tens, but we came back up. Maybe the most important issue here is prior to the conflict, The high close of the year was January 20th. Well, you see it on the left side of this chart.

That was 4.30%. That's why it's been so significant. And we closed below it by just a little bit yesterday, but that's the area you want to pay attention to. Because unlike crude oil, which is down and hasn't bounced, and in my opinion, unlike PIPA's, I think it's sending a message. But the Treasury market is reversing, not paying as close of attention. Why?

Deficits, quality. the war, defense budget, there's a lot going on. And it was a dismal 10-year auction. Tomorrow will complete the trifecta with 30-year bonds. And finally, here's a nugget. Ten-year minus boond yields. So that spread closed yesterday at the narrowest it's been in three years. And that's because boond yields has been coming up to catch U.S. yields. Back to you. Interesting. Yeah. So that's obviously on some level supportive of yields here. Rick, obviously, very stale set of Fed minutes we got a little while ago, just given what's happened in the world. And yet the market is going to try to, you know, try to steer its way toward what the Fed might do if, in fact, we start to get toward some resolution here.

I look at it differently. I think the Fed steers toward the market. Yeah, well, that's true, too. But, I mean, but the market and the Fed theoretically are going to be looking at some of the same sets of data. So right now, what is the two-year yield telling the Fed? You know, I think the two-year yield is telling the Fed that yields are going to be sticky, and it isn't necessarily new inflation. It's the inflation we don't know about due to the conflict,

adding into inflation we did know about that sticky last mile, and it still hasn't gone away. Yeah, well, we'll get plenty more detail on that next two days. Rick, thank you very much. Now, let's get the latest coming out of the White House today, Amin Javers, covering that for us. standing. Mike, that's right. We've been hearing from the vice president, J.D. Vance, just in the past couple of moments. That's important because Vance is going to be leading the White House, says,

the negotiations in Pakistan this weekend face to face with the Iranians. So we'll see whether they can pin down some terms that will give some heft to this ceasefire that we've seen over the past just about 24 hours now. But Vance making these comments over the past couple of minutes and suggesting that the Iranian side may not have known what it was agreeing to yesterday or there may have been some misunderstanding of exactly what the terms were. Here's what he said. I think this comes from a legitimate misunderstanding. I think the Iranians thought that the ceasefire included Lebanon,

and it just didn't. We never made that promise. We never indicated that was going to be the case. What we said is that the ceasefire would be focused on Iran and the ceasefire would be focused on America's allies, both Israel and the Gulf Arab states. C.C. Vance there is saying that he believes that the Iranians thought that Lebanon would be included in this deal, but it wasn't, at least from the White House's perspective, ever included.

He also said there were at least three versions of the 10 points that were being circulated. One, he said that the U.S. concluded had been written by Chatsh, GPT. So clearly a lot of room potentially for misunderstanding and error in these negotiations. They'll be face to face over the weekend, so maybe they can hammer some of that out. We'll see whether it's material to being able to continue with the ceasefire. Meanwhile, the big question for the oil markets is the Strait of Hormuz. We heard from the White House Press Secretary Caroline Levitt a short time ago here at the White House. I asked her whether or not it was acceptable to the United States to have the Iranians be able to effectively charge a toll for oil ships to pass through the strait.

Here's what she said. I think the president was very clear and simplistic in his language last night in his true social post. where he said that this ceasefire is subject to of the free, safe, and immediate reopening of the Strait of Ramos. That's very plain language, and it should be taken at face value. Carrie, go ahead.

Without limitation, including tolls, yes. So you hear her there saying, without limitations, that is, the White House does not want the Iranians to be able to charge tolls for ships to pass through the strait. We'll see again, Mike, whether that ends up being part of this in negotiation or not? Is that a red line for the White House? We don't know at this point. One of the thing to

flag for you here real quick is Mark Ruta, the head of NATO, is here on campus at the White House right now. He's a meeting with the president behind closed doors. And Caroline Levitt said that it's at least possible that they discuss the United States leaving NATO during this conversation. So that would be a sort of geopolitically world-shaking thing. We'll watch for that. Unclear whether that's actually on the table just, you know, one of the many possibilities here. But the president has been, you know, venting frustration with NATO for a number of weeks now. And now he is sitting head to head with the Secretary General of NATO behind closed doors here at the White House, Mike. Yeah.

