Week in Markets: Ceasefire Crashes Oil 16%, S&P Best Week Since November, CPI Surges to 3.3%

For one week, the world believed the war might end. On Tuesday evening, less than two hours before a presidential deadline that threatened to level Iran's power grid, Trump announced a two-week ceasefire brokered by Pakistan. Oil crashed 16% in a single session. The Dow posted its best day in a year. Bitcoin broke above $70,000 for the first time in two weeks. The VIX fell below 20, back to where it was before the first bombs dropped on February 28.

Then it all collapsed. Vice President Vance flew to Islamabad with Kushner and Witkoff for the first direct US-Iran talks since the 1979 revolution. After 21 hours of negotiations, the Iranians walked. The sticking points were the same ones that have defined Middle Eastern geopolitics for decades: nuclear sovereignty and control of the strait. By Sunday morning, Trump was on Truth Social announcing a naval blockade of every ship entering or leaving Iranian ports. Monday's market open must now reprice everything the week just unpriced.

The numbers tell the story of the whipsaw. The S&P 500 gained 3.6% for the week, its best since November. But Friday's CPI report reminded everyone why the ceasefire mattered beyond sentiment: March headline inflation surged to 3.3%, driven almost entirely by a 21.2% monthly spike in gasoline prices. Core inflation held at 2.6%, giving the Fed analytical cover to stay on hold, but the energy war tax on American consumers is now visible in every data series. If the blockade sends oil back above $110, April's inflation numbers will be worse.

Macro Pulse

CPI: The Energy War Tax Arrives

Friday's Consumer Price Index was the week's second-largest catalyst after the ceasefire itself. March CPI came in at 0.9% month-over-month, the largest monthly increase since June 2022. Year-over-year headline inflation jumped to 3.3%, up from 2.4% in February, the highest reading since April 2024.

The composition told the full story. Energy prices rose 10.9% in a single month. Gasoline surged 21.2%. Together, energy accounted for nearly three-quarters of the total monthly CPI increase. Strip out food and energy, and the picture changes entirely: core CPI rose just 0.2% month-over-month and 2.6% year-over-year, the latter coming in 0.1 percentage point below consensus. Shelter, the most persistent component, rose 0.3% monthly and 3.0% annually, tied for its lowest annual rate since August 2021.

The market interpretation was nuanced. The hot headline was treated as a transitory energy shock, not a structural inflation problem. Core stability at 2.6% gave the Fed exactly the cover it needs to maintain its current "wait and see" posture. Stocks slipped modestly on Friday but held the week's gains. The real concern is forward-looking: if the Hormuz blockade sends oil back toward $110, the April CPI print will be worse, and the "transitory" argument becomes harder to defend.

Sources - CPI: BLS: Consumer Price Index March 2026 | CNBC: CPI inflation report March 2026 | Kiplinger: March CPI Report

The Fed Holds, but Hawks Emerge

The Federal Reserve maintained the federal funds rate at 3.50-3.75% at its March 17-18 meeting, and the CME FedWatch tool now shows a 94.8% probability of another hold at the April 28-29 FOMC meeting.

But Wednesday's release of the March FOMC minutes added a hawkish wrinkle. For the first time in this cycle, "some" officials supported acknowledging the possibility of rate hikes, and the "vast majority" noted inflation could remain above 2% longer than previously expected. Seven of nineteen members forecast zero rate cuts in 2026. The rate hike discussion, even as a contingency, marks a significant shift in tone from Powell's dovish "wait and see" rhetoric just five days earlier.

The market barely noticed. The minutes were released into the middle of the ceasefire euphoria, and the Wednesday session was dominated by the oil crash and equity surge. But the hawkish signal is a time bomb. If headline CPI stays above 3% through the summer, driven by sustained energy prices, the Fed's patience will be tested.

The bifurcation in the CPI data offers an uneasy equilibrium: headline hot enough to prevent rate cuts, core cool enough to prevent rate hikes. The Fed is trapped in the middle, and the Iran war is doing the trapping.

Sources - Fed & Rates: Federal Reserve: FOMC Statement March 18 | Federal Reserve: FOMC Minutes March 17-18 | CME FedWatch | Advisor Perspectives: Treasury Yields April 10

The Ceasefire Arc

Monday April 7: The Deadline

Markets opened after the Easter weekend with two undigested catalysts: the NFP surprise of +178,000 released on Good Friday, and Trump's 48-hour ultimatum from the previous Saturday. The S&P 500 had closed at 6,582.69 on April 2, the last pre-holiday session. Monday priced both events, gaining modestly.

But the day's focus was entirely on the 8 PM ET deadline. Hours earlier, the US had struck more than 50 military targets on Iran's Kharg Island, targeting bunkers, storage facilities, and air defense systems while leaving oil infrastructure untouched. Satellite imagery from TankerTrackers.com confirmed the petroleum terminals were "fully operational" within hours. Trump warned from the White House South Lawn that "a whole civilization could die tonight" if no deal was reached.

