Stocks closed moderately lower yesterday as peace talks with Iran were canceled.

Stocks are still sharply higher from just a few weeks ago. And all of the major indexes are still in the green YTD.

The 10-day ceasefire was due to expire on Wednesday (today). Round 2 of talks never materialized in Islamabad over the weekend. And hopes for talks yesterday fell apart. Vice President JD Vance postponed his trip to Pakistan until a later date.

But afterwards, President Trump decided to extend the ceasefire, saying Iran's government was "seriously fractured." And that the ceasefire would continue "until such time as their leaders and representatives can come up with a unified proposal." But he said the blockade would remain in place.

Iran, however, sees the blockade as the equivalent of bombing, with an advisor to Iran's parliament speaker Mohammad Baqer Qalibaf saying that the ceasefire extension was "a ploy to buy time" before the U.S. strikes again. And that the blockade was "no different from bombardment and must be met with a military response."

We will have to see what develops. But stocks were higher in extended trading on the ceasefire extension.

In spite of the increased tension between the two countries, and the growing unlikelihood (which was evident even last week) that a longer-lasting peace deal was going to be had before the ceasefire agreement expired, stocks have put in a sharp rally and have been holding the overwhelming majority of those gains.

I'm reminded of what Steve Eisman said shortly after the war began ? that he wouldn't change a thing in his portfolio, "not a single trade," and that "if it goes well, two months from now, prices will be back to where they were."

Well, it happened even quicker than he predicted.

And that's because, geopolitical conflicts and events usually only have a short-term impact on the markets. And that over the last 40 years of geopolitical shocks, markets usually bounce back quite fast. And we literally just witnessed that play out again over the last few weeks.

Additionally, the recent surge in equities goes far beyond hopes for a permanent de-escalation. That includes the resiliency of the economy, surging productivity, the expectation for eventually lower interest rates, double-digit earnings growth not only for this earnings season, but also for the next 3 quarters, and of course, the ongoing AI boom.

The market appears to be looking past the conflict. And as Steve Eisman said, "long-term, this is very, very positive."

In other news, Federal Reserve Chairman nominee Kevin Warsh's Senate confirmation hearing yesterday went as expected. Those who support him, appear to still do, and those who oppose him, appear to still do as well. And that's probably the best one could hope for.

But the vote is expected to be held up by Senator Thom Tillis as long as the investigation into current Fed Chair Jerome Powell continues. Once that's dropped, or Mr. Tillis drops those conditions, Mr. Warsh is expected to be confirmed given the majority of support he has on the Banking Committee.

Earnings season continues with another 137 companies on deck to report today, including Vertiv and Philip Morris before the open, and IBM, Texas Instruments and Tesla after the close.

As I've said before, earnings season is always an exciting time since stocks typically go up during earnings season. And that's yet another reason why the market seems unfazed by the recent disappointment that a longer peace-deal has yet to be secured.

See you tomorrow,