Who knows if that's the, you know, the friction point we roll to next, Amy. But, you know, on the matter of the ceasefire, various interpretations of it, it feels as if, and, of course, the market doesn't get final say of what's going on. But it feels like people are taking to heart. expressed willingness of all sides to engage in something that they're calling the terms of a ceasefire and that they will do actual negotiations over this two-week period. In other words, yeah, we can hash it all out, but we're not going to jump to the conclusion that it's been broken because one side says it's been broken. Yeah, and I think if you're a market participant, you've got to kind of reduce this to a binary, right? Which way is the arrow pointing? Is it pointing toward de-escalation

or is it pointing toward escalation? Right now, it's pointing toward de-escalation, right? The fact that people are exchanging 10-point plans, the fact that there are meetings happening face-to-face, the fact that all this dialogue and rhetoric is out there, as difficult and tough and confusing and some of it can be to follow, does indicate that we're in a process of negotiation, and that seems to be de-escalatory. But there's really no guarantee here that this is a successful effort, and we end up moving away from the combat phase of this completely. So, you know, the United States reserves the right to relaunch the war at any time. And so do the Iranians, clearly.

So, you know, we'll see. A lot's going to hang on these meetings that J.D. Vance is leading over the weekend. Right. Good enough for one day. Who knows how much beyond that. Amon, thank you. The ceasefire may have driven today's rally, but does it create a solid foundation for the bull market to resume? Joining me now are Eric Johnson from Canter Fitzgerald and Malcolm Etheridge from Capital Area Planning Group.

Guys, welcome, Eric. I know you've been, I think, looking at this general corrective phase as a chance. chance to perhaps reload and assume that we're going to blast out of this pretty well. Where do you see it right now? So I think what we saw, you know, overnight was certainly a positive sign. You know, there's certainly the intent from the U.S. side to get a deal and to, you know, put this behind us. I do think from a short-term perspective that there are still risks that are still there.

You have a lot of players involved. And, you know, so far, the whore moves is not. So there are still risks. And so I think for the coming couple weeks, we'll see how this plays out. But I think, yes, broadly, we think this is a buying opportunity. We've thought that we think the economy is in very good shape. We think earnings have a lot of secular tailwinds to them.

We've seen a 14% correction in the multiple, so much larger than we've seen in price. And we hit the RSI trigger that we were looking for, we were looking for, and the returns over the next six to 12 months when that happens have been very strong. It's happened 29 times since 2009, 28 of 29, you were up one year later, and 27 of 29, you were up six months later. So we think the backdrop broadly is good. Yeah, just to be clear, that's a low in the relative strengthening that indicates an oversold market and usually improves the odds looking forward. Malcolm, from your perspective, what did this,

corrective phase accomplish, whether it is in mitigating valuations or creating opportunities in individual groups or maybe just highlighting risks where we didn't see them before? Yeah, I think if nothing else, it's shown us where the strength really is, where the buying power is really going to come from when we do finally get the all clear, right? I think we're all in agreement here that we don't know whether this ceasefire is the one or the next ceasefire will be the one. But no one wants to be on the wrong side of that trade. We learned our last year with Liberation Day, where with one tweet, basically, all of the tariffs were removed all at once seemingly. And the NASDAQ alone shot up about 10% in one day. So everyone is trying

to position themselves to properly be on the right side of that trade when it comes. And I think it looks like that's going to be in tech more than anywhere else, simply because we're looking at the semis leading today, which is great because we really need them going into earnings. But the tech sector more broadly, if you think about valuations, it's become one of the cheapest places to invest right now where valuations were back in October at the highs about 34 times forward earnings and now we sit at about 20, which is basically where the rest of the S&P is, including tech. So I think it's just the setup is tech is what's going to lead us here. Guys, one second. Just stay right there. We are looking at Innovator, a Goldman Sachs company,

ringing the closing bell at Sibo in Chicago. That ends the regular trading day for options. Eric, I think there's this open question out there as we try to work our way through and put the, I guess, the most heated moments of the conflict behind us. Maybe oil can calm down. This question of whether the market has already made its peace with some of the preexisting issues, like the meltdown in software. Software ETF is down 1% today. The potential cracks in private credit.

