Market Commentary

For the week ending 4/10/2026

 

Wall Street extended its significant relief rally to seven straight days, fueled by hopes for a ceasefire in the Middle East and mixed but resilient economic data. After five straight weeks of declines, major indexes like the S&P 500 and Nasdaq recorded their two strongest weekly gains of the year during the past two weeks. However, market sentiment remains hesitant given persistent inflation concerns and some fading of the initial optimism regarding a ceasefire agreement with Iran.

Stocks closed with modest gains on Monday and Tuesday, as the markets awaited Iran’s response to Trump’s ultimatum and deadline. Early in the week President Trump reiterated his threats to destroy every power plant and every bridge in Iran, if a deal was not negotiated before his deadline of Tuesday at 8:00 p.m. ET. Tuesday afternoon Pakistan, a key mediator in the negotiations, requested that President Trump extend the deadline for two weeks and that Iran open the Strait of Hormuz for a corresponding period of two weeks. Late Tuesday evening the US and Iran agreed to a two-week ceasefire, causing the stock market to soar more than 2% higher on Wednesday, along with a sharp drop in oil prices from a high of around $115/barrel down to a low of around $94/barrel. The U.S. and Iran held talks this weekend to seek a more permanent end to the war. While the temporary ceasefire sparked a broad relief rally, the situation remains delicate, as the initial agreement seems to be shrouded in confusion and contradictions. Despite the deal, the Strait of Hormuz remained largely closed to tanker traffic and Israel continued strikes against Hezbollah in Lebanon, prompting threats from Iran to abandon the fragile ceasefire agreement that was just reached. However, stocks found their footing midday Thursday following a report that Israeli Prime Minister Benjamin Netanyahu was open to negotiations with Lebanon. Those talks are set to begin this coming week, but Israel has stated that it will continue to launch strikes against Hezbollah in the interim. Still, the headline prompted a decisive upward move in equities and a corresponding drop in oil prices.

On the corporate front, after what felt like a weeks-long drought in meaningful news, this week we saw several notable headlines involving AI-related stocks. Broadcom announced some significant partnerships with Google and Anthropic. Amazon had a nice gain Thursday after CEO Andy Jassy released his annual shareholder letter, reiterating the company’s willingness to make significant AI investments. The company also announced that OpenAI signed a new multi-year AI infrastructure deal with AWS worth over $100 billion. Meta Platforms also captured a solid gain Thursday after announcing its new AI model and an expansion of a $21 billion AI infrastructure deal. Renewed AI enthusiasm and analyst upgrades helped push semiconductor stocks higher throughout the week. However, those gains came at the expense of software stocks, which pushed the iShares Software ETF lower on Thursday and Friday.

Last week’s fresh economic reports presented a complex picture of the U.S. economy. On the labor market, March nonfarm payroll data came in much better than expected, showing an increase of 178,000 jobs compared to just 60,000 expected by Wall Street. The unemployment rate even dipped slightly from 4.4% to 4.3%. March ISM Services came in a bit below consensus, however the report’s data showed new orders (a leading indicator) were higher. Respondent commentary was mixed with widespread uncertainty arising from the Iran conflict, but demand held strong in many areas. While the headline number for February durable goods orders disappointed, that was due to a fall in commercial aircrafts. Durable goods excluding-transportation grew faster than Wall Street expected in February. February PCE inflation data rose but was largely in-line with consensus expectations. However, that February data is very stale given the significant geopolitical events that have occurred since the start of March. Economic data on Friday morning offered an early look at the impact from the Iran conflict. The headline March CPI reading showed that inflation rose due to the surge in energy prices, however the rise was about in-line with what Wall Street had expected. The core CPI (which excludes food and energy) reading was better than feared, as it was too early to see the spillover effects from higher energy prices in this data. Additionally, the preliminary reading for the University of Michigan Consumer Sentiment Index for April fell to 47.6 (its lowest reading on record), below consensus of 52.0, though nearly all responses to the survey were from before the two-week ceasefire agreement was announced last week.

All told, this week marked another constructive step forward for equities, as improving geopolitical conditions provided a supportive backdrop for a continued rebound in the broader market, while enthusiasm for the AI trade began to return. Next week the market may begin to focus more on corporate news as earnings season begins, predominantly with the large banks beginning to report.

For the week, the S&P gained 3.6% to 6,817, the Nasdaq rose 4.7% to 22,903, and the Dow added 3.0% to close at 47,917.

Oil fell -13.4% to $96.57/bbl. Gold rose 2.3% to $4,787/oz. and the yield on the 10-year Treasury held relatively steady at 4.32%.

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