April 13, 2026

In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

Warren Buffett

A point to remember and so far, we have seen played out in real time. But first here are the numbers. The S&P 500 finished the week up 3.4%, The Dow Jones Industrial Average gained 3.0%, the Nasdaq led up 4.3%. Internationally the FTSE 100 gained 1.6%, and the MSCI-EAFE added 4.5%. The 2-Year Treasury paid 3.81% and the 10-Year yield was 4.35%

Last week, financial markets showed a notable rebound amid ongoing geopolitical tensions from the U.S.-Iran conflict, though volatility persisted. U.S. stocks broke a five-week losing streak with a solid relief rally, driven primarily by optimism around a temporary two-week ceasefire announcement in the U.S.-Iran conflict (announced mid-week, around April 7–8, contingent on Iran reopening the Strait of Hormuz). This eased some oil price pressures and boosted risk appetite, especially in tech and communication services. Small caps also had a good week with the Russell 2000 up 4.3%. What drove the market was Hopes for de-escalation in the Middle East, a stronger-than-expected March jobs report, and resilient corporate earnings. Sectors like information technology, communication services, and industrials led gains; energy was mixed as oil prices spiked earlier in the conflict but eased with ceasefire news. Gold continued rising as a hedge. After a good week of recovery (back to the post attack numbers) the fragile truce and the Iranians slow walking the opening of the Strait of Hormuz left last Friday close choppy ahead of U.S.-Iran talks. S&P 500 fell slightly 0.1%, Dow dropped 0.6%, Nasdaq edged up 0.4%. Year-to-date, major indexes remained in negative territory due to prior losses from the conflict and earlier inflation concerns. Investor sentiment improved on the ceasefire news (VIX fell below 20), but caution will remained due to the temporary nature of the truce and ongoing weekend talks.

In economic news, data releases highlighted a resilient but slowing U.S. economy overshadowed by geopolitical risks and inflation worries from elevated energy prices.

The labor market March non-farm payrolls surged up 178,000 (well above expectations of 65,000, with unemployment ticking down to 4.3%. February figures were revised lower to -133,000. “JOLTS” meaning job openings, fell to 6.88 million. This was viewed as a positive reversal after weather/strike effects in prior months, though the six-month average remained soft. In other good news, retail sales rose 0.6% month over month. Manufacturing activity showed improvement (ISM indices higher). However, earlier 4th Quarter 2025 GDP was revised down significantly to 0.7% annualized in some reports, but Q1 2026 tracking estimates pointed to a rebound of 2.0–2.7%.

In a broader context, The Iran conflict introduced supply shock risks (oil prices had surged sharply earlier), shifting focus from potential Fed rate cuts (now priced out for 2026) to higher near-term inflation. No major new tariffs or fiscal shifts dominated headlines, but uncertainty lingered. It is clear that the Iranian strategy is to officiate and delay hoping US political pressure will work in their favor, but it seems that this President will have none of it and will push on and reengage militarily to ensure the regime in Iran no longer effect world commerce or militarily threaten the region (which why the gulf state are pushing to “finish the job”).  It is important to remember this situation will, one way or another, resolve itself and the flow of oil will return.  Prices and inflation are expected to rapidly drop once the conflict concludes or at least has a definitive direction.

In the mortgage and housing market, rates eased modestly week-over-week amid lower Treasury yields following ceasefire hopes, providing slight relief during the spring homebuying season. The 30-year fixed average hovered in the 6.2–6.5% range (e.g., 6.50% early in the week per some daily trackers, with weekly Freddie Mac averages reported around 6.37–6.46% prior to any final drop). Rates had climbed in March due to the conflict but stabilized or declined slightly. 15-year fixed rates were in the mid-5% to low-6% range. Housing activity with no major new sales reports (e.g., existing homes) landed last week, earlier data showed modest gains in permits/starts, rising inventory, and cooling price growth. Affordability remained challenged by rates above 6% and economic uncertainty, with purchase applications softening. The market stayed cautious overall.

One final point, “Consumer Sentiment” deteriorated sharply. The University of Michigan preliminary April index plunged to a record low of 47.6 (down 11% from March’s 53.3 and 9% year-over-year)—the lowest reading in post-WWII history. Current conditions and expectations indexes both fell double digits. One-year inflation expectations jumped to 4.8% (biggest one-month spike in years). This reflected broad frustration with energy-driven price spikes and war uncertainty (most responses pre-ceasefire announcement). No surprise with the drumbeat of negative news by the US media and the democratic party and the return to the Biden era gas prices (oh how quickly we forget). However, Market/investor sentiment was more mixed-to-positive by week’s end due to the equity rally and ceasefire news, though underlying caution persisted around prolonged geopolitical risks and inflation. My point is consumer sentiment is a lagging indicator almost as volatile as the market itself, so though it is a significant indicator of how people are feeling, it can quickly recover with good results or good news on the economic front.

As our clients received their quarterly reports, they found our defensive posture with value, small cap and international weights help significantly limit the damage of the past few months. Overall, the week brought relief from de-escalation hopes and solid jobs data, but the Iran conflict remained the dominant theme, fueling inflation fears and record-low consumer confidence. Markets were optimistic but volatile, with the ceasefire described as fragile. Data and events next week (including any updates from talks) will likely influence whether the rebound holds.

Mike