Do you think we've rationalized a lot of those things, or do they wait for us out there? I think they lurk out there. I think that they'll be, they'll be certainly back. I think software, you know, is going to be front and center as, you know, the evolution around AI, you know, continues. But I think that some of them are, we're going to work through. So, for example, private credit, you've seen financials act better. I think ultimately there will be losses there, but not systemic. And I think, and manageable based on, based on the size. I think around AI cap-x, I think some of those answers, you know, are starting to emerge. We saw the anthropic numbers yesterday. Probably didn't get as much press as it would have normally because of what's going on with the war. But I think these are all things that can be worked through. And so that's why, one of the reasons why I think the outlook, you know, is quite favorable once we get through this sort of near-term issue with Iran. Malcolm, you know, it's easy to, you know, take comfort for sure in the fact that consensus

earnings estimates continue to rise through this entire period. It definitely is making valuations look more reasonable or manageable. I do wonder, though, whether in fact those estimates have yet taken account for what may or may not happen in the real economy in response to whether it's higher oil prices or a little bit of the wear and tear on consumer confidence. Yeah, so I think it's telling today that we got Delta coming out, the CEO of Delta coming out and kind of warning us that guidance might not look so great for the rest of the year. They had about a $2 billion increase in fuel costs so far that they're expecting is going to have a meaningful impact on their earnings. And I think we're probably going to get more and more

of those kinds of downward guidance expectation rollouts either during the earnings period or ahead of it. And I think that we have to take into account that that is going to play a meaningful part in how the earning season actually rolls out. But I also think that I mentioned semis earlier today. And the reason that's so important is because it's really the semis that are expected to be the bulk of the earnings throughout 2026 anyway. Like earnings growth is expected to be about 43% in the tech sector, which is primarily semis. And for everything else, including tech, it's like 19%, I think. And so we really need the tech sector specifically but the hyper-scalers, while they're still spending tens and billions of dollars in CapEx building out AI,

it's really the semis. And so we are going to have a mixed earnings picture, I think, is really what we should set our expectations to. Yeah, I guess it's all about how the stocks are performed leading up to it. We had great earnings the last two quarters, and the market couldn't do much with it in the moment. We'll see how it goes. Malcolm, Eric, thank you very much for starting up the hour for us. Constellation Brand's earnings are out. Brandon Gomez has the numbers. Hey, Brandon.

Hey, Mike. Yeah, Constellation shares are. lower despite an earnings beat on the top and bottom line. EPS and revenue came in better than expected. Perhaps investors looking closer at the fiscal year guidance. 2027 EPS guidance below 1120 to 1190 a share versus 1236 expected flat organic revenue growth expected for the year as well. The company did withdraw its 2028 outlook perhaps because the company will have a new CEO starting April 13th, Nicholas Fink. He does have a background in the spirit side of the business. We'll see how he deals in the beer-driven business that is consolation brands.

The earnings call is tomorrow morning, not tonight, but tomorrow morning we'll be sure to listen in and bring any headlines. But right now, shares down about a percent and a half. All right, Brandon, thank you. Well, coming up, we'll continue to ask whether this rally can last. Our next guest is looking for answers in the chart as the S&P 500 gets back to some key levels. We'll get a technical take on what comes next for stocks. You're watching closing bell overtime, live from the NASDAQ market side. Today's rally bringing back hints of the risk-on mentality to the market.

Memory, one place where we're seeing that, Sandusk among the top gainers in the S&P 500. Also, gains of around 10% for the networking players, including Lumentum and Coherent. You see those up almost 10 to 12% on the day. Stocks are rallying today and pushing back towards some key levels. The question now, whether this bounce has room to run or if the market is about to run into a technical ceiling. Arneseka says today's action is. presenting mixed messages and the next few sessions should determine where the market goes from here. With me now is Jonathan Khrinsky, BTIG, chief market technician.

So Jonathan, I mean, all we can kind of do in these instances is look at historical precedent, look at how the market is done after behaving in a similar fashion. I know you feel like it's a split decision, but set out for us the scenarios. Hey, Mike, so, you know, a pretty unusual situation today with a big gap up. We call it a true gap because we look at the spread between the intraday low today and the intraday high of yesterday. And if we go back over 20 years of data, when you have a 1.5% or greater gap up on the SPY, the SP500 ETF, that has tended to be an extremely bullish occurrence. That's happened five times, five of five times you were higher looking out two, four, eight or 12 weeks later. median returns looking out four weeks later are I think like 6% and 9% looking out eight weeks later.

