We've had four significant relief rallies since the U.S. started its campaign against Iran.
On March 4th, just days into the war, Scott Bessent went on CNBC before markets opened to calm markets.
On March 9th, the oil market shot up 30% on a Sunday night, and by the European morning there were talks of a coordinated supply release — markets calmed.
On March 23rd, markets again were getting hit on Sunday night, after Trump threatened to "obliterate" Iranian power plants — and again by morning things were calmed, this time by Trump's call for a five-day pause on any energy infrastructure strikes.
And then to open this week, markets were at vulnerable levels again, until the administration started circulating talk that the end of the war was near.
These last three are easy to spot in the Russell 2000 chart — small caps which benefit most from oil and rate stability.
As you can see, each of these sentiment massaging events turned the tide for the key small cap index, at around the same level. And each resulted in a relief rally three-times the average daily range of the past decade (big bounces).
But the relief was short-lived in each case.
In this case too, likely.
Trump gave a primetime Oval Office address tonight. UK's Starmer gave a public address to the British people earlier in the day. And prior to that the Aussie Prime Minister (Albanese) addressed the Australian people.
The takeaway was contrast.
First, energy.
Trump wanted the American people to know that the gas price shock would be brief — that "gas prices will rapidly come back down."
And he wanted the world to know that America is energy independent — produces more oil and gas than Saudi Arabia and Russia combined, imports almost nothing through Hormuz, and is now a joint venture partner with Venezuela on the second-largest reserves on earth.
Both Starmer and Albanese (Australia) were talking subsidies and energy rationing.
The other big contrast: timing.
Trump wasn't using tonight to call the mission complete, but said the end of the campaign is a few weeks away.
Conversely, Starmer and Albanese were preparing their countries for a longer storm — one with lingering consequences.
Trump was saying it's almost over. Starmer and Albanese were saying, the hard part is just starting.
This is the energy independent/energy dependent dynamic we've been talking about.
