U.S. stocks are nearing a recovery of their losses since the Iran war, while crude oil remains elevated due to risks around the Strait of Hormuz.

CryptoWorld News reports that on April 10, according to CNBC, the U.S. stock market is nearing a recovery from the decline triggered by the “Iran War,” with investors increasingly betting that geopolitical shocks will be short-lived. However, the oil market remains more cautious. The two-week ceasefire agreement announced late Tuesday boosted the stock market rebound, triggering a round of a “relief rally” that helped major indexes recoup more than two-thirds of the losses since the conflict erupted in late February. The S&P 500 index is currently less than 1% below pre-war levels (6,878.88 points).

Meanwhile, due to ongoing concerns about Middle East supply bottlenecks, oil prices remain elevated. In a client report, Barclays strategists said, “The stock market’s expectation of a ‘good outcome’ is clearly higher than that of the oil market, and stock index performance has already significantly outpaced the pullback in oil futures.” They noted that this rebound was partly driven by “strong short covering,” as short sellers were forced to close positions during the rise. Barclays also said investors’ confidence in President Trump’s efforts to seek an “exit path” to avoid greater economic losses is growing. “In our view, further downgrades are still the most reasonable outcome, because Trump needs an exit plan to deal with the rising political and economic costs,” the firm said.

Citi strategists also expressed a similar view, saying that Tuesday’s ceasefire changed market sentiment. “Although there are still many uncertainties, the fact that the U.S. and Iran found an ‘exit path’ is itself a positive signal. Obviously, the road to an agreement will not be a straight line. Investors have already substantially reduced risk exposure, and if the ceasefire holds, they may be drawn to add back positions, which means the rebound may still have room to continue.” By contrast, the oil market is still pricing in a more cautious scenario, because tensions around the Strait of Hormuz continue and the key shipping route remains largely closed. U.S. West Texas Intermediate (WTI) crude oil futures for May delivery were close to $100 per barrel on Friday, compared with about $67 before the war broke out.