So it's just a very bullish event when you get that massive gap up. Now, on the other hand, what's notable is that when you've had a setup where the S&P was below the 250 and 50 day on the day prior and then gaps up to open above both the 50 and 200 like we did also today, that's happened three other times and those were extremely bearish. scenarios in December of 07, December of 2015, and December of 2018 also pretty meaningful downside over the next couple months. And so I think, you know, while those give kind of a binary outcome, I think what's important is in each of those scenarios, it was the action of the ensuing days that really told the story. Each of the three gap up, so we mentioned that were bearish. Really, the S&B didn't exceed the high of the gap up by much at all. So pretty much, you know, kind of chopped around and went immediately lower in the sessions following.

Conversely, those gap ups did not really pull back much. They actually showed strength in the days ahead. And you really didn't, with the exception of one event off the 09 bottom, really didn't give you a chance to get back in at lower prices. So I think we really want to watch these next couple sessions as we close the week for signs of kind of which way that may lead us. Yeah, it's really interesting. It's how rare it is for the market in a given date of vault,

those moving averages. I think a lot of this stuff has to do with, I don't know, how compressed the market had been and gone sideways for so long. So everything was kind of bunched together, like all these trend lines and whatever. So that's just, I guess, one factor in all this. The other piece of it, and I mean, I know your work showed this, a lot of folks were saying when we were at the lows, it didn't necessarily seem like it was a complete washout situation. You had this comprehensive liquidations, mega-oversold, that should really snap back into a powerful rebound right away. So where does that leave us now that we've rallied like 7% off the intraday lows? Yeah, I mean, I think that's one thing to maybe, even if we do go with the

bullish scenario, I think we maybe have to temper our enthusiasm because typically when you get those signals, they've come after you've kind of got everything washed out. One of the things we look at is, you know, what percentage of S&P 500 stocks are above their 200-day moving average? Typically, at good durable lows, you get a reading below below 25%. We only got to about 42% this time around. So you never got that fully washed out reading, which

maybe suggests that even if we move higher, you're not going to kind of get that explosive move that you often get. And the last point we'd highlight, you know, we've been saying that the things that were kind of struggling leading into the Middle East escalation were probably not going to recover just because we had de-escalation.

And I think case and point today was the fact, and you highlighted earlier, as well, that software, IGV was down, the ETF was down 1% today. I think there was something like 30 names in IGV were down more than 3% today on a day when the S&P was up over 2%. So, you know, software continues to be an issue and the private credit names also were red. So, you know, I think there's still going to be issues moving forward even if the overall market can move higher. Yeah, I guess it's a question of, you know, kind of what return to normal we're hoping for here or what we might get. Jonathan,

Great to talk to you. Thanks a lot. Jonathan Krynnski from BTIG with some timely tactical analysis. Chip stocks jumping today, the SMH ETF higher by 5%. But is there a new threat looming for Nvidia and the rest? Overtime. We'll be right back. Welcome back. While most stocks participated in today's rally, a small group that benefited during the last month seeing a big pullback today, energy names getting crushed. So we're the fertilizer and chemical stocks, CF industries, down 5%. And the same thing for Dow chemical as well. Well, a big day for chip stocks as part of this broader market rally, but are investors overlooking a greater threat? Christina Parks and Nevelas joining us here with more. And that is, that greater threat is exactly the scenario that Invidia has been warning about.

CEO of Jensen Wong spent months lobbying Washington to ease export controls, arguing if the U.S. doesn't sell chips to China, someone else will. Well, today we're seeing who or what that someone else looks like. Alibaba launched data centers or a data center in southern China, powered by roughly 10,000 of its own AI chips. The stock you can see closing almost 5% higher. Chinese AI startup, another company. Deep Seek is about to release its next model running entirely on Huawei's AI chips, not Nvidia.

And Alibaba, Bite Dance, Tencent, have placed bulk orders for hundreds of thousands of Huawei chips ahead of that launch. InVIA's own and CFO told investors that Chinese competitors bolstered by recent IPOs have the potential, quote, to disrupt the structure of the global AI industry. And now Huawei is trying to push those chips beyond China's borders.

