Return Of The Bad News Bulls

Markets embraced a familiar bad-news-is-good-news setup this week, as softer labor data and lower oil pulled rates lower, reduced Fed tightening urgency, and pushed major indexes to fresh records again. Oil surrendered war-risk premium, with WTI tumbling 9% as Iran-Oman transit talks progressed, though attacks on UAE-linked vessels kept Hormuz flows well below pre-conflict norms again this week. The labor market stumbled again as payrolls fell 23k, prior months were revised down 103k, participation slipped, and wage growth slowed to its lowest since 2021, meaningfully easing Fed pressure.