U.S. stocks indicated a remarkable calm heading into the opening press conference for new Federal Reserve Chairman Kevin Warsh, who is likely to establish a new style of speaking to the stock market and the media while recalibrating some of the central bank's key reaction functions.
Equity futures indicated a positive start to the trading day, building on a recent rally that has the S&P 500 within touching distance of its all-time high and has added around 3.4% to the tech-focused Nasdaq Composite.
Global oil prices, too, were moving swiftly to adjust to the new reality of a cease-fire agreement in the Gulf, with Brent crude dipping below $80 a barrel in overnight trading, extending its five-day decline to around 16%.
More interestingly, however, is the muted level of the market's benchmark volatility gauge, the Cboe Group's VIX index, which is holding near to the lowest levels since early January.
At around 16.36, the VIX suggests daily swings of around 1.02%, or 76 points, for the S&P 500 over the next month, down sharply from the 124- point swings the index was indicating when markets began their long second-quarter rally at the end of March.
The muted VIX reading, alongside the lowest Treasury bond yields in a month, and the big slump in crude prices, gives Warsh one of the smoothest opening day press events since Janet Yellen's Fed debut in 2014, when the index was trading around the 15-point mark.
That, in some ways, belies the changes he's likely to bring to the Fed, including new measures to track inflation, a smaller balance sheet, and a more opaque tactic of offering forward guidance on rate changes.
It also doesn't account for the political pressure he's likely to face from President Donald Trump, who appointed him with the expressed understanding that he would lower interest rates and deliver an election-winning economy with a record high stock market.
"Wednesday's meeting is arguably the most important one in recent memory, since investors will now have to get used to the new Fed chair's communication style," said James Demmert, chief investment officer at New York-based Main Street Research.
"Warsh is likely going to take his time and monitor how inflation responds to the recent drop in oil prices," he added. "But wouldn't be surprised to see him mention accelerating economic growth and the potential for higher rates going forward, even with the political pressure he's facing."
The falling VIX levels, and the recent snapback in stocks, doesn't appear to suggest concern with the vague outlines of a U.S.-Iran deal that is expected to be inked on Friday.
While no text of the agreement has been released, media reports have suggested the 14-point "memorandum of understanding" allows for Iran to resume crude exports and reopen the Strait of Hormuz. The agreement also creates an economic development fund that could deliver at least $300 billion to Tehran over the coming months.
But the chances of a collapse remain high, given the agreement leaves the harder discussions, such as the fate of Iran's nuclear program, alive for at least the next 60 days.
Stock markets haven't been feeling that risk, however, as the lowest oil prices in three months, a muted VIX reading, and falling Treasury yields have stocks primed for a quick and decisive return to record highs into the end of a powerful second-quarter rally.
Curiously, though, that leaves a lot of the market's near-term risks in the hands of a man whose comments on interest rates have gone from hawkish to dovish in recent years, and credited the progress in inflation to Trump's policies last October, Jjust months before inflation began to spike to the highest levels in four years.
"Fed independence means everything to me," he told the Senate Banking Committee's confirmation hearing in April.