Malaysia, for example, recently announced it would be the first country outside of China to deploy them within their sovereign AI program. So whether you side with NVIDIA or not on the whole export debate, should they be getting their most advanced chips in China, et cetera, the reality on the ground is moving fast. China's definitely building an AI stack that doesn't need American chips, and it's starting to export them. So that is the big threat to the American chips, not just NVIDIA.

Yeah, sure, that's the shift. It feels like so many mixed signals here in one sense, which is you've reported quite a bit on kind of the gray market or smuggling of Nvidia chips into China. So clearly there's a sense out there that if they could get them, they could use them and they want to. On the other hand, Nvidia wants to have maybe this global standard based on their own units and maybe that's now jeopardized. So it's interesting that we kind of don't know what we want necessarily, either whether we're China or the U.S. I guess from an video standpoint, they want the largest market share, they want global dominance, and they want the most money. And so that means opening up the doors to markets like China. But to your point about Super Micro, for example, right, the smuggling case, that is a huge, you know, strength for the camp or politicians that feel like we shouldn't be exporting it.

Because look, it's getting into the hands of universities, into the military, and they could use those chips for nefarious acts. And so the debate will continue. I think it's becoming more of a populist subject, especially as we head into midterms, as to, you know, should we be pro-tech or not? And in this case, you can see that China is definitely stepping up their game. They have for quite some time. And these AI models are definitely not that far behind. Yeah, I was going to say, that's the piece of it.

It seems like maybe there's not a lot of sacrifice by them trying to do it themselves at this point. Especially when they have a government throwing all kinds of money. Right. You know, power is not a constraint over there. Making it a priority. That's true. Christina, thank you. Thank you.

All right. Time for a CNBC News Update with Angelica People. Angelica. Hey, Mike, Democratic Senator Chuck Schumer will try again next week to pass a war powers resolution on Iran. The Senate Minority Leader says Congress must reassert its authority at this dangerous moment. Democrats in the House and Senate have tried but repeatedly failed to pass a resolution, forcing the President to get congressional authorization before launching further military operations. Last month was the most abnormally hot march on record. That's according to federal weather data, which shows a nine-degree,

increase over the 20th century average temp for the last month. Meteorologists predict it may be even warmer over the next year as forecasts are predicting an El Niño weather pattern that will reach super strength. And Audible is opening its first physical location, a pop-up bookless bookstore in New York City during the month of May. Audible, which is owned by Amazon, says the aim is to give people a physical way to discover content and connect with other listeners. Last month, Audible launched a cheaper monthly plan to directly compete with Spotify's audiobook expansion. Mike, back over to you. All right, Angelica, thank you. Sox jumping today on the ceasefire deal, but already Iran is saying the U.S. has violated the agreement. So will this deal really last two weeks and beyond? That's next

on overtime. Welcome back to closing bell overtime live from the NASDAQ market site. A big rally on Wall Street today. The Dow gaining more than 1,300 points. That was its best day since, last May, the S&P 500 and NASDAQ also up more than two and a half percent each. Those indexes have been higher for six days in a row now. Oil falling 15 percent back under $100 a barrel, energy, the only S&P sector to close lower on the day. All the others gained at least 1 percent. Well, stocks breathing a sigh of relief and oil tumbling as President Trump agreed to

suspend attacks on Iran for two weeks, that relies on Iran agreeing to the complete and immediate safe opening of the Strait of Hormuz. But Iran already saying the U.S. has violated the ceasefire agreement. So can this fragile deal hold? Joining us now is Evercourt Public Policy Chief Chief Strategist Sarah Bianchi. Sarah, it's great to have you. Obviously, a lot of perhaps conflicting messages flying around here. What's your best guess on how this proceeds from here? Yeah, well, I think it is important that there is a ceasefire, or at least a tentative ceasefire. And I think that, you know, is progress. Whether or not that's going to lead into a real resolution or agreement on Friday and beyond,

I think is very, very much up in the air at best. I think a lot of the things that are on Iran's list are going to be very hard for not only the United States to swallow, but a whole range of other actors in the region, and not to mention throughout the world. So I think it may well be that we have a ceasefire that comes without an agreement, and this may look more like just an effort to stop the missiles going for a while.

