The ceasefire is fraying from three directions at once, and the CPI just made everything worse. March headline CPI printed 3.3% y/y (+0.9% m/m), the hottest since May 2024, driven almost entirely by a 21.2% monthly gasoline spike. Energy accounted for three-quarters of the monthly increase. The print landed the same morning that Vance, Witkoff, and Kushner touched down in Islamabad for proximity talks with Iran, the most consequential diplomatic event since the war began. Markets couldn’t decide what to do: the Nasdaq eked out +0.27% on tech strength while the Dow fell 0.53% on rate-sensitive names repricing a June cut from 68% to ~40%. Meanwhile, the real story is off-screen: Iran officially admitted it mined the Strait of Hormuz, releasing an IRGC navigational map for ships to route around explosives. Seven vessels transited Thursday, still a trickle. Saudi Arabia revealed that drone strikes hit the East-West pipeline and multiple energy facilities, knocking out 700K bpd of capacity. Hezbollah broke its 24-hour silence and fired 30 rockets into northern Israel, hitting Safed and Nahariya. The ceasefire isn’t dead, but it’s bleeding from every wound.
Three things that matter this morning:
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CPI at 3.3% kills the June cut. Gasoline +21.2% m/m. The war is now in the inflation data. Fed funds futures repriced immediately: June probability dropped from 68% to ~40%. Warsh confirmation hearings haven’t even started. The Fed is stuck.
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Iran admitted it mined Hormuz. The IRGC released a formal navigational map routing ships around its own mines, the first official acknowledgment. This is not a strait that’s “reopening.” It’s a controlled chokepoint under permanent IRGC surveillance. Twelve ships per day maximum, $1M+ tolls, no oil tankers.
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Saudi Arabia’s East-West pipeline was hit. Drone strikes on the pipeline and multiple energy facilities knocked out 700K bpd of Saudi export capacity, roughly 10% of the kingdom’s output. The Red Sea reroute just got harder. Dated Brent spot remains above $120.
The War — Day 41 (Ceasefire Day 4)
Islamabad Talks — The Main Event
Vance, Witkoff, and Kushner arrived in Islamabad Friday morning for the first direct diplomatic engagement of the war. Iran’s delegation is led by Foreign Minister Araghchi and Parliament Speaker Ghalibaf. The format is proximity talks: both sides in the same hotel, different rooms, with Pakistani officials shuttling between them. They will not sit face to face.
Pakistan’s stated goal is modest: get both sides to agree to keep talking. The 10-point Iranian proposal covers nuclear program, regional security, sanctions relief (including pre-war secondary sanctions dating back 45 years), and Hormuz. The enrichment clause remains the time bomb: English and Persian texts still differ on Iran’s right to enrich to 20%. Vance warned Iran before departure not to “play us,” while Araghchi told Iranian state media the talks are “a test of American sincerity, not ours.”
Market implication: Any positive headline from Islamabad this weekend sends oil down $5–8 and equities up 1–2% Monday. A breakdown sends oil through $105 and reverses the ceasefire rally entirely.
Iran Admits to Mining Hormuz
Thursday’s most significant development: the IRGC Navy released a formal navigational map designating alternative shipping corridors through Hormuz to help vessels avoid anti-ship mines. This is the first official Iranian acknowledgment that mines are deployed, not merely threatened. Designated corridors route ships north of Larak Island on entry and south on exit, through a narrow band under direct IRGC surveillance. Iran announced a cap of 12 ships per day, each paying $1M+ in tolls. Zero oil tankers have transited since the ceasefire began. Seven total vessels crossed Thursday, down from 11 Wednesday.
What this means: The “reopening” language in the ceasefire text is meaningless. Iran has converted Hormuz from an international waterway into a toll road under military control. Even a successful Islamabad outcome won’t demilitarize the strait for months. Physical oil markets will remain severely tight.
Saudi Pipeline Attack
Iran-attributed drone strikes hit Saudi Arabia’s East-West pipeline (the 5-million bpd Petroline connecting the Eastern Province to the Red Sea port of Yanbu) along with production and refining facilities in Riyadh, the Eastern Province, and Yanbu Industrial City. The attacks knocked out approximately 700K bpd of Saudi export capacity, roughly 10% of current output. Damage was described as “contained” and the pipeline was not fully shut down, but the attacks demonstrate that even the Saudi Red Sea reroute (which bypasses Hormuz) is vulnerable. This is a new escalation vector.
Lebanon — Hezbollah Breaks Silence
After holding fire for 24 hours following Monday’s devastating Israeli strikes (250+ killed), Hezbollah launched approximately 30 rockets into northern Israel on Friday. Hits reported in Safed (parking lot), Nahariya (property damage), Kibbutz Misgav Am (direct hit on house), and Deir al-Asad (school). One IDF reservist severely wounded by a suicide drone in southern Lebanon. Israel responded with continued strikes across Lebanon but reportedly reduced military activity Thursday to align with the Islamabad diplomatic track.
Netanyahu’s offer to open direct negotiations with Lebanon has not been formally received by Beirut. Lebanese officials told CNN they were not officially notified. Hezbollah’s response was rockets, not words.
