Stocks extended Thursday’s rally and added to Wednesday’s explosive gains on continued optimism that the fragile two-week ceasefire agreement between the United States and Iran will hold. But many on Wall Street are warning that the two-day relief rally could falter. Ed Yardeni, a longtime market watcher who started working on Wall Street in the 1970s, told clients in a note Thursday that the war-induced stock price low has arrived, but that doesn’t mean the future recovery will be linear. “At the beginning of this year, we did not expect a war, but we did expect the stock market to be volatile in the first half of the year,” said Yardeni Research’s president. “The waves will remain unstable until ships can navigate freely in the Strait of Hormuz,” he said. The turmoil was most evident on Thursday, when West Texas Intermediate crude oil briefly topped $100 a barrel, causing stocks to initially fall, but by midday they had erased their losses and climbed higher. All major market averages soared on Wednesday after the United States and Iran agreed to a two-week cease-fire, with the Dow Jones Industrial Average rising nearly 3% for its best day since April 2025. .DJI Mountain 2026-04-07 Dow Jones Industrial Average since ceasefire “Just as we have sought not to overreact during sharp market downdrafts, we intend to do the same on strong up days,” Keith Lerner, chief investment officer at Twist Wealth, said in a note Wednesday. “While we continue to see upside, the path to greater heights is likely to remain choppy given that this is a truce rather than a full deal.” Lerner still expects market direction to be driven by headlines and volatility to rise. Craig Johnson, chief market engineer at Piper Sandler, shares a similar view. Despite Wednesday’s rally, the market has not yet received a clear signal to move higher. In fact, Prime Minister Boris Johnson on Thursday advised investors to weaken the bull market. “Medium-term breadth and trends remain defensive and recovery will require additional time,” he said. “Please wait for technical confirmation and follow-through before adding positions.” .SPX Mountain 2026-02-27 S&P500 since the start of the war.