I know you've kind of drawn the comparison with last year and the U.S. and China attempting to come to some kind of a trade deal after, you know, you had sort of the most sort of bellicose tariff plans in the U.S. retreat from there. And we never really did come to any kind of across the board agreement, but it became kind of a standoff. How would that apply here? Well, our point was is that Trump was very, very tough on China until they started to exert their own leverage. And they did that by making around critical minerals. where the United States simply at this point doesn't have the ability to do a lot of industrial

processing and building without that. And once that kind of threat came, we saw a lot of walkbacks. And now we're talking about a summit that is much more about keeping a fragile detente than it is about escalating tariffs. I think the similar thing that Iran regime has tried to do here is to show its leverage, again, that it has a leverage, a, quote, nuclear option by closing the straight and they're willing to use it. And so that has sent the United States a bit backpedaling. They may find it harder here to find the detente than they did with China, but that's what we're watching. Yeah, obviously, you know, the closure of the strait is clearly a global problem. It's one that compounds. It gets energy prices and chemical prices to unsusely.

sustainable levels and shortages. In other words, there's real world imperatives that would drive some kind of a loosening of that situation. Now, if it were Iran accepting tolls and you had the president say maybe the U.S. can participate in that. I mean, that probably isn't going to sit well with U.S. Gulf allies if, in fact, we're in business with Iran there. There's a lot of players who are implicated here. There's a lot of, you know, talk about how the Chinese have gotten involved here because of their economic concerns and leaned a bit on the Iranian regime to, you know, agree to some kind of a pause. So there's a lot of different players with a lot of different stakes, which I think, unfortunately, through the president, you know, he's used to being able to a little bit unilaterally retreat on things like tariff or Greenland and it's a bit easier. but there's going to be really, certainly real concerns about any kind of, you know,

relief that agreement that, you know, has tolls collected for this regime, which would in many cases violate most sanctions agreements. So there's a lot of challenges to get to the finish line. But it may be that the president's happy to have two weeks and then two weeks of that. this is a better place from his perspective, perhaps, than he was yesterday. Yeah, for sure. And just even the expression of willingness to try is new in the last 24 hours. Sarah, thank you very much. Appreciate the time. Sarah, Bion. Thanks for having me. All right. Well, oil prices plunging today, but they are still up more than 40% since the war in Iran started at the beginning of March.

Up next, former Boston Fed President Eric Rosengren on how higher energy prices could impact the Fed's rate strategy. Over time, we'll be right back. Welcome back to overtime. West Texas oil, seeing its steepest one day decline since the depths of COVID in 2020, but that's still about $30 per barrel higher than before the Iran war began. So what are the ripple effects of this shock going to be on the economy and the consumer? Joining me now is Eric Rosengren, former Boston Fed president and currently a visiting scholar at the MIT Gallup Center for Finance and Policy. And Erica, it's great to see you. I guess maybe a six-week shock disruption. maybe a stagflationary impulse is not enough to draw conclusions from. But how do you think as a Fed policymaker we should be approaching this?

Well, I think the first thing is whether Sarah's right and that it's going to be difficult to get an agreement. So right now we've had six weeks of disruption. We still don't have the straight open up for the kind of traffic that we were seeing before the war. So until that actually happens, we're going to continue to have somewhat of a supply shock. And even when things do get normalized at some point, you have to make up for the energy infrastructure that was destroyed in the Middle East between the Gulf states and Iran. So I think the supply shock is likely to be fairly persistent. And it's not just oil. It affects other products as well that are oil-based.

We can see things like transportation. Anyone buying a plane ticket to California right now knows it's quite expensive. So I think we're going to be seeing in the next series of CPIs and PCE inflation numbers that the core numbers are staying at 3% or higher. That's a difficult place for the FMC to be. And I think it's going to be difficult for the committee to lower rates until they are more certain. that core inflation is going to be drifting down. And I don't think that'll be until the fall.

Now, even before the conflict, the Fed was basically not at its target necessarily, or was some distance from absolute full employment and obviously some distance from 2% inflation. And therefore, it was in a bit of a wait-and-see mode already. And the markets didn't expect a rate move for at least a couple of months at that point. How does that change here? I mean, we also did get a relatively strong employment report. It's only one month, but it seems like it maybe lessened the downside risk to the economy from the Fed's perspective. I would agree with that.