War Signal Tracker
| Signal | Status | Bias |
|---|---|---|
| Ceasefire in effect | Day 4, holding but deteriorating | BULL |
| Hormuz transit | Mined, 12/day cap, $1M tolls, 0 tankers | BEAR |
| Islamabad talks underway | Proximity format, modest goals | BULL |
| Lebanon escalation | Hezbollah rockets resume, 30 fired Friday | BEAR |
| Saudi pipeline attacked | 700K bpd knocked out | BEAR |
| Enrichment clause discrepancy | Unresolved, not yet public crisis | BEAR |
| CPI 3.3% — war in the data | June cut repriced from 68% to ~40% | BEAR |
| Pakistan mediation | Active, both delegations in Islamabad | BULL |
| Iran mine admission | IRGC map released, permanent chokepoint | BEAR |
| Netanyahu Lebanon talks offer | Not formally received by Beirut | NEUTRAL |
Assessment: 3 BULL / 6 BEAR / 1 NEUTRAL. Deteriorated from 4/4/2 yesterday. The mine admission, Saudi pipeline attack, and CPI print collectively shifted the balance. The ceasefire is still alive but the war’s economic consequences are accelerating faster than diplomacy. Ceasefire survival probability: 50% through the weekend. Islamabad is binary.
Market Snapshot
April 10 Close
| Index | Close | Change |
|---|---|---|
| S&P 500 | 6,816.78 | -0.12% |
| Nasdaq | 22,884.49 | +0.27% |
| Dow | 47,930.99 | -0.53% (-255 pts) |
Internals: Tech carried the Nasdaq while rate-sensitive sectors (utilities, REITs, financials) sold off on the CPI repricing. Breadth was negative: decliners led advancers roughly 3:2 on the NYSE.
Commodities & Rates
| Asset | Level | Move |
|---|---|---|
| WTI Crude | $98.46 | +0.6% |
| Brent Crude | $96.66 | +0.8% |
| Dated Brent (spot) | ~$122 | Physical premium persists |
| Gold | ~$4,700 | Steady, 3rd weekly gain |
| 10Y Treasury | ~4.22% | +4 bps (CPI repricing) |
| 2Y Treasury | ~4.45% | +6 bps |
| VIX | ~20.5 | +0.7 pts |
| DXY | 103.5 | +0.3% |
Fed Funds Repricing
| Meeting | Pre-CPI | Post-CPI |
|---|---|---|
| June | 68% cut | ~40% cut |
| September | 85% cut | ~65% cut |
| December | 95% cut | ~80% cut |
The market went from pricing nearly two cuts in 2026 to barely one. Warsh hasn’t even been confirmed yet; Powell is serving on a temporary basis. The Fed is paralyzed: war-driven inflation they can’t control, a softening labor market they need to support, and a leadership transition in limbo.
CPI Deep Dive — March 2026
| Component | Monthly | Annual | Note |
|---|---|---|---|
| Headline CPI | +0.9% | +3.3% | Hottest since May 2024 |
| Energy | +10.9% | +18.2% | War-driven |
| Gasoline | +21.2% | +42.8% | 3/4 of monthly increase |
| Shelter | +0.4% | +4.8% | Sticky but decelerating |
| Core CPI (ex-food/energy) | +0.3% | +2.9% | Relatively contained |
| Airfare | +2.1% | +8.5% | Jet fuel pass-through |
| Apparel | +0.6% | +1.2% | Supply chain friction |
| Medical care | -0.2% | +2.1% | Rare bright spot |
| Used cars | -0.4% | -1.8% | Demand destruction |
The takeaway: Strip out energy and inflation is manageable at 2.9% core. But you can’t strip out energy when the war IS the inflation. Gasoline at the pump hit $5.20/gal national average in March, the highest since 2022. The Fed knows this is supply-driven, not demand-driven, but they can’t cut into a 3.3% headline without losing credibility. This is the stagflation trap: growth slowing, inflation rising, policy frozen.
Company Headlines
Palantir (PLTR) -7.6%, down 12% over two sessions. The week’s biggest loser among large-cap tech. Michael Burry posted (then deleted) that Anthropic is “eating Palantir’s lunch,” citing Ramp data showing Anthropic capturing 73% of new enterprise AI spending. Anthropic’s Claude Managed Agents platform, launched April 8, directly challenges Palantir’s AIP at $0.08/session-hour vs. Palantir’s high-touch, engineer-embedded model. Burry holds put options on PLTR expiring 2027 covering ~5M shares. Dan Ives (Wedbush) reiterated Outperform/$230 PT, calling the comparison “apples to aircraft carriers.” PLTR traded at $128, down 21.6% YTD and 36.5% below its Nov 2025 high of $207.
Our take: Burry’s argument has merit on the margin. Anthropic’s self-serve model is a real competitive threat to Palantir’s professional services revenue. But Palantir’s moat is in classified government work and deeply integrated enterprise deployments that can’t be replicated by an API. The selloff is overdone below $125; above $140 it’s fairly valued. Neutral at current levels.
