Ceasefire Sparks Best Week for Stocks Since November

U.S. equity markets posted their second consecutive weekly gain — and their best week since November — as a fragile two-week ceasefire between the U.S. and Iran triggered a powerful relief rally. The S&P 500 gained +3.56% for the week, closing at 6,816.89, and is now down just 0.42% year-to-date. The Nasdaq surged +4.68%, its best weekly gain since November, while the Dow added +3.04%. The Russell 2000 outperformed all major indexes, jumping +3.97% and is now the clear YTD leader at +5.06%.

The catalyst arrived Wednesday when President Trump announced a two-week suspension of planned strikes on Iranian infrastructure, contingent on Iran agreeing to a full reopening of the Strait of Hormuz. The S&P 500 soared +2.51% on the day — its best single session of 2026. WTI crude plunged more than 16%, its biggest single-day drop since April 2020, settling near $94/barrel. Airlines, retailers, and transportation stocks led the rally as investors priced in easing fuel costs.

CPI Surges on Energy Shock — But Core Stays Cool

The Bureau of Labor Statistics confirmed Friday what markets had anticipated. Headline CPI surged to 3.3% year-over-year — the highest since May 2024 — driven by a 10.9% monthly spike in energy costs, the largest jump in gasoline prices since 1967. The monthly gain of 0.9% was in line with the Dow Jones consensus. However, core CPI — excluding food and energy — rose just 0.2% for the month and 2.6% year-over-year, both one-tenth below forecast. The sharp divergence between headline and core gives the Fed analytical cover to look through the energy spike and remain on a gradual easing path.

Consumer Sentiment Hits Record Low

The University of Michigan’s Consumer Sentiment Index plummeted 11% to a preliminary April reading of 47.6 — a record low in the survey’s 70-plus-year history. Critically, 98% of interviews were completed before the April 7 ceasefire, meaning the index fully reflects war-era anxiety. Year-ahead inflation expectations surged from 3.8% to 4.8% — the largest monthly jump in years — while long-run expectations ticked to 3.4%, a level that could concern Fed policymakers regarding inflation credibility.

The dollar fell for the seventh time in eight sessions, closing below 99 — its biggest weekly drop since Liberation Day 2025. The Fed is not scheduled to meet again until April 28–29. Before Friday’s CPI report, markets priced in two rate cuts for 2026; that expectation has since been scaled back to just one, though the cool core reading preserves flexibility for policymakers.

Islamabad Talks, Big Bank Earnings, and Ceasefire Durability

Investors head into the week with a powerful tailwind — two straight weekly gains, a fragile ceasefire, and plunging oil prices — but the durability of that rally hinges entirely on geopolitical outcomes over the weekend. U.S. and Iranian delegations meet in Islamabad, Pakistan on Saturday, April 11 for the first direct talks since the ceasefire. Any breakdown in negotiations or new Strait of Hormuz incident could rapidly reverse the week’s gains. Vice President Vance is leading the U.S. delegation.

Monday, April 13 — Goldman Sachs Leads Bank Earnings

Earnings season kicks into high gear with Goldman Sachs reporting before the open. Investors will scrutinize trading revenue and investment banking activity for signs of how Wall Street’s own exposure to geopolitical volatility played out in Q1. The week is one of the heaviest on the earnings calendar, with major financials dominating the schedule. Existing Home Sales data also releases Monday, providing a read on housing demand at elevated mortgage rates.

Tuesday – Wednesday: Major Bank Earnings Continue

Bank of America, Morgan Stanley, PNC, and ASML all report mid-week. ASML’s semiconductor equipment orders will be watched closely as a proxy for AI infrastructure spending commitments. Retail Sales for March release Wednesday alongside the NY Empire Fed Manufacturing Index — the first consumer spending data point to reflect the full impact of the Iran war and gas price surge on household budgets.

Thursday, April 16 — Netflix, TSM, and Jobless Claims

Taiwan Semiconductor (TSMC) reports before the open — its guidance on AI chip demand will set the tone for the entire tech sector. Netflix reports after the close. Weekly jobless claims will be scrutinized for any first signs of ceasefire-period stabilization in the labor market. The Philly Fed Business Index and Industrial Production data also release Thursday, offering the first regional manufacturing read since the ceasefire.