WEEKLY MARKET RECAP

The Big Picture

A fragile ceasefire between the United States and Iran dominated markets this week, triggering the sharpest single-day oil price decline since 2020, a powerful equity rally, and a wave of repositioning across every major asset class. For the week, the S&P 500 gained 3.6% to close at 6,816.89, the Nasdaq Composite surged 4.7% to 22,902.89, the Dow Jones Industrial Average rose 3.0% to 47,916.57, and the Russell 2000 advanced roughly 2.9% to 2,636.31. It was the best weekly performance for the S&P 500 and Nasdaq since November 2025.

The VIX (the CBOE Volatility Index, a widely followed gauge of expected market turbulence over the next 30 days) settled at 19.49 on Friday, down sharply from the elevated levels that had persisted during the peak of the Iran conflict. While still above the long-run average near 15, the move lower reflects a meaningful de-escalation in fear — even if uncertainty has not been fully resolved.

The week followed a familiar pattern for 2026: geopolitics set the tone, and everything else — inflation data, rate expectations, sector rotation — orbited around it. The ceasefire announcement on Tuesday evening sent oil plunging and equities soaring on Wednesday, but by Friday, cracks in the agreement were already visible. The S&P 500 slipped 0.11% on Friday as investors digested a hotter-than-expected headline CPI print and growing doubts about whether Iran would actually reopen the Strait of Hormuz as promised. The result: a strong week on paper, but one that ends with more questions than answers heading into earnings season.

Market Snapshot

• S&P 500: 6,816.89 | +3.6% weekly | Prior week ~6,581 | Bullish momentum, best week since November

• Dow Jones Industrial Average: 47,916.57 | +3.0% weekly | Prior week ~46,522 | Snapped multi-week decline

• Nasdaq Composite: 22,902.89 | +4.7% weekly | Prior week ~21,876 | Semiconductor strength led gains

• Russell 2000: 2,636.31 | +~2.9% weekly | Prior week ~2,562 | Small caps joined the risk-on rally

• VIX: 19.49 | Down sharply on the week | Prior week ~28+ | De-escalation in implied volatility

• 10-Year Treasury Yield: 4.31% | Roughly flat | Prior week ~4.35% | Modest decline on ceasefire relief

• 30-Year Treasury Yield: 4.91% | Stable | Long end held firm amid inflation concerns

• DXY (U.S. Dollar Index): 98.70 | -0.13% Friday | Dollar weakness persisted on risk-on flows

• WTI Crude Oil: ~$95.50/bbl | Down ~16% from Tuesday highs | Largest single-day decline since 2020

• Brent Crude Oil: ~$96.00/bbl | Down ~13% on the week | Still elevated vs. pre-conflict levels (~$75)

• Gold: ~$4,700/oz | Steady, third consecutive weekly gain | Safe-haven demand persists

Theme #1: The Ceasefire That Changed Everything — And Nothing

The dominant narrative of the week was the U.S.-Iran ceasefire announced late Tuesday evening. President Trump, who had threatened to destroy Iran’s power plants and bridges if the Strait of Hormuz was not reopened by 8 p.m. ET on Tuesday, accepted a two-week ceasefire proposal mediated by Pakistan. The terms were straightforward in principle: Iran would reopen the Strait of Hormuz to commercial shipping, and the U.S. would suspend military operations for 14 days.

Markets responded with euphoria. On Wednesday, the Dow surged over 1,325 points, the S&P 500 jumped 2.5%, the Nasdaq rallied 2.8%, and the Russell 2000 leapt 2.9%. Global markets joined in — Japan’s Nikkei 225 soared over 5%, Germany’s DAX surged more than 5%, and Europe’s Stoxx 600 climbed 3.8%. WTI crude collapsed 16.4% in a single session to close at $94.41, its largest one-day decline since 2020. Brent crude fell 13.3% to $94.75.

But the relief proved fragile. By Thursday, it became clear that the Strait of Hormuz remained effectively closed, with Iran limiting transit and reportedly charging tolls exceeding $1 million per vessel. Israeli strikes on Lebanon further strained the ceasefire framework, and Iran briefly re-closed the strait in response. By Friday, the initial euphoria had faded — the S&P 500 gave back 0.11% and the Dow slipped 0.56% as investors recalibrated expectations. Oil prices stabilized around $95-96, well below the week’s highs near $117 but still far above pre-conflict levels near $75.

