The market movement is primarily driven by the rapid evaporation of a major geopolitical risk premium. The closure of the Strait of Hormuz had revived the specter of a global energy shock, with immediate implications for oil prices, inflation and growth expectations. Its reopening, following the 2-week ceasefire with Iran, has mechanically triggered a reversal: a move toward normalization.

There is no need to highlight the history of the Strait of Hormuz's importance; the web, newspapers, and social media are saturated with experts who have explained it from every possible angle. The upheaval following the 15-day truce agreed upon last night between Washington and Tehran is directly reflected in sector performance.

Tourism: An obvious play

Airlines and tourism stocks are one of the main beneficiaries. Since their business models are heavily dependent on fuel costs, the expected easing of oil prices translates into an immediate improvement in margin outlooks. This is bolstered by the return of better visibility on international flows, supporting demand expectations. In morning trading, Air France-KLM is up 14%, tour operator TUI AG has gained 11%, and Accor is up 8%. It is a logical trend that the market has clearly grasped.

Cyclical industry at large

Cyclical industrial stocks are also advancing. They had been penalized by the prospect of an energy shock capable of weighing on global activity. The reduction in the recession risk and the stabilization of energy costs allow the market to price in a more orderly growth scenario, favoring players exposed to investment and production. In the construction sector, Saint-Gobain, Buzzi, and Heidelberg Materials are gaining 9% or more. In the automotive sector, Volvo Cars, Continental, Renault, and Stellantis are up over 7%. Also of note is the stellar performance of engine manufacturers Safran (+11%) and Rolls-Royce (+9%), which benefit doubly from the cyclicality of activity and the improved fortunes of airlines.

Banking sensitive to normalization

The banking sector is also capitalizing on this shift. The disappearance of a tail risk reduces concerns regarding a rapid deterioration in credit quality and generalized financial stress. Investors are discounting the probability of a crisis scenario, which supports sector valuations. Institutions with exposure to market activities are catching a strong tailwind (Société Générale +9%, Commerzbank +9%, Barclays +8%). Highly leveraged players, such as Greek banks Piraeus Bank and Eurobank, are benefiting even more, with gains exceeding 15%.

Tech and commodities in fine form

In industrial technology and semiconductors, the logic is similar. The normalization of energy and logistics conditions restores visibility to supply chains and capital expenditures. The market anticipates a less constrained environment for industrial activity. Soitec (supported by a Jefferies note in parallel) is up 10%, Infineon 9% and Schneider 8%.

Finally, commodity-related stocks are benefiting from a more indirect effect. They had suffered from rising recession fears. The receding of these concerns favors a repositioning into cyclical assets sensitive to global demand. This includes steelmakers (Salzgitter +19%, ArcelorMittal +11%...), industrial miners (Antofagasta +12%, Anglo American +10%), and even gold and silver miners (Fresnillo +9%).

Oil and fertilizers under heavy pressure

On the downside, the sacrificial lambs are easy to identify: woe to the energy players, with Maurel (-13%), Equinor (-12%), BP Plc, and TotalEnergies (-6%). The drop in crude prices will eat into their substantial future profits. Also featured are fertilizer players (K+S and Yara losing over 10%), as they had been benefiting from shortages that guaranteed opulent margins. Defensive plays (Orange, -1.5% or RWE, -1.5%) are missing the rebound but limiting their losses: investors know that the feast may not last forever.