On March 31, President Trump announced a two-week ceasefire with Iran. The next two weeks produced one of the most synchronized global equity rallies in modern market history.

Every major country ETF moved higher. Twenty-two delivered double-digit returns. The S&P 500 — via the SPDR S&P 500 ETF Trust (SPY) — breached 7,000 points for the first time in its history. This is the full scorecard, the anatomy of what drove it, and the open question: is this a new bull leg, or a fully priced peace trade that ran out of room?

The Ceasefire Trade: Full Scorecard

Performance from March 30, 2026 (close, day before ceasefire announcement) through April 16, 2026:

22 country ETFs. 22 double-digit returns. Approximately 12 trading sessions.

What Actually Happened

The setup entering March 30 was extreme. Markets had spent six weeks pricing an oil shock that IEA Chief Fatih Birol had called "more serious than 1973, 1979 and 2022 combined." Twelve million barrels per day had been removed from global markets. Institutional investors had systematically reduced equity exposure — particularly in energy-importing markets — as Brent traded above $100 and rate hike probabilities climbed.

Three things unwound simultaneously on April 7-8 when the ceasefire was announced:

1. The oil shock repricing. Brent fell more than 15% in a single session as the Hormuz supply premium collapsed. Reuters reported "stocks surge, oil dives below $100 as Iran ceasefire sparks relief rally." NPR: "Oil prices plunge and stocks soar after U.S. and Iran agree on a ceasefire."

2. The inflation/rate hike fear unwind. The war had embedded a significant energy-driven inflation premium into rate expectations. As oil collapsed, so did the probability of a Fed forced back into hawkishness. Polymarket's Fed rate hike probability for 2026 sits at 14.5% as of April 16 — down from highs exceeding 30% during the acute war phase.

3. Positioning squeeze. Institutional investors had reduced equity exposure entering the ceasefire. The announcement forced a rapid chase — particularly pronounced in the most shorted, most underweight markets. South Korea (EWY, +26.6%) had been the single most visible war loser given its 98% energy import dependence. The reversal was correspondingly violent.

The Wall Street Journal noted the "head-spinning change in tone." Barron's asked: "How Markets Went from Iran War Angst to Watching for a New S&P 500 Record." The Guardian reported SPY breaching 7,000 "for the first time in history." By April 15, the S&P 500 had recovered all war-related losses and pushed to new all-time highs.

Why Korea Led (+26.6%)

The iShares MSCI South Korea ETF (EWY) was the single largest beneficiary of the ceasefire trade — and the move demands explanation. EWY's +26.6% since March 30 reflects three simultaneous forces converging:

Energy cost reversal. Korea imports 98% of its energy. The Hormuz blockade had imposed a direct cost shock on Korean industrial margins — particularly for POSCO (steel), LG Chem (petrochemicals) and Samsung SDI (battery materials). Oil below $95 eliminates that margin compression immediately.

TSMC/Samsung AI earnings. TSMC reported Q1 2026 earnings showing AI data centre revenue accelerating beyond consensus. Samsung's HBM4 memory shipments to Nvidia accelerated in the same period. The ceasefire removed the macro headwind precisely as the sector fundamental tailwind peaked.

Valuation compression reversal. EWY entered the ceasefire at 7.08x forward P/E — a 58.6% discount to the MSCI ACWI. The cheapest it had traded relative to global peers in years. The combination of the cheapest valuation in the universe plus the largest fundamental headwind removal produced the largest absolute return.

The Paradox: SPY at 7,000 with Oil Still at $90

The most analytically significant aspect of this rally is what it happened despite. As of April 16:

• Brent crude remains ~$90 — well above pre-war levels of ~$75. The oil shock has not fully unwound.
• Hormuz traffic has not normalized. Polymarket prices only a 23.5% probability of normal Hormuz flows by April 30.
• CBS News confirmed this week that VP JD Vance told reporters "we have not reached an agreement" after direct talks with Iranian and Pakistani negotiators.
• US inflation above 4% is priced at 51.5% probability by Polymarket — the inflationary residue of six weeks of $100+ Brent has not fully cleared.

Markets have front-run the peace. SPY is at all-time highs pricing a resolution that prediction markets assign only 32.5% probability by April 30 and 48.5% by May 31. The full peace deal by June 30 is at 63.5% — the majority scenario, but not a certainty.

What Polymarket Says Now

Prediction market probabilities as of April 16, 2026 — a significant update from the 73%/60% figures cited earlier this week:

US-Iran permanent peace deal:

• By April 22: Yes 15.5% — essentially no deal this week
• By April 30: Yes 32.5%
• By May 31: Yes 48.5% — nearly coin-flip by end of May
• By June 30: Yes 63.5%

Note: These probabilities have moved sharply lower since April 13-14. The BBC reported oil jumped back above $100 on Monday April 14 after US-Iran peace talks failed. Business Insider confirmed "the US began a blockade in the Strait of Hormuz after weekend peace talks yielded little." The prediction market data reflects this deterioration — the peace deal by April 30 has gone from 73% to 32.5% in days.

