The market kicked off the week on a stronger footing. The S&P 500 (SPY) broke a three-day losing streak, helped by a sharp pullback in oil prices and dovish signals from the Federal Reserve. West Texas Intermediate crude slipped back to $73 a barrel as fears of an immediate disruption in Middle East oil supply eased. Despite weekend headlines involving Israeli strikes and Iran’s missile retaliation, Iranian oil exports through the Strait of Hormuz have shown no signs of slowingin fact, flows may have increased. Analysts noted that without a broad regional escalation, the impact on physical oil markets could stay contained.

At the same time, bond markets caught a bid after Fed Vice Chair for Supervision Michelle Bowman said she’s open to cutting interest rates as soon as July. Bowman cited progress on inflation and potential risks to the labor market as key reasons. Her comments added momentum to existing bets on a September rate cut, with investors now viewing July as a live meeting. Treasury yields edged lower, as traders positioned for the Fed to start unwinding policy tightening sooner than expected. Bowman’s remarks came just ahead of the Fed’s preferred inflation gauge later this week, which could shape expectations further.

Meanwhile, equity strategists at Morgan Stanley argued that markets tend to bounce back quickly from geopolitical scares. In past episodes, the S&P 500 has gained 2% after one month, 3% after three months, and 9% over a year. The takeaway: barring a major oil supply shock, volatility may prove short-lived. Stocks like Tesla (TSLA), Northern Trust (NASDAQ:NTRS), and Estee Lauder (NYSE:EL) were among the notable movers, as investors repositioned around a possible Fed pivot, stable economic data, and a cooling energy narrative.

This article first appeared on GuruFocus.