I think that the downside risk to the economy and employment based on the last employment report is probably not as serious. I would highlight, though, that the shock has just recently happened, and it's going to take some time to see how it funnels through the economy. me, but the inflation impulse, I think, is pretty certain. And if you look back to the March meeting, there were seven members who didn't want to lower rates at all this year. There were seven members that only wanted to lower it one time. So already you had a committee that even before the length of the oil shock was known was already unsure whether they were going to be cutting at all this year or not. And at least seven members,

have been pretty hawkish in actually arguing that they don't see any interest in decreasing rates at all this year. So I think it's going to be difficult to see how you would get a scenario unless the economy weakened significantly from here and so far we're not seeing that data.

I guess history has something for everybody when it comes to how a central bank should digest an oil shock like this, right? I mean, in 08 and 11, the ECB raised rates, in part because oil was high. Arguably, the Fed even remained on hold for an extended period in 08 because oil prices were high and they didn't think they could cut below like 2% at the time. On the other hand, you have the 1970s, which is everybody's, you know, scarce scenario. So how do you think we should, as a framework, start thinking about oil when it comes to something that drags on growth versus pushes up inflation?

So the key here is inflationary expectations. And so the difference between the 70s and those other instances you cited was that people started expecting inflation to continue to go up. It got embedded in wages. It got embedded in the way firms did their pricing. And so that's why the Fed frequently talks about inflation expectations and whether they're well anchored. But the committee is now facing an inflation rate that has been significantly above their

target for five years. We now have a supply shock that is going to be of uncertain length. And so I think it makes it difficult for the Fed to ease unless they become more convinced that they're going to start seeing core inflation get down below 3%. And that's going to be very difficult in the current environment because even before the supply shock, it was at least by the core PCE inflation rate was already around 3%. Yeah, as we'll likely learn. tomorrow when that latest data is released on PCE inflation. Eric Rozegan, thank you very much. Thank you.

All right. Well, new private credit fears preventing Blue Owl from joining today's market rally. Details straight ahead. Closing Bell Overtime live from the NASDAQ market site. We'll be right back. Welcome back to Overtime. The Rough Ride for Blue Owl continuing after Moody's cut its outlook for the company's flagship private credit fund, Leslie Picker, here with the details. Hey, Leslie.

Hey, Mike. Yeah, Moody's changing its outlook on Blue Owl's flagship private credit fund. credit fund to negative from stable, the ratings agency attributed the change to Blue Owl Credit Income Corp, OCIC to, quote, significantly higher than peer redemption requests in the first quarter. Even though Blue Owl opted to only fulfill redemptions worth 5% of shares outstanding, compared with the 22% requested, Moody said they expect elevated redemptions to persist and inflows to slow further. So the report said that could strain the funds currently strong capital and liquidity positions, note this was not a downgrade yet as its medium-grade

rating on OCIC remained. This follows, though, Moody's decision earlier yesterday to revise its outlook on the broader non-traded business development companies, BDCs, to negative. So these are the semi-liquid private credit vehicles that have seen a large exit as, all these redemption headlines in recent weeks. Moody's moves can have implications, of course, for leverage, since these vehicles, borrow money to fund their loan portfolio and a change in outlook, and especially if there is an actual downgrade in the future, can make that funding more expensive or harder to access. Next week, of course, we get a fresh picture from those key funding sources, the big banks,

and one of the investors and analysts' top questions for executives at those banks will be around private credit, guys. Yeah, no doubt about that. Leslie, what's interesting here in part is Moody's is making these determinations. and downgrading these vehicles based on the liquidity considerations, right? Not really about the credit profile, the underlying loans? That's exactly right. That is exactly what I thought you were going to follow up and ask me about, Mike,

which is this idea that it is purely based on redemptions and what the liquidity, what the outflows, the future potential for additional outflows means for their ability to maintain a strong capital and liquidity position. It doesn't have anything to do with performance. It doesn't really have anything to do with credit quality. Yeah, and in a weird way, kind of supports what management of these companies have been saying that it is a liquidity mismatch situation. Leslie, thank you very much. Let's get you set up with tomorrow's trade today. There are no earnings on the calendar, but there is some key economic data. The February PCE price index is the real highlight, along with February personal income and consumer spending, the final reading of the fourth quarter GDP, as well, of course, as weekly jobless claims, which comes everywhere.

every Thursday. That's going to do it for fast money for C closing bell overtime. Fast money, in fact, begins right after this quick break.