Market Commentary

For the week ending 4/3/2026

 

U.S. equity markets snapped a five-week losing streak last Thursday, and all three major indexes ended the holiday-shortened week significantly higher.

The rebound capped a dismal March that saw geopolitical concerns drive U.S. equity markets significantly down from the all-time highs they set earlier this year. The ongoing war in Iran, its resultant energy prices and the see-sawing messages from both President Trump and Iranian officials led to some extreme volatility throughout the week. The markets enjoyed impressive rallies on Tuesday and Wednesday, but faced a sharp early rout on Thursday morning, before staging a recovery.

The week started optimistically after President Trump said that Iran had conceded most of the demands in the 15-point peace proposal that the U.S. set forth. Additionally, President Trump included threats to destroy Iran’s energy infrastructure if a deal was not struck soon. Stocks rallied Tuesday, capturing its biggest single-day gain since last May, as leaders from both the U.S. and Iran signaled a willingness to end the ongoing conflict. Tuesday morning the Wall Street Journal reported that President Trump told aides he is willing to end U.S. military operations against Iran even if the Strait of Hormuz remains closed, as reopening it could extend the conflict beyond the 4-6-week timeline.

Meanwhile, Iranian state media said the country’s president spoke with the European Council. Iran reportedly said it was “prepared to end the war” with guarantees against further attacks, a notable shift from just days prior, when it had rejected ceasefire proposals outright. Markets continued to rise Wednesday following a report that President Trump told aides that the U.S. will withdraw from the conflict in two to three weeks, even if a deal has not been struck. However, following that report, President Trump threatened continued bombing of Iran’s infrastructure if the Strait of Hormuz was not opened. Wednesday’s strength was largely driven by geopolitical optimism, though the U.S. and Iran still appear to be far apart on negotiations. Attention then turned to President Trump’s address Wednesday night for further clarity on the path forward. The stock market had a choppy morning Thursday, starting down 1% or more as this week’s optimism faded. President Trump’s address failed to ease concerns about the possibility of an extended conflict. He said “we’re going to hit them extremely hard over the next two to three weeks,” listing potential targets including power plants and oil infrastructure. The path to end the war remains unclear. Oil prices moved sharply higher in response, with crude oil futures settling Thursday session 11% higher at $111.48 per barrel. However, the equity markets rebounded sharply to flatline levels Thursday following a report that Iran and Oman are drafting a proposal related to traffic through the Strait of Hormuz.

On the economic front, last week’s reports offered a complex picture of the U.S. economy. March consumer confidence improved slightly, though with a notably pessimistic tone. February retail sales were ahead of consensus. Overall headline February retail sales rose 0.6% m/m vs consensus for 0.5% gain and January’s 0.1% decline. This was the highest headline retails sales since last July. A stronger-than-expected retail sales report reinforced the resilient consumer narrative, however that data was gathered before the war with Iran began, and many analysts are skeptical that strength will continue in March’s data.

The labor market continued to show impressive resilience. March ADP private payrolls showed 62,000 jobs were added, ahead of consensus for 40,000 jobs. This report noted steady overall hiring, but job growth continues to be concentrated in certain industries, particularly education and health services. March’s US nonfarm payrolls report was much better than expected, showing 178,000 jobs added vs 60,000 expected. Additionally, the unemployment rate dipped slightly to 4.3% from 4.4% the prior month.

Ultimately, the major averages finished with solid weekly gains, which was largely a result of a short-term improvement in sentiment regarding geopolitical hostilities and a reaction to oversold conditions. Still, uncertainty around the situation in Iran and elevated oil prices kept the market on cautious footing heading into the long weekend. The stock market was closed for the Good Friday holiday.

Looking ahead, this week will feature some important economic data, including key inflation readings.

For the week, the Dow jumped 3% to 46,505. The S&P 500 climbed 3.4% to 6,583 and the Nasdaq rose 4.4% to 21,879.

Oil climbed 11.9% to $111.54/bbl. Gold rose 3.5% to $4,680/oz. and the yield on the 10-year Treasury slid to 4.31%.

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