It is by now a familiar Wall Street two-step: Stocks stumble in the morning and mostly recover by the end of the day after President Donald Trump says something that's viewed as reassuring about the Iran war.

Why it matters: Investors are jumping at any sign of an end to the Iran war — now in its third week and far longer than they initially predicted.

• They're clinging to the Trump put, the idea that the president will reverse himself if the markets react badly to White House policy.
• It's a concept with legs even in a war — a situation that is not unilateral. Even if Trump wants this to end, Iran has to stand down, too.

Catch up quick: Oil prices retreated from their highs yesterday, and stocks pared their losses after Trump said that he wasn't planning on sending ground troops into the Middle East.

• Investors were also apparently mollified by comments from Israeli Prime Minister Benjamin Netanyahu, who said that Iran no longer has the capacity to enrich uranium or make ballistic missiles.
• It was taken as a signal that some of the war's aims had been achieved.

What they're saying: "Albeit minor, this is the first sign of de-escalation that may lead to others in the future," Jim Caron, chief investment officer at Morgan Stanley Investment Management, tells Axios.

• "It's too soon to say for sure, but if there is willingness for both sides to draw bright lines around what can and cannot be attacked is a new data point for the market to assess."
• "Any little positive thing can really generate a big move in the market," says Jose Torres, senior economist at Interactive Brokers.
• "Traders are waiting for the Trump put to kick in. This is the TACO trade. Trump always chickens out."

Yes, but: This morning, Axios' Barak Ravid is reporting that the White House is weighing plans for a "dramatic escalation" to the war, which could include boots on the ground.

The big picture: While investors may be hopeful, it has still been a rough year so far.

• After reaching an all-time high, the S&P 500 stumbled on anxiety that AI would eat the software market, dragging down the tech stocks that had run up for the past few years.
• And then there's the private credit fear.
• The war hit on top of that, bringing with it a massive oil shock and fears of inflation and slower economic growth.

"We still see complacency," per a note from JPMorgan global equity strategy analysts Wednesday. They say the market is pricing in a "quick end to the war."

• "This is a high-risk assumption."

By the numbers: Though the S&P 500 closed down just 0.27% Thursday, it is now more than 5% off its all-time high.

• The price of Brent crude oil is up almost 50% from where it was before the war.
• And investor sentiment isn't exactly great: It deteriorated over just the past day after the news Wednesday night of tit-for-tat attacks on energy facilities in Iran and the UAE, Caron says.

The bottom line: No one really knows what exactly drives markets up or down — investor hopium could prove prescient.

The White House is now considering lifting sanctions on Iranian oil, less than a week after temporarily relaxing restrictions on Russian oil.

Why it matters: Lifting restrictions on Iranian oil would be a remarkable next step — as it was something the Iranians were asking for in negotiations last year and has been a cornerstone of U.S. policy for years.

The big picture: Economic sanctions have been America's go-to weapon for a while, but their era seems to be ending.

Between the lines: The administration is pulling out all the stops — even easing up an economic threat to its enemy in war — to keep oil prices down.

• That helps explain what we discussed at the top of the newsletter, giving investors reason to hope the administration won't let things in the market spiral.

Zoom in: "In the coming days, we may unsanction the Iranian oil that's on the water," Bessent told Fox Business Thursday morning.

• He said that would make up about 140 million barrels — about 10 days to two weeks of supply.
• "In essence, we'd be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign. So, we have lots of levers."

What to watch: The administration argues that lifting Iranian sanctions would actually be good for the U.S. and bad for Iran and China — as oil intended for China flows to other Asian countries in desperate need of energy.

• "A potential waiver could accelerate the diversion of oil already destined for China into global markets more broadly," a person familiar with the situation who was not authorized to speak publicly told Axios.

Zoom out: The White House appears to be conceding something in war that it was unwilling to give in peace, says Nicholas Mulder, a sanctions expert and professor at Cornell University.

• "The U.S. has to dial back sanctions to offset the second-order effect of war," he says. "It speaks to the instability of the situation."

The bottom line: For a long time, economic sanctions were a way to avoid open war, Mulder wrote in a recent Financial Times piece.

• Now, "this claim no longer seems convincing."

Two economic trends are colliding: One old — the work-from-home boom — and the newer explosion in AI infrastructure spending.

• The result is the chart above: annualized spending on data center construction outpacing that of traditional offices in December 2025 for the first time ever, according to the latest available Census Bureau data.