Tuesday April 8: Less Than Two Hours

At 6:32 PM ET, less than two hours before the presidential deadline, Trump posted on Truth Social: a two-week ceasefire, mediated by Pakistan, effective immediately. The US and Israel would halt strikes on Iran. Iran would reopen the Strait of Hormuz. Face-to-face negotiations would follow in Islamabad. The immediate market reaction came in Asian futures, which surged overnight.

Wednesday April 9: The Explosion

US markets opened to the biggest risk-on session since April 2025. The Dow gained 1,325 points, its best single day in a year. The S&P 500 jumped 2.51% to 6,782.81, clearing both its 50-day and 200-day moving averages. The Nasdaq surged 2.80%. WTI crude crashed 16.4% in one session, from approximately $112 to $94.41, the largest single-day oil decline since the COVID demand shock in April 2020. The VIX collapsed 5.6 points to 20.18, falling back to its pre-war (February 27) level.

European markets rallied even harder. The pan-European Stoxx 600 surged 3.7%, with travel stocks up 7% as airlines and cruise lines priced in lower fuel costs. European natural gas futures fell as much as 20% intraday, the steepest drop in two years.

But the ceasefire had cracks from the moment it was announced. Within hours, Iran fired drones and missiles at Gulf states: 28 drones at Kuwait, 35 at the UAE, 7 ballistic missiles at Saudi Arabia, and 7 at Qatar. Iran blamed the attacks on coordination failures within its military chain of command. And Israel, interpreting the ceasefire as covering only US-Iran hostilities, launched what it described as its "most strong attacks" across Lebanon, killing 357 people. Trump confirmed the next day that the ceasefire "does not cover Lebanon."

Sources - Ceasefire: CNBC: Dow jumps 1,300 points | NPR: Oil plunges and stocks soar | Al Jazeera: Ceasefire terms | Times of Israel: IDF largest strikes on Hezbollah

Thursday-Friday: The Strait Stays Closed

Despite the ceasefire, the Strait of Hormuz was not reopened. On Thursday, ADNOC CEO Sultan Al Jaber confirmed the strait was "still not open" because Iran continued restricting and conditioning traffic. Shipping executives reported having "no information" on how to transit and no contact with Iranian authorities. CNBC reported that 230 loaded oil tankers remained waiting inside the Persian Gulf.

By Friday, three oil supertankers, two Chinese and one Greek, managed to sail through the strait, marking the first significant crude movements since the conflict began. Markets treated it as a positive signal, but the scale was negligible: three ships versus the roughly 60 that would normally transit daily.

Oil settled near $96-98 for WTI by Friday, down roughly 12% on the week. But the physical market told a different story. Dated Brent, the spot price for actual crude delivery, remained above $124 per barrel even after the futures crash. The spread between physical and futures was the widest in decades, a clear signal that the tanker market did not believe the ceasefire would solve the supply crisis.

Sources - Strait of Hormuz: CNBC: Tankers return but disruption to last weeks | CNN: Ships still aren't going through Hormuz | Bloomberg: Three supertankers sail through

Weekend: Collapse

On Saturday, Vice President Vance arrived in Islamabad with Special Envoy Steve Witkoff and Jared Kushner. The Iranian delegation, led by Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi, met them for the first direct US-Iran talks since 1979.

After 21 hours of negotiations, Vance emerged to say: "We have not reached an agreement." The Iranians refused to commit to not pursuing nuclear weapons. They demanded recognition of Iranian sovereignty over the Strait of Hormuz, the unfreezing of $27 billion in assets, and war reparations. Ghalibaf said the Americans "ultimately failed to gain the trust of the Iranian delegation."

On Sunday, Trump posted the response: "Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz." CENTCOM confirmed that the blockade of Iranian ports would begin Monday at 10 AM ET. Ships transiting between non-Iranian ports would still be permitted, but the blockade would be "enforced impartially against vessels of all nations."

Oil futures surged immediately. WTI jumped 8% to approximately $105. Brent climbed 7.4% to $102. The oil tankers that had just begun testing the strait reportedly made U-turns.

The ceasefire technically holds through April 22. But the blockade makes the next two weeks more volatile, not less.

Sources - Islamabad Talks & Blockade: NBC News: No agreement after 21 hours | Axios: Trump naval blockade | Bloomberg: Trump says US will begin blockade | Fortune: Oil tankers U-turn

Russia-Ukraine: Easter Truce in Name Only

A brief aside from the Persian Gulf. Russia and Ukraine agreed to a 32-hour ceasefire for Orthodox Easter, effective Friday April 11. The UAE facilitated a prisoner exchange of 175 on each side. Within hours, Ukraine recorded 2,299 violations: 153 artillery strikes, 22 assault operations, and 160 Russian drones launched before the truce