Market Analysis Summary - Week of 13 April 2026

Summary

A Middle East ceasefire sparked a broad market rally, but supply disruptions persist as the Strait of Hormuz remains closed. China's deflation risks are easing, yet US stagflation concerns are deepening ahead of a pivotal week for macro data and earnings.

What Happened Last Week

Middle East Ceasefire, Strait Still Closed

A two-week ceasefire prompted a sharp market rally. However, reports of continued attacks cast doubt on its durability, and the Strait of Hormuz remains effectively closed. US-Iran talks in Islamabad over the weekend failed to reach a resolution, with the US threatening to block the Strait on Monday. Brent crude oil surged 8% on Monday open.

China Prices Turn a Corner

China's consumer price index (CPI) held at 1.0% year-on-year (YoY) in March, easing from 1.3% in February. Notably, the producer price index (PPI) turned positive for the first time in 41 months, rising 0.5% YoY, indicating a broadening recovery momentum in the Chinese economy.

US Inflation Elevated Before the War

The Federal Reserve's preferred inflation gauge, core personal consumption expenditures (PCE), held at 0.4% month-on-month (MoM) in February. Headline CPI surged 0.9% MoM in March, driven by energy price spikes. Market pricing for a 2026 rate hike has been fully unwound.

US Consumer Sentiment Deteriorates

Inflation-adjusted spending rose just 0.1% MoM, while real average hourly wages grew only 0.3% YoY, the slowest pace since 2023. University of Michigan consumer sentiment fell to a historic low of 47.6 in April, indicating a meaningful slowdown in household spending and heightened stagflation risk.

Markets in Focus

US Equities Extend Relief Rally

US equity markets extended their ceasefire-driven rally, with the Nasdaq 100 gaining 4.5%. The S&P 500 and Dow Jones advanced 3.6% and 3.0% respectively. Technology, communication services, and consumer discretionary sectors led gains, while energy reversed course as oil prices eased.

Hang Seng Index Lags Regional Peers

The Hang Seng Index (HSI) gained 3.1% but underperformed broader Asian markets. The Nikkei 225 and KOSPI surged 7.2% and 9.0% respectively. Industrials and materials led gains, while energy and healthcare sectors were the weakest.

Crude Oil Posts Sharpest Weekly Decline Since 2020

WTI crude futures plunged 13.4%, the sharpest weekly decline since February 2020, as the ceasefire triggered an unwinding of geopolitical risk premiums. However, the underlying supply picture remains unresolved, with the Strait of Hormuz effectively closed.

The Week Ahead

This week focuses on a dense slate of Chinese economic data, including trade, housing, fixed asset investment, and Q1 GDP. Major US banks will report Q1 earnings, providing insights into how financial institutions are navigating slower global growth.

Key Macro Events This Week

• Monday 13 April 2026: US existing home sales (March)
• Tuesday 14 April 2026: Australia Westpac consumer confidence change (April)
• Thursday 16 April 2026: China GDP growth rate YoY (Q1)

Key Corporate Earnings

• Monday 13 April 2026: Goldman Sachs
• Tuesday 14 April 2026: JPMorgan Chase, Johnson & Johnson, Wells Fargo, Citigroup
• Wednesday 15 April 2026: ASML, Bank of America, Morgan Stanley
• Thursday 16 April 2026: TSMC, Netflix, PepsiCo