NVIDIA (NVDA) continued to benefit from ceasefire (IRGC Stargate threat removed) and the Anthropic Managed Agents launch (more inference demand). Stargate Phase 2 construction resumed in Abilene. BofA raised PT to $165.
Meta (META) $574. Ad spending recovery trade intact. Removed from IRGC threat list. Jefferies PT $680. The Managed Agents launch also benefits Meta’s enterprise AI ambitions indirectly, validating the agent paradigm.
Exxon (XOM) / Chevron (CVX) stabilizing after Tuesday’s crash. The Saudi pipeline attack is bullish for US producers: if Saudi exports are constrained, Permian and Gulf Coast barrels become more valuable. But the stocks can’t rally while the ceasefire narrative dominates. Wait for clarity.
Boeing (BA). Top conviction, reiterate. Defence backlog intact. Commercial recovery accelerates if oil stabilizes. Netanyahu’s Lebanon negotiation offer is marginally positive (reduced regional risk). PT $215.
Lockheed Martin (LMT) / Northrop (NOC). Defence names stabilizing after initial ceasefire selloff. FY27 budget locked at $1.01T regardless of outcome. Hezbollah’s rocket resumption Friday is a reminder that peace is not here yet.
Halliburton (HAL) / Schlumberger (SLB). Oilfield services still under pressure. If WTI sustains below $100, shale capex gets trimmed. The Saudi pipeline attack doesn’t help US OFS; it helps US E&Ps.
Trade Ideas
▼ SELL PLTR: Fade the Bounce, Don’t Chase the Dip
Burry’s thesis is directionally right even if the timing is uncertain. Anthropic’s Managed Agents at $0.08/session-hour is a structural threat to Palantir’s high-margin AIP business. The stock is down 12% in two sessions but still trades at 55x forward earnings; there’s no margin of safety. Sell rallies above $135. If you’re short, take partial profits below $120. Risk: Q1 earnings May 4 — if government contract wins accelerate, the Burry narrative breaks.
▲ BUY NVDA: The AI Infrastructure Play Regardless of War Outcome
Anthropic’s Managed Agents launch is net positive for NVDA: more agents = more inference = more GPUs. Stargate Phase 2 resumed. The IRGC threat is off the table. Entry below $135 for a $165 target (BofA PT). This is the cleanest large-cap AI exposure with war-hedging properties (defence AI contracts). Risk: CPI repricing hits growth stocks broadly if the 10Y pushes above 4.35%.
— HOLD Energy (XLE): Saudi Attack Changes the Calculus
Yesterday’s call to trim energy was correct for the ceasefire narrative. But the Saudi pipeline attack introduces a new risk: even the Red Sea bypass route is now vulnerable. Hold remaining energy positions. If Islamabad fails AND Saudi attacks continue, energy re-enters BUY territory immediately. Risk: Successful Islamabad talks + Hormuz reopening timeline = oil to $80, energy crushed.
▲ BUY BA: Boeing, Top Conviction (Reiterate Again)
Every scenario works. Ceasefire = commercial recovery. War continues = defence execution. CPI hot = pricing power on defence contracts with inflation escalators. PT $215. Risk: 737 MAX ramp execution (idiosyncratic).
▲ TACTICAL — Buy VIX Calls Into the Weekend
Islamabad is a pure binary event. VIX at 20.5 is too low for a weekend where the ceasefire could collapse or be cemented. Buy May VIX 25 calls as portfolio insurance. If talks succeed, you lose the premium (~1% of portfolio). If they fail, VIX goes to 30+ and these calls 3–4x. Risk: Weekend is a non-event, VIX drifts lower Monday, premium decays.
What to Watch
This Weekend — Islamabad
This is the only thing that matters. Proximity talks between US and Iranian delegations, mediated by Pakistan. Key questions: (1) Can they resolve the enrichment text discrepancy before it becomes public? (2) Will Iran commit to a Hormuz demining/reopening timeline? (3) Is Lebanon included or excluded? (4) Does Iran demand sanctions relief beyond the ceasefire scope?
A “deal to keep talking” is the base case and is mildly bullish. A concrete Hormuz timeline is very bullish (oil -$10, equities +2–3%). A breakdown is catastrophic (oil +$10, equities -3–5%, VIX to 30+).
Monday April 13
- Market reaction to Islamabad. Pre-market futures will tell the story by 6 AM.
- Any weekend IRGC naval movements at Hormuz.
- Khamenei statement on ceasefire terms (expected but not confirmed).
Tuesday April 14
- Retail Sales (March) — Consumer spending under $5.20/gal gas. Consensus weak.
- Empire Manufacturing — Regional activity gauge.
- Earnings: Goldman Sachs (GS), Bank of America (BAC) — banks kick off Q1 season.
Longer-term
- Warsh confirmation hearings — no date set. Fed leadership vacuum persists.
- PLTR earnings May 4 — the Burry thesis gets tested.
- OPEC+ emergency meeting possible if Hormuz remains closed through April.
For internal use only. Not investment advice.