What Iran demands Trump might agree to (Polymarket):

• Unfreeze Iranian Assets: 41%
• Oil Sanction Relief: 36%
• Uranium Enrichment: 25%
• Hormuz Transit Fees: 8%

Macro:

• US recession by end-2026: 28%
• Fed April meeting: 99.05% no change
• 1 Fed cut in 2026: 26.5% — the market is pricing fewer cuts than previously anticipated

Three Scenarios for the Ceasefire Trade

Scenario 1: Deal by May 31 (48.5% probability)

A permanent deal with Iranian asset unfreezing and/or sanctions relief would be structurally positive. Iranian crude returns to market, Brent falls toward $80-85, Hormuz normalizes, energy import cost relief flows through to Korea, Taiwan, India and Japan earnings. EWY, EWT and EWJ would likely extend the rally. The inflation >4% risk decreases significantly, supporting further Fed hold. This is the bull leg scenario.

Scenario 2: Extended ceasefire, no deal (base case near-term)

The ceasefire holds but formal deal remains elusive. Markets trade sideways with elevated volatility as each round of talks either raises or deflates hopes. Oil remains $85-95. SPY consolidates near 7,000. The rally from March 30 is retained but not significantly extended. EWY and EWT give back some gains on earnings cycle fatigue.

Scenario 3: Ceasefire collapse

If the two-week ceasefire expires without extension and hostilities resume, the March 30 lows become the reference point. EWY would be the first to reverse — it gained the most and has the most energy import sensitivity. SPY would test the 6,400-6,600 range. Oil would re-breach $100. This scenario is not the majority outcome but the oil market's "hair trigger" (Gulf News, April 16) reflects that it remains live.

The Valuation Picture Post-Rally

The ceasefire rally has repriced several markets. Key forward P/E multiples as of April 16:

After a +26.6% rally, EWY still trades at 7.08x forward P/E — a 58.6% discount to the MSCI ACWI. The valuation case for Korea has not been destroyed by the rally. Greece (GREK) at 8.42x and Brazil (EWZ) at 9.82x remain deeply discounted. The markets that have rallied the most remain the cheapest in the world.

The counterpoint: the US (SPY) at 19.96x forward P/E is now at a 16.6% premium to the ACWI — at all-time price highs and near all-time valuation highs. The divergence between the cheapest (EWY at 7.08x) and most expensive (SPY at 19.96x) major markets is 65 forward P/E percentage points. That gap existed before the rally. It exists after. It will drive the next rotation.

Live performance data including the ceasefire trade period at countryetftracker.com. Valuation comparisons at countryetftracker.com/valuation.

Frequently Asked Questions

Why did South Korea (EWY) rally more than any other country ETF from March 30?

EWY entered the ceasefire trade as the most compressed market in the universe — down sharply from its war-period highs on energy import shock fears, while simultaneously sitting at 7.08x forward P/E (58.6% discount to ACWI). The ceasefire removed the single largest identifiable macro headwind (oil cost) at the exact moment Samsung's AI semiconductor earnings were accelerating. The combination produced the largest absolute return: +26.6% in 12 sessions.

Why is SPY at record highs when the peace deal hasn't happened yet?

Markets price probabilities, not certainties. A 63.5% probability of a permanent deal by June 30, a Fed on hold at 99% confidence, and recession probability at 28% is sufficient for equity markets to front-run a positive resolution. The risk is that SPY is priced for a scenario that Polymarket assigns only ~50% probability by May 31. If talks fail again, the re-pricing would be rapid.

Which country ETFs have the most upside if the deal closes?

The largest beneficiaries of a permanent deal with Iranian oil sanctions relief would be energy importers that still trade at deep discounts: South Korea (EWY, 7.08x), India (INDA, 18.78x), Japan (EWJ, 15.70x) and Thailand (THD, 17.83x). The largest losers would be energy exporters: Norway (ENOR, 15.27x) and Saudi Arabia (KSA, 14.67x), whose oil revenue premium would compress as Iranian crude re-enters the market.

What is the risk that the Polymarket peace deal odds are too optimistic?

The April 14 collapse of US-Iran talks — which sent oil back above $100 and reset the peace deal by April 30 probability from 73% to 32.5% — demonstrates how rapidly these markets move. The ceasefire expires imminently. CBS News confirmed VP Vance said "we have not reached an agreement." The gap between SPY at all-time highs and Polymarket's 48.5% deal probability by May 31 is the defining tension in global markets right now.