Why Markets Are Shrugging Off Trump's Hormuz Blockade

• Software stocks led the rally with the iShares Expanded Tech-Software Sector ETF surging over 5%, possibly sparked by a Goldman Sachs post suggesting tech stocks were oversold
• Oil price gains faded during the session despite the blockade announcement, indicating reduced concern about sustained energy supply disruptions
• Markets are beginning to decouple from Iran conflict news as investors shift focus to other opportunities, though the Strait of Hormuz bottleneck remains a key concern

Summary: Markets Rally Despite Trump's Hormuz Blockade

Key Development:

President Trump announced a blockade of the Strait of Hormuz after weekend negotiations with Iran to end the ongoing war failed. Despite initial negative futures trading, major U.S. indices closed higher on April 13, 2026.

Market Performance:

• S&P 500: +0.6% (6,856.42)
• Dow Jones: +0.2% (48,023.69)
• Nasdaq: +0.8% (23,088.60)
• Oil prices rose initially but retreated during the session

Sector Highlights:

Software stocks led gains, with the iShares Expanded Tech-Software Sector ETF (IGV) surging over 5% in afternoon trading. Major tech stocks showed mixed performance, with Microsoft up 3.1% while Amazon and Nvidia remained flat. Goldman Sachs commentary suggesting tech stocks were oversold may have fueled the sector recovery.

Market Implications:

Investors appear to be discounting worst-case scenarios, believing a sustained conflict leading to a global energy crisis is now less likely. The two-week ceasefire announced last week, despite the Strait of Hormuz remaining effectively closed, has shifted sentiment toward risk-on positioning.

The market's resilience suggests investors are preparing for a potential stalemate rather than prolonged conflict, though resolving the Strait of Hormuz bottleneck remains critical. As geopolitical concerns fade, markets are refocusing on other opportunities, particularly in technology.

Outlook:

Analysts recommend monitoring Iran developments and oil prices, but expect markets may increasingly decouple from Middle East events as alternative market narratives emerge.