Ceasefire Hopes Spark Broad Rally as BlackRock Returns to Overweight U.S. and Emerging Market Equities

Weekly Market Commentary | Week of April 13^th, 2026

A Recap of Economic and Financial Trends from the Prior Week

By: Michael Horvath, The Quinnipiac University Global Economics Research Team

Last Week in Review

• A U.S.-Iran ceasefire drove a sharp mid-week rally and oil's steepest single-day decline since 2020, though a subsequent breakdown in negotiations introduced renewed uncertainty heading into the weekend

• All major U.S. indexes advanced for a second consecutive week as CPI accelerated to its fastest pace since May 2024 and consumer sentiment fell to its lowest reading in years

• European and Asian markets rebounded strongly on de-escalation hopes, with China's factory gate prices turning positive for the first time in over three years

Economic Recap

U.S. economic data last week reflected intensifying inflation pressures alongside continued expansion. The Bureau of Labor Statistics reported that CPI rose 3.3% year over year in March, accelerating from February's 2.4% and hitting the fastest pace since May 2024, with nearly three-quarters of the overall increase attributable to a sharp rise in gasoline prices. Core CPI, which excludes food and energy, rose 2.6%, a more modest uptick from 2.5% in February. The Bureau of Economic Analysis reported that its core personal consumption expenditures index rose 3.0% year over year in February, edging lower from 3.1% in January, though the data largely do not yet reflect potential impacts from the conflict in Iran. Personal income decreased 0.1% during the month, down from a 0.4% increase in January. The BEA also revised its third estimate of Q4 2025 real GDP growth further down to 0.5% on an annualized basis, from 0.7%, primarily reflecting lower levels of investment. The ISM Services PMI slipped 2.1 points to 54 in March, remaining in expansion territory for the 21st consecutive month, but the prices index rose to its highest level since October 2022. The University of Michigan's preliminary April Index of Consumer Sentiment fell to 47.6, a 5.7-point drop from the prior month, with expectations for inflation in the year ahead jumping to 4.8%, a full percentage point increase from March. ADP reported private employers added 62,000 jobs in March, ahead of estimates for around 40,000, while job openings declined to 6.9 million in February from 7.2 million in January, with hiring falling to its lowest level since 2020.

In Europe, the EU Economy Commissioner warned that the bloc is preparing to cut its 2026 growth forecast in May, noting the war could cut 0.4% off EU growth even if the conflict is short-lived. In Japan, the corporate goods price index rose 2.6% year over year in March, ahead of the consensus estimate of 2.3%, with petroleum the main driver. In China, the producer price index increased 0.5% from a year earlier in March, the first positive reading in over three years, driven by higher commodity and energy prices.

Market Recap

Source: JPMorgan Asset Management, “Weekly Market Recap” (April 13th, 2026). (Chart © JPMorgan Asset Management. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)

Major U.S. stock indexes recorded solid gains for a second consecutive week, led by the Nasdaq Composite's 4.68% gain, its best week since November. The S&P 500 advanced 3.58% and the Dow Jones Industrial Average rose 3.07%, with smaller-cap indexes also posting solid gains. Energy was the only S&P 500 sector to post negative returns, while consumer discretionary, communication services, and information technology led gains. At the style level, the Russell 1000 Growth gained 4.19% on the week and the Russell 1000 Value rose 2.94%, though growth remains down 5.55% year to date versus value's gain of 5.95%. The S&P 500 is now essentially flat year to date at -0.07%. The week's gains were driven primarily by a ceasefire framework agreed between the U.S. and Iran, with markets rallying sharply on Tuesday and Wednesday before oil prices staged their steepest single-day decline since 2020 on Wednesday. The 10-year U.S. Treasury yield fell from 4.44% to around 4.31% on the week as ceasefire news provided relief to fixed income markets, and Federal Reserve Chair Powell's comments helped ease some recent inflation concerns.

Internationally, the MSCI EAFE gained 4.44% and MSCI EM rose 7.45%, reflecting a particularly strong rebound in energy-importing markets previously under heavy selling pressure. The pan-European STOXX Europe 600 rose 3.05%, Germany's DAX added 2.74%, Italy's FTSE MIB rose 4.35%, France's CAC 40 climbed 3.73%, and the UK's FTSE 100 gained 1.57%. Japan's Nikkei 225 surged 7.15%, driven by technology stocks and exporters that had been hardest hit during prior weeks of geopolitical turmoil. Brent crude futures were up 3% on the week to USD 108, while December futures fell 7% to USD 78, with the inversion in oil futures suggesting markets see the conflict as a near-term disruption rather than a permanent structural shift.

Market Themes

BlackRock Returns to Overweight U.S. and Emerging Market Equities on Earnings Resilience and Conflict Incentives

BlackRock Investment Institute upgraded its tactical stance on both U.S. and emerging market equities last week, citing two key signposts: tangible evidence of actions that could reopen flows through the Strait of Hormuz, and visibility on the lingering macro impact being contained. While U.S.-Iran negotiations broke down over the weekend, BlackRock views the fact that talks began at all as concrete evidence of strong economic incentives for all parties to de-escalate. Critically, corporate earnings expectations have climbed for both the U.S. and emerging markets even since the conflict began on February 28, with the U.S. IT sector now forecast to post earnings growth of 43.4% in 2026 and U.S. total earnings growth of 18.7%, both revised upward since the start of the year. The 12-month forward valuation of the U.S. IT sector relative to other sectors has also fallen to its lowest level since mid-2020, reducing the valuation risk that had previously weighed on the sector. BlackRock is funding this equity upgrade by reducing its prior preference for front-end euro area government bonds, which it had adopted after a sharp pricing in of ECB rate hike expectations early in the conflict.