The takeaway: the ceasefire bought time, but it did not buy certainty. The two-week window expires around April 21-22, and the path to a durable resolution remains unclear. Markets are pricing in cautious optimism, but the risk premium has not been fully unwound.

Theme #2: Inflation Flashes a Split Signal — Headline Hot, Core Cool

The March CPI (Consumer Price Index, a key measure of inflation tracking changes in the prices consumers pay for a basket of goods and services) report, released Friday morning, delivered a number that looked alarming on the surface but told a more nuanced story underneath.

Headline CPI rose 0.9% month-over-month and 3.3% year-over-year — the highest annual reading since April 2024, up sharply from 2.4% in February. The culprit was obvious: gasoline prices surged 21.2% in March, accounting for nearly three-quarters of the headline increase. Energy costs overall jumped 10.9% year-over-year, a direct consequence of the Iran conflict and the Strait of Hormuz closure that sent oil prices skyrocketing during March.

But strip out the volatile food and energy components, and the picture changes dramatically. Core CPI rose just 0.2% month-over-month and 2.6% year-over-year, coming in below consensus expectations. Shelter costs — the most persistent driver of underlying inflation over the past two years — increased just 0.3% monthly and 3.0% annually, tied for the lowest level since August 2021.

The market’s reaction was telling: after an initial wobble, equities largely shrugged off the headline number and focused on the core reading. The logic is sound — if the ceasefire holds and oil prices continue to normalize, the energy-driven headline spike will prove transitory (a word the Fed used prematurely in 2021, but which may actually apply this time). If it doesn’t hold, however, and oil remains above $90-100, the headline inflation problem will persist and complicate the Fed’s path forward.

Theme #3: The Fed’s Waiting Game Gets More Complicated

The Federal Reserve finds itself in an uncomfortable position. The March FOMC meeting (held March 18-19) resulted in no rate change, with officials projecting just one 25-basis-point cut for all of 2026. The next meeting is April 28-29, and the market is pricing virtually zero chance of a move.

The ceasefire initially revived hopes for rate cuts. If oil prices normalize and headline inflation fades, the Fed would have room to ease later this year. Fed funds futures briefly re-priced to reflect increased odds of a cut in the second half of 2026.

But Friday’s CPI report muddied the waters. Even though core inflation was well-behaved, the 3.3% headline number creates a political and communication challenge for a Fed that spent years fighting the perception that it was behind the curve. Cutting rates while headline inflation is at a two-year high — even if driven entirely by energy — would invite criticism.

The 10-Year Treasury yield ended the week at 4.31%, roughly flat, while the 30-year held at 4.91%. The 2-year yield settled at 3.81%, maintaining the positive slope in the yield curve. The bond market’s message is clear: rates are going to stay higher for longer unless the geopolitical picture changes materially.

For now, the weight of evidence suggests the Fed will hold steady at the April meeting and watch developments closely. The ceasefire expiration date (around April 21-22) falls just one week before the FOMC decision — the sequencing could not be more consequential.

Theme #4: Earnings Season Arrives at a Crossroads

Q1 2026 earnings season officially kicks off next week with the major U.S. banks, and the timing could not be more significant. The S&P 500 is forecast to deliver 13.2% earnings growth for the quarter, with all 11 GICS sectors expected to report positive revenue growth. Technology, Communication Services, and Financials are expected to lead.

The banks will set the tone. Goldman Sachs (GS) reports Monday, April 13, with particular focus on its investment banking revenue, which now accounts for nearly 20% of total revenue. Goldman enters the quarter with an announced M&A pipeline estimated at $1.6 trillion — a direct proxy for the health of global deal-making activity.

JPMorgan Chase (JPM) and Bank of America (BAC) report Tuesday, April 14. JPMorgan’s consensus EPS (earnings per share, the portion of a company’s profit allocated to each outstanding share of common stock) estimate sits between $5.38 and $5.50 on revenue of approximately $48.5 billion. Analysts will be watching NII (net interest income, the difference between what a bank earns on loans and what it pays on deposits) closely, expected at $25.6 billion, as well as the integration of the Apple Card portfolio, which JPMorgan recently acquired with an associated $2.2 billion reserve build.

