Thursday delivered something rare: a session that opened in crisis and closed with a genuine diplomatic development. Markets absorbed the Ras Laffan LNG attack overnight — Brent briefly touched $119 per barrel in the early session, the highest level since the 2022 energy shock — but reversed sharply into the afternoon after Israeli Prime Minister Netanyahu announced Israel is actively helping the U.S. reopen the Strait of Hormuz. He added that Iran had "lost the ability to enrich uranium and make ballistic missiles" and suggested the war "may end sooner than people think." WTI fell back below $95 and Brent settled at $108.65, still elevated but well off the intraday highs.
Major indices pared significant early losses — the Dow had been down nearly 500 points at session lows — to close only modestly lower. The Russell 2000 actually gained 0.65%, a notable divergence reflecting the domestic-oriented small-cap complex's relative sensitivity to hopes of a ceasefire and lower energy costs. The S&P 500 closed at 6,606, now down 2.6% for the week and marking its fourth consecutive week of losses — the longest losing streak in over a year. The Dow settled below 46,100 for a second straight day, while the 10-year Treasury yield nudged higher to 4.281%, a sign that bond markets are not yet convinced the inflation threat has peaked.
This was one of the most consequential trading weeks in recent memory — a week in which a hawkish Fed, a PPI shock, an LNG infrastructure attack, and a late-session diplomatic breakthrough all compressed into 72 hours. The market's net verdict: still uncertain, still defensive, but unwilling to capitulate entirely in the face of the first credible signal that the Strait of Hormuz may reopen.
Netanyahu's comments are the most important development of Thursday — but they are not a resolution. Iran has not confirmed, responded, or reduced its posture. The new supreme leader Mojtaba Khamenei has been consistently uncompromising in his public statements. What Netanyahu's remarks do is introduce a genuine probability distribution around a near-term de-escalation that was not present at the open. That matters for positioning. The violent reversal in crude — from $119 to $108 in a single afternoon — shows exactly how much energy risk premium the market is willing to shed on even partial ceasefire signals.
Micron's extraordinary quarter — revenue nearly tripling, Q3 guidance implying another 200%+ year over year — remains the week's most important fundamental development and the most underappreciated one. The AI memory supercycle is not a narrative; it is now confirmed earnings reality. The stock's 4–6% selloff this week is a positioning artifact, not a fundamental verdict. Patience on Micron, Oracle, and the broader AI infrastructure complex is our highest-conviction medium-term thesis entering next week.
Heading into the weekend, Factoz maintains its defensive positioning framework: overweight Energy, Gold, Consumer Staples, and Defense; underweight broad Technology and Consumer Discretionary; elevated Cash. Any confirmed ceasefire or credible Strait reopening timeline would represent the most significant positive catalyst available to markets and would warrant a rapid tactical rotation toward cyclicals and growth. We will be watching for any Iranian response to Netanyahu's remarks over the weekend. The next development in that dialogue will define Monday's open.
Have a good weekend.