War Eased. AI Found a New Market.

GOOD MORNING, Wednesday gave markets their strongest de-escalation signal in weeks. The S&P 500 rose 0.72%, the Nasdaq gained 1.16% and Brent fell to $101.16 after President Trump said U.S. military operations in Iran could end within two to three weeks. But the important caveat remained physical: Hormuz was still constrained, and analysts warned energy flows would recover slowly even if a ceasefire arrived. At the same time, the AI trade found a new venue. SpaceX confidentially filed for an IPO that could value the combined SpaceX-xAI company above $1.75 trillion, turning orbital compute, satellite infrastructure and frontier AI into a coming public-market valuation test.

MARKETS | TLDR

Wall Street rallied on Iran de-escalation hopes: The Dow rose 0.48% to 46,565.74, the S&P 500 gained 0.72% to 6,575.32 and the Nasdaq climbed 1.16% to 21,840.95 as investors priced a lower probability of prolonged escalation.
Oil fell, but Hormuz remained the real constraint: Brent dropped 2.7% to $101.16 and WTI settled at $100.12 after Trump's comments, even as analysts cautioned that energy flows through the strait would be slow to normalize.
Treasury yields stayed elevated despite the relief trade: The 10-year yield rose about 1.6 basis points to 4.327% as resilient U.S. economic data kept the Fed backdrop from becoming fully supportive.

DE-ESCALATION

Oil Fell. Hormuz Still Had to Reopen.

Global markets rallied Wednesday after President Trump said U.S. military attacks on Iran could end within two to three weeks and suggested Tehran did not necessarily need to strike a broader deal first. The S&P 500 gained 0.72%, the Nasdaq rose 1.16% and Brent fell 2.7% to $101.16 a barrel.

That matters because oil had become the market's fastest transmission channel from geopolitics into inflation and valuation. Every credible step toward de-escalation reduces the probability of prolonged supply disruption, easing pressure on gasoline, freight and inflation expectations. Technology benefits twice: lower energy risk helps the growth outlook, while lower inflation risk reduces pressure on the discount rate applied to future AI earnings.

The caveat is physical rather than diplomatic. Trump also said a ceasefire would depend on Iran ending its blockade of the Strait of Hormuz, while Iran denied requesting a ceasefire. Analysts told Reuters that flows through the strait would take time to recover even if fighting stopped. Wednesday's rally therefore priced a better path, not restored supply. The next durable signal is tanker traffic, not another headline.

AI CAPITAL MARKETS

SpaceX Is Taking the AI Infrastructure Trade Public

SpaceX confidentially filed for a U.S. IPO that could value the combined SpaceX-xAI company at more than $1.75 trillion and potentially raise over $50 billion. The filing follows the merger of SpaceX with xAI, which valued the rocket company at $1 trillion and the Grok developer at $250 billion. If completed near those figures, the listing could become the largest ever.

That matters because the valuation is no longer just about rockets and Starlink. SpaceX increasingly presents itself as an infrastructure company spanning satellite communications, defense, frontier AI and eventually data centers in orbit. Public investors would therefore be asked to underwrite a model in which enormous capital requirements are justified by several markets that are growing quickly but have very different economics.

The opportunity is obvious: Starlink already provides recurring revenue and SpaceX has a dominant launch position. The harder question is what portion of a $1.75 trillion valuation belongs to businesses that exist today versus orbital compute and AI ambitions that require years of additional capex. A successful offering would expand the AI trade beyond chips, cloud and software. It would also test how far public markets are willing to fund infrastructure before the cash-flow profile fully matures.

HEADLINES

Space stocks rally on the SpaceX IPO spillover: Rocket Lab gained 5.5%, Planet Labs 11% and Intuitive Machines 10.5% as investors bet a blockbuster SpaceX listing could re-rate the broader space sector.
SpaceX may reserve up to 30% of its IPO for retail investors: An unusually large retail allocation could amplify demand and volatility, turning the listing into both a capital-raising event and a test of Musk's public-market following.
Gold rose even as risk assets rallied: Spot gold gained more than 2% to roughly $4,768 an ounce, suggesting investors were willing to buy de-escalation while still maintaining protection against geopolitical and inflation uncertainty.
Europe's manufacturing rebound may contain a supply-chain distortion: Euro-zone factory growth reached its strongest in nearly four years, but some of the acceleration reflected disrupted supply chains rather than clean demand strength.
The IEA warns Middle East supply losses could worsen in April: Fatih Birol said disruptions would increase and begin affecting Europe's economy, reinforcing why actual Hormuz flows matter more than political optimism alone.

UPCOMING

March payrolls — April 3: The jobs report will determine whether resilient labor demand gives the Fed room to keep waiting while it assesses the inflation impact of the energy shock.
OPEC+ meeting — April 5: Producers can discuss additional supply, but the effectiveness of any increase will still depend on whether Gulf barrels can move through Hormuz.
March CPI — April 10: The first major inflation print covering the war period will show how much the oil shock has already reached gasoline and consumer prices.
TSMC March revenue — April 10: The monthly update will provide a high-frequency check on whether AI semiconductor demand is staying resilient through the geopolitical shock.

DEEP INSIGTHS

The SpaceX IPO as an AI Valuation Test

Read this for what public investors may actually be asked to value. SpaceX combines a proven launch franchise and Starlink subscription business with xAI and much longer-duration ambitions such as orbital data centers, making the potential $1.75 trillion valuation a test of how much future infrastructure optionality markets will pay for today.

Why the De-escalation Rally Still Depends on Hormuz

This is useful because it separates political signaling from physical normalization. Oil fell when Trump suggested the war could wind down, but analysts still expected a slow recovery in energy flows even under a ceasefire. For inflation and rates, the tanker data ultimately matters more than the diplomatic timetable.