The Nasdaq Composite stormed higher on Thursday, leading a broad relief rally after President Donald Trump announced a two-week ceasefire with Iran.
The tech-heavy index jumped nearly 5 percent, outpacing the S&P 500’s 3.8 percent gain and the Dow’s 3.4 percent advance. For the first time since the conflict erupted, the Nasdaq has climbed back above its pre-war levels.
Invesco’s momentum technology ETF notched a fresh record high, fueled by a wave of buying in AI-related names and memory chip stocks that carry heavy weight in the fund.
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But one of Wall Street’s most respected voices on market structure and macro risks isn’t impressed. Marko Kolanovic, who spent years as JPMorgan’s chief quantitative strategist before stepping back from the bank, took to X to call the move exactly what he thinks it is: a classic overreaction destined to unwind.
“The biggest gain ever on nothing (fake deal, Hormuz closed). So likely the biggest fade too …” he wrote, replying to a chart tracking the momentum ETF’s surge.
Kolanovic didn’t stop there. He warned that momentum tech “will crash if (when) talks yield nothing.” And as fresh signs of fragility emerged, he posed a blunt question: “who, apart from markets, still thinks negotiations are viable with this condition?”
The condition in question has stirred broader concern. Iranian parliament speaker Mohammad Bagher Ghalibaf made clear that any serious negotiations must include a ceasefire in Lebanon and the release of Iran’s blocked assets. Trump, meanwhile, posted that Iran “better not be” charging fees to tankers moving through the Strait of Hormuz, insisting the current arrangement fell short of the agreement he announced.
U.S. negotiators, led by Vice President JD Vance, are still scheduled to sit down with their Iranian counterparts in person on Saturday. But the gap between the two sides’ public positions is widening by the hour.
Kolanovic’s skepticism carries weight because he has spent his career dissecting how markets price geopolitical risk — and how quickly sentiment can flip when reality intrudes. He has long argued that the kind of short-term relief rallies seen after headline ceasefires often prove unsustainable when underlying disputes remain unresolved.
This one, he believes, fits the pattern perfectly: a market desperate for de-escalation seized on Trump’s announcement while largely ignoring the fine print.
Memory chip stocks, which dominate the momentum ETF, are especially exposed in Kolanovic’s view. The sector has ridden the AI infrastructure boom for months, with investors betting that insatiable demand for high-bandwidth memory will keep capital spending on data centers red-hot. But those same chips are highly sensitive to any renewed supply-chain jitters or broader risk-off moves.
A breakdown in Saturday’s talks could quickly remind traders that geopolitics still matters — and that the Strait of Hormuz remains a chokepoint for global energy flows.
The rally itself was textbook relief trading: systematic funds rebalanced, short sellers covered, and retail piled in. Yet the speed and magnitude of the move, the largest seven-day gain for the momentum ETF in two decades, struck many seasoned traders as excessive given the ceasefire’s obvious fragility.
Oil prices, which had spiked during the fighting, eased only modestly, and defense stocks held most of their gains, suggesting the market isn’t fully convinced the threat has passed.
For now, the disconnect between Wall Street’s pricing and the on-the-ground reality in the Middle East is exactly what Kolanovic is highlighting. Markets are betting on diplomacy. He is betting that the diplomacy has a long way to go — and that when the optimism fades, the correction in the most crowded tech trades could be swift and painful.
The outcome of Saturday’s meeting will likely decide if he is right.