U.S.-Iran Ceasefire Dynamics Reshape the Near-Term Risk Outlook

The week's dominant market driver was the announcement of a conditional two-week ceasefire framework between the U.S. and Iran, which triggered a sharp risk-on rally across global equities and sent oil prices to their steepest single-day decline since 2020. Markets responded quickly, with energy-importing economies that had been hardest hit during the prior weeks of escalation, including Japan, South Korea, and much of Europe, staging meaningful recoveries. However, the breakdown of negotiations over the weekend introduced renewed uncertainty, with BlackRock noting a partial unwind of ceasefire-driven moves as a near-term risk. Brent crude futures settled around USD 108 for near-term contracts while December futures fell to USD 78, an inversion that suggests markets are pricing in a near-term disruption rather than a permanent structural shift. The EU Economy Commissioner warned of a potential stagflationary shock, noting that even a short-lived conflict could shave 0.4% off EU economic growth, while more substantial disruptions could reduce growth by 0.6%. The durability of any eventual resolution, and whether Strait of Hormuz shipping traffic can return toward its prior 12-month average, remains the single most important variable for global energy markets and risk asset performance in the weeks ahead.

Chart of the Week

Source: BlackRock Investment Institute with data from IBES consensus, sourced from LSEG Datastream, "Earnings Unscathed: Earnings Growth Expectations for 2026, Year-on-Year Growth," April 2026. (Chart © BlackRock Investment Institute. Used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)

The chart compares 2026 year-on-year earnings growth expectations across four groupings at three points in time: January 1, February 27, and April 9. For the U.S. IT sector, expectations rose from approximately 31% at the start of the year to 43.4% as of April 9, well above the level seen just before the conflict began on February 27. U.S. total earnings growth expectations held steady and edged up to 18.7% by April 9. Emerging Markets earnings growth expectations rose sharply to 38.9% by April 9, up from approximately 18% at the start of the year, driven in part by AI-related upgrades in South Korea and Taiwan. Euro area earnings growth expectations rose to 18.2% by April 9 after declining between January and February. The chart illustrates BlackRock's central argument for re-upping risk: earnings expectations have not only held up through the conflict but have in many cases been revised meaningfully higher, particularly in technology and emerging markets, providing a fundamental underpinning for equity valuations even as geopolitical uncertainty persists.

Market Outlook

BlackRock Investment Institute will watch U.S. PPI data this week for evidence of whether energy-driven cost pressures are continuing to push prices upward after February's data came in higher than expected and views the March CPI surge in energy inflation at the headline level as having shown limited spillover into core inflation so far. In China, BlackRock expects to see signs of modest but steady growth as external demand rather than domestic momentum gradually powers a recovery. The breakdown of U.S.-Iran negotiations over the weekend could produce a partial unwind of the prior week's ceasefire-driven market moves, including a rebound in oil prices, a reversal in Treasury yields, and some giveback in equity gains. Q1 2026 earnings season kicks off in earnest this week with major U.S. banks and other large-cap companies reporting, and investor focus will center on management commentary regarding the economic impact of higher energy costs, the durability of consumer spending, and the AI-driven earnings growth that has helped sustain equity valuations through the conflict period.

Calendar Events

Economic Data:

Apr. 13 (Mon): Existing Home Sales (Mar)

Apr. 14 (Tue): NFIB Small Business Index (Mar); PPI (Mar)

Apr. 15 (Wed): Empire State Index (Apr); NAHB Housing Market Index (Apr); Export and Import Price Indexes (Mar)

Apr. 16 (Thu): Initial jobless Claims (Apr 11); Philadelphia Fed Index (Apr); Industrial Production (Mar)

Major Corporate Earnings:

Apr. 14 (Tue): JPMorgan Chase and Co. (Q1 2026); Wells Fargo and Co. (Q1 2026); Citigroup (Q1 2026); Johnson and Johnson (Q1 2026); BlackRock Inc. (Q1 2026)

Apr. 15 (Wed): Morgan Stanley (Q1 2026); Bank of America (Q1 2026); ASML Holding (Q1 2026); M&T Bank Corporation (Q1 2026)

Apr. 16 (Thu): Netflix Inc. (Q1 2026); Taiwan Semiconductor Manufacturing (Q1 2026); Abbott Laboratories (Q1 2026); PepsiCo (Q1 2026); The Travelers Companies (Q1 2026)

Sources

J.P. Morgan Asset Management. "Weekly Market Recap." J.P. Morgan Asset Management. https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/

J.P. Morgan Asset Management. "Economic Update." J.P. Morgan Asset Management. https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/economic-update/

T. Rowe Price. "Global Markets Weekly Update." T. Rowe Price Insights. https://www.troweprice.com/personal-investing/resources/insights/global-markets-weekly-update.html

BlackRock Investment Institute. "Weekly Investment Commentary: Back to Overweight U.S. Stocks." BlackRock, April 13, 2026. https://www.blackrock.com/us/individual/literature/market-commentary/weekly-investment-commentary-en-us-20260413-back-to-overweight-us-stocks.pdf

BlackRock Investment Institute. "Weekly Commentary." BlackRock. https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary

BlackRock Investment Institute. "Weekly Commentary Archives." BlackRock. https://www.blackrock.com/corporate/insights/blackrock-investment-institute/archives

Apollo. "The Daily Spark." Apollo. https://www.apollo.com/wealth/the-daily-spark

MarketWatch. "Economic Calendar." MarketWatch. https://www.marketwatch.com/economy-politics/calendar

Yahoo Finance. "Earnings Calendar." Yahoo Finance. https://finance.yahoo.com/calendar/earnings/