Temporary ceasefire between the US and Iran! The market takes a breather— is this a glimmer of peace or the calm before the storm?

Global markets rally! Who's leading the rebound?

After 39 days of waiting, 39 days of anguish, on April 8th in the early hours, the US and Iran finally reached a temporary ceasefire agreement (effective at 8:00 AM Beijing Time on April 8). A year later, the market once again experienced a 'miracle day,' with Hong Kong, US, mainland China, and South Korean markets seeing a 'revenge' rally.

Global market performance on April 8:

Hong Kong’s three major indices surged across the board， $Hang Seng Index (800000.HK)$ Closing up 3.09%, $Hang Seng TECH Index (800700.HK)$ Closing up 5.22%; all three major US indices skyrocketed, with China-related ETFs and popular Chinese stocks gaining strength, $Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$ Up 7.4%;A-share market sees a strong rebound， $SSE Composite Index (000001.SH)$ Up 2.69%, $Chinext Price Index (399006.SZ)$ Up 5.91%;Japan and South Korea's stock markets, previously impacted by the external situation, experienced a collective rally,with Japan’s stock market surging nearly 3,000 points, marking the largest single-day gain of the year, $Korea Composite Index (.KOSPI.KR)$ up more than 6%, triggering the circuit breaker mechanism.

Global stock markets are experiencing a 'resonant' rise, with notable differentiation across sectors:

Hong Kong stocksstellar tech stocks, storage concepts, optical communications, semiconductors, gold, silver, and copper saw impressive gains,, among which $CSOP SK Hynix Daily (2x) Leveraged Product (07709.HK)$ Soared over 48%, $CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK)$ Surged over 35%, optical communication sector $YOFC (06869.HK)$ Share price hit a new high, closing up 18.94%, with year-to-date gains exceeding 334%!

On the other hand, the previously favored energy sector pulled back,Both US and Brent crude oil prices fell below $100/barrel,The entire oil and gas sector plummeted.

Heat map of Hong Kong stocks and the list of top gainers (Screening criteria: market capitalization greater than HKD 10 billion)

Learning from history: How will the market move after geopolitical tensions ease?

The shifting focus of geopolitical storms is nothing new. Reviewing market trends following the easing of geopolitical conflicts in recent years:

– Iran conflict(2025): Market panic significantly eased after the ceasefire, crude oil prices plummeted, US stocks quickly recovered, and Hong Kong stocks gradually stabilized after a brief decline.

– Iraq War(2003): The US stock market exhibited the typical characteristics of 'anxiety-driven declines before the war, rapid rebound after the war, and a long-term bull market,' showing strong overall performance with the S&P 500 index rising 26% cumulatively in 2003.

– Gulf War(1991): Energy shocks at the beginning of the war and expectations of an economic recession weighed on the market, but as the situation became clearer, the market quickly rebounded, with $S&P 500 Index (.SPX.US)$ a cumulative increase of over 26% in 1991.

Looking back at history, wars led by the US in the Middle East often ended in two forms,one being a blitzkrieg., such as the Israel-Iran conflict in June 2025; once the blitzkrieg fails to achieve a decisive breakthrough, the war will evolve into the second type of outcome,a protracted war, with a typical case being the Iraq War in March 2003.

It can be observed that after geopolitical tensions ease, the market typically undergoes three phases—The first phase is 'emotional recovery', characterized by a general rise in risk assets and a pullback in safe-haven assets;The second phase is 'fundamental verification', where the market begins to diverge and sectors that truly benefit continue to rise;The third phase sees the market return to fundamentals-driven dynamics。

A glimmer of peace or the calm before the storm?

It is worth noting that this ceasefire only has a two-week window, and the parties’ descriptions of the agreement are inconsistent. This meansMarket uncertainty could return at any time.

Iran calls the ceasefire a 'tactical adjustment', emphasizing it hasn’t abandoned core demands (such as uranium enrichment rights, war reparations); the US says 'giving peace a chance,' butwarns that violations will trigger tougher responses; Israel stated there are 'more objectives to achieve,' which will be completed 'either through the agreement or by resuming the conflict,' andemphasized that Israel is 'ready to return to the battlefield at any time'。

In recent market trading, the dominant theme has been 'the worst-case scenario hasn't happened for now,' rather than 'the Middle East issue has been resolved.' Key points to watch going forward: 1) The first round of talks is expected to take place on the morning of the 11th local time; 2) The expiration date of the ceasefire will be the next 'judgment day' for global markets (expected around April 21st based on the two-week timeframe).

War, by nature, is never linear.The latest data from Polymarket shows the probability of Trump announcing an end to military operations against Iran? The likelihood for April 21st dropped to 26%, while the probability for June 30th rose to 79%, with more bets being placed on a protracted conflict.

Three scenarios face the market after the two-week ceasefire:

Scenario 1: Negotiations collapse, and conflict resumes.This is the "tail risk" that the market fears most. The gap between Iran's ten-point plan and U.S. demands is too large to bridge within two weeks. With a fragile foundation of trust between the two sides, if negotiations fail, the blockade of the Strait of Hormuz may be extended, pushing oil prices to remain high, reigniting an inflation crisis. Renewed conflict will come with higher 'unexpected escalation premiums,' driving up demand for safe-haven assets while pressuring the stock market.