The key question for earnings season is whether corporate America can deliver results strong enough to justify current valuations against a backdrop of elevated oil prices, sticky headline inflation, and geopolitical uncertainty. The early reports from the banks will provide critical data points on consumer credit health, lending activity, and capital markets momentum.

Sector Scorecard

• Information Technology (XLK): Led the week, riding semiconductor strength. Nvidia (NVDA) and Broadcom (AVGO) drove Nasdaq outperformance. The ceasefire-driven risk-on rotation favored growth and tech.

• Financials (XLF): Positioned well heading into bank earnings. M&A revival narrative boosted sentiment. Yield curve steepness supports NII outlook.

• Consumer Discretionary (XLY): Benefited from lower oil prices boosting consumer spending expectations. Gasoline relief, if sustained, directly supports discretionary spending.

• Energy (XLE): The week’s biggest laggard as oil prices collapsed on the ceasefire. Despite the sharp pullback, XLE remains up over 22% YTD — far and away the best-performing sector in 2026. The question is whether the ceasefire unwinds the trade.

• Industrials (XLI): Modest gains on global trade normalization hopes. Strait of Hormuz reopening (if it materializes) would ease shipping cost pressures.

• Health Care (XLV): Middling performance, relatively insulated from the week’s dominant geopolitical themes.

• Communication Services (XLC): Solid gains, benefiting from the broader tech/growth rally and positive earnings growth expectations.

• Consumer Staples (XLP): Underperformed as the risk-on rotation favored cyclicals over defensives. Typical behavior in a relief rally.

• Utilities (XLU): Lagged as investors rotated out of defensive positioning. Lower oil prices reduce the energy cost overhang but the risk-off trade unwound.

• Materials (XLB): Mixed performance. Lower energy input costs are a positive, but global demand uncertainty lingers.

• Real Estate (XLRE): Modest moves. The 10-year yield holding at 4.31% continues to pressure rate-sensitive sectors.

The Week Ahead

• Monday, April 13: Goldman Sachs (GS) Q1 earnings — the first major bank report of the season. M&A pipeline health will be closely watched.

• Tuesday, April 14: JPMorgan Chase (JPM) and Bank of America (BAC) Q1 earnings. PPI (Producer Price Index) data release — prior headline was 3.4% YoY. Pipeline inflation pressures remain a focus.

• Wednesday, April 15: Retail sales and industrial production data. These will provide a read on consumer resilience and manufacturing activity amid elevated energy costs.

• Thursday, April 16: Housing starts data. China Q1 GDP (consensus 4.8% YoY) — a key signal for global growth expectations.

• Ongoing: Iran ceasefire implementation watch — the two-week window expires around April 21-22. Any escalation or de-escalation will move oil and risk assets.

• April 28-29: FOMC meeting — no rate change expected, but the statement and press conference will be scrutinized for any shift in tone given the inflation and geopolitical backdrop.

The Takeaway

This was a week of relief, not resolution. The U.S.-Iran ceasefire triggered a powerful risk rally that lifted equities to their best weekly performance in months, but the durability of the agreement is deeply uncertain. Oil prices have pulled back sharply from their wartime peaks but remain elevated at $95-96, well above the $75 levels that prevailed before the conflict. The March CPI report delivered a split verdict — headline inflation is running hot at 3.3%, but core inflation at 2.6% suggests the underlying price pressures are manageable if energy normalizes.

The single most consequential variable to watch in the coming weeks is the fate of the ceasefire. If the Strait of Hormuz genuinely reopens and oil continues to normalize toward $80-85, markets have room to rally further, the Fed gets cover to consider easing later this year, and the inflation scare fades. If the ceasefire collapses and oil re-tests $110+, the script reverses — inflation expectations re-anchor higher, rate cuts get pushed further out, and the earnings season narrative shifts from growth to margin compression.

As always, the weight of evidence tilts cautiously toward the positive side for now — the ceasefire exists, core inflation is contained, and earnings growth estimates remain robust at 13.2%. But the margin for error is thin, and conditions can shift rapidly. Size positions appropriately for an environment where the macro picture could change meaningfully within days.

Disclaimer: This newsletter is for educational and informational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities. The author is not a registered investment advisor, broker-dealer, or financial planner. All analysis represents the author’s interpretation of publicly available data and may contain errors. Past performance does not guarantee future results. Markets involve substantial risk, including the possible loss of principal. Always do your own research and consult with a qualified financial professional before making any investment decisions.