From Red Sea to Green Sea: S&P 500 Treats Hormuz Blockade Like a Flash Sale on Risk Assets

The S&P 500 pulled off a classic crypto-era magic trick on April 13—turning geopolitical doom into a bullish illusion. After U.S. forces began enforcing a naval blockade across the Strait of Hormuz, the index erased early losses and briefly flirted with green, because apparently, war now counts as a dip-buying opportunity. Who needs peace when you’ve got algorithmic trading and denial?

The whiplash left traders checking their screens for glitches. Equity futures had cratered overnight as President Trump announced the blockade, dropping the mic after peace talks in Islamabad imploded like a DeFi project with a suspicious whitepaper. Word is they couldn’t agree on uranium enrichment, proxy wars, or sanctions—basically the full Axis-of-Evil starter pack.

Blockade Becomes Active

At precisely 10 a.m. ET, US Central Command confirmed the blockade was live—because nothing says “diplomacy” like a timestamped military update. The restriction applies to all ships docking at Iranian ports, though vessels merely transiting to non-Iranian destinations get a free pass. Think of it as the Geneva Convention meets Club Med: you can sail through, but don’t touch the shore.

Before the blockade, Iran was pumping over two million barrels of oil per day—enough to fuel both a nation and a grudge. Now crude’s vaulted above $104, and U.S. gas prices are eyeing $4.25 a gallon like a degen eyes a 100x memecoin. Iranian Parliament Speaker Ghalibaf couldn’t resist a dig: “Enjoy the current pump figures. With the so-called 'blockade', Soon you'll be nostalgic for $4–$5 gas,” he tweeted—because even geopolitical threats need a little drip.

The S&P 500 had just posted its best week since November, up 3.6%, riding hopes of peace like a Lambo on moon math. But Sunday night’s optimism evaporated faster than a stablecoin during a bank run—until Monday’s reversal made traders wonder if the market had confused a crisis for a clearance sale.

JPMorgan Says Buy the Pullback

Enter JPMorgan’s Mislav Matejka, stage right, holding a “Buy the Dip” sign like it’s a sacred text. Despite the saber-rattling, the strategist sees a V-shaped recovery in three to 12 months—because nothing heals like time and institutional FOMO. The bank’s thesis? Bearish sentiment is overdone, everything’s oversold, and opportunity loves a panic sale. They’re also betting on a revival of international equities, emerging markets, small caps, and value stocks—basically the unloved stepchildren of the 2021 bull run.

Then came the rumor mill: Iranian officials might be considering a full uranium enrichment rollback to appease the U.S. The report remains unconfirmed—Tehran hasn’t exactly issued a press release—but markets didn’t care. It was like hearing a whale might buy BTC; truth is optional, momentum is king. The rumor alone helped fuel Monday’s intraday rally, proving once again that hope is the most leveraged asset class.

Shipping data from Kpler shows traffic through the Strait of Hormuz remains depressed, even with a minor weekend uptick. That’s not surprising—when negotiations fail and enforcement rules are murkier than a Telegram group admin list, shippers tend to slow down. This chokepoint handles about 20% of global oil supply, so every delayed tanker is basically a candlelit vigil for inflation.

Bitcoin Holds Steady

Meanwhile, Bitcoin (BTC) chilled above