Thursday was the second straight down day. But the shape of the session mattered more than the finish.

Stocks sold off early after Iran struck a Qatari LNG facility in response to Israel’s attack on South Pars. Energy and defense held up. Anything exposed to fuel costs got hit first.

Then Netanyahu spoke. Oil gave back most of its spike. Stocks recovered much of the early damage by the close.

Futures are mixed this morning. Nasdaq futures are lower. S&P and Dow futures are modestly higher. That split matters. It fits the stagflation trade now taking hold. Growth is under more pressure while energy-linked names keep support.

Japan is closed for a holiday. Hong Kong finished lower. WTI is up from Thursday’s close. Gold is trying to recover after a brutal week. The VIX is rising into the weekend, not falling.

Market Implication

If WTI stays near current levels and de-escalation signals hold, rate-sensitive sectors may get some room to breathe. If another infrastructure strike hits over the weekend, yields likely move higher again and that pressure returns fast.

What moved markets Thursday afternoon was relief, not resolution.

The Strait is still closed. The physical supply picture did not improve when Netanyahu spoke. What changed was the market’s guess about how long this phase of the conflict lasts.

That distinction matters. Pipeline reroutes still leave a large share of normal Hormuz flows offline. Reserve releases have not come close to filling that gap.

At the same time, the Fed trade kept shifting. Most officials now project no cuts this year. Macquarie took the next step and said the next move is more likely a hike than a cut. Rates have adjusted faster than stocks. That usually means equities still have more work to do.

Structural Setup

The energy shock and the rate path are now part of the same trade.

If WTI stays high, the Fed stays pinned and fuel-sensitive sectors stay under pressure. Airlines feel that first. Integrated energy keeps absorbing the supply premium.

If oil breaks lower and stays there, the rate story softens with it. That is when the pressure starts to come off those trades.

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Thursday’s tape broke along clean lines.

Energy and defense held up. Consumer names and transports got hit early. The late bounce looked more like short-covering than real conviction.

The bigger tell was gold. In a true flight-to-safety market, gold should have held up better. Instead, it had one of its worst weeks in years. That is what happens when a supply shock lifts inflation risk and keeps rates high. Gold is not failing. It is adjusting to a market that no longer expects easy cuts.

This morning’s bounce does not change that read.

Sector Read

Fertilizer names have been quietly telling the same story for two weeks.

Nutrien, Mosaic, and CF are not just riding oil. They are tied to sulfur, ammonia, and other inputs moving through the Gulf system. That makes them a supply chain trade as much as an energy trade.

If the Strait stays shut into spring, that divergence can keep running. If the waterway reopens, that trade likely unwinds faster than crude.

Netanyahu’s press conference introduced something the market had not heard all week.

Israel signaled it was stepping back from further infrastructure strikes after pressure from Trump. That created a diplomatic off-ramp for Tehran. It did not change the physical picture.

The Strait is still closed. The IRGC has not signaled any plan to reopen it. What changed was the tone, not the supply chain.

The U.S. decision to allow some sanctioned Russian crude into the system shows how stretched the response toolkit has become. Small volume. Large signal.

Watch Signal

A named coalition committing to sustained tanker escort through the Strait is the event that would truly reprice the setup.

That would hit WTI first. Then it would move through integrated energy, LNG, and the fuel-sensitive parts of the tape.

Until then, the main weekend risk is simple. Another infrastructure strike would push the market right back into a longer-duration war read.

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FedEx beat by a wide margin Thursday night.

That matters less because of FedEx itself and more because of what it says about the economy’s ability to absorb a shock like this.

FedEx is one of the cleaner read-throughs on the physical economy. It feels jet fuel, diesel, freight disruption, and softer international volumes almost in real time.

It absorbed all of that, called this its most profitable peak season on record, and raised guidance again.

The Read

UPS, Ryder, and Werner have been sold as if the whole transport group shares the same margin risk. FedEx just showed that is too simple.

If WTI holds near current levels, the companies that did the efficiency work before the shock should separate from the pack.

If oil makes another sustained move higher and the Strait stays closed into Q2, that buffer gets burned off fast. Then the sector read flips.

Economic Data: No notable releases

Earnings: No notable reports

Overnight: Nikkei -3.38% | Shanghai -1.24% | FTSE +0.09% | DAX +0.10%

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The weekend sets up a clear fork.

If ceasefire signals build and a coalition moves to escort tankers by Monday, the energy and rate setup looks different at the open.

If another infrastructure strike hits before then, the hike conversation moves closer to the center. The question stops being when the Fed cuts. It becomes how long policy stays pinned.

FedEx showed that corporate America can absorb an energy shock measured in weeks.

What the market still does not know is what happens if this lasts into summer.