Scenario 2: Talks continue, with risks remaining unresolved.The two sides acknowledge their significant differences but are unwilling to let talks completely collapse, choosing instead to extend the ceasefire period to continue their strategic maneuvering. Entering a state of 'fighting while talking,' uncertainty persists without worsening. Oil prices enter a volatile range, sector rotation accelerates, and the stock market shifts into a 'boiling frog' mode, maintaining high volatility.

Scenario 3: A substantive agreement is reached, extending peace.This is the outcome the market hopes to see most—both sides make concessions to reach a historic agreement, fully reopening the Strait of Hormuz. The geopolitical landscape of the Middle East is reshaped, alleviating global supply chain risks. Oil prices return to fundamental pricing, and inflationary pressures significantly decrease. Global risk appetite rebounds, returning to fundamentals-driven dynamics.

With risks still looming, how should one position themselves? Smart investors have already begun positioning around two main themes: first, picking up 'geopolitically secure-related bargains' that were oversold; second, focusing long-term on the 'AI industry.'

Sectors benefiting from falling oil prices：Airlines, shipping, and airports—plummeting oil prices mean sharply reduced costs for airlines, significantly improving earnings expectations.On April 8th, $Airlines (LIST2090.US)$ The American Airlines concept sector surged by 7%, $Airports & Air Services (LIST2234.US)$ with a significant rise of 4.53%.

Energy substitution concept: Jacky Tang, Chief Investment Officer for Emerging Markets in the Private Banking division of Deutsche Bank, stated in a recent interview that in the long run, 'everyone knows' that the world 'cannot rely on oil.'Governments around the world will continue to work towards achieving energy independence. The focus is on new energy, energy storage, and nuclear power, which is often overlooked. On April 8th, nuclear power stocks $NANO Nuclear Energy (NNE.US)$ closed with an increase of 11.83%, $Oklo Inc (OKLO.US)$ and closed with an increase of 7.77%.

Innovative drugs: Huaxin Securities believesAfter half a year of adjustments, the outlook for innovative drugs has returned to reasonable levels. Coupled with the upcoming AACR conference, speculative enthusiasm among investors has significantly rebounded.According to the 2025 annual reports, several companies, including BeiGene, Innovent Bio, and Everest Medicines, have turned losses into profits. Hong Kong stocks $WUXI APPTEC (02359.HK)$ rose over 30% year-to-date, $INNOVENT BIO (01801.HK)$ rose over 15% year-to-date.

Long-term AI opportunities：

1) AI computing power: With the explosion of Agent and multi-modal technologies, the Token economy is on the rise. According to OpenRouter data, weekly Token consumption surged from 2.1T to 24.5T in the past year, increasing by 280% since 2026. As of the mid-session on April 9, the stock price of the company known as the 'first Token stock' in the market $XUNCE (03317.HK)$ soared, rising over 30% this week, while the leading large model stock $KNOWLEDGE ATLAS (02513.HK)$ gained nearly 20% this week;

2) Optical communications: Citi Construction Investment Securities continues to recommend the optoelectronic module industry chain with high earnings visibility, particularly the optical fiber and cable sector, which has shifted from recovery to a phase of both volume and price increases. Hong Kong-listed Yangtze Optical Fiber and Cable has surged nearly 30% in April;

3) Storage;The construction of AI infrastructure is driving a tightening of chip supply and a surge in prices. Industry leader Samsung Electronics' performance has exceeded expectations, boosting the overall industry outlook.As major technology companies increase their investments in data centers and advanced computing infrastructure,The global chip industry is entering a long-term supercycle dominated by AI.South Korean securities firms have successively raised target prices. KB Securities increased Samsung Electronics' target price from 320,000 won to 360,000 won and predicted that the company's operating profit this year would reach 327 trillion won. As for SK Hynix, Korea Investment & Securities raised its full-year operating profit forecast on Wednesday by 28% to 216 trillion won (approximately $146.55 billion), more than four times that of 2025. Additionally, recent market developments show new opportunities, $Roundhill Memory ETF (DRAM.US)$ with a focus on the storage chip industry chain, heavily investing in Micron (23.83%), Samsung (24.99%), and SK Hynix (24.22%). Since its listing, it has risen over 20%.

4) DCI Concept: As the global AI large model competition enters a heated phase, bottlenecks in infrastructure are shifting. Dongwu Securities pointed out,DCI (Data Center Interconnect) represents the post-cycle demand for AI computing power construction.For detailed analysis, click to view the previous share'The Next Stop in the Compute Power Surge: Tech Giants Double Down on DCI — Key Players in Hong Kong and US Stocks Worth Watching!'

Recent trading tips:

1. Focus on risks and uncertainties: control position size, avoid going all in, and keep cash to respond to sudden changes. In the short term, you can moderately participate in opportunities brought by market sentiment recovery, but strictly control your positions, especially avoiding chasing sectors that have already risen sharply.

2. Value investing: look for companies with solid earnings support, and avoid chasing risky speculative stocks that might trap you in losses. The core of investment still lies in returning to fundamentals.The storm of geopolitical tensions will eventually pass, while corporate profitability, industry growth potential, and economic structural transformationare the fundamental factors determining long-term returns.

Lastly, wishing for world peace and an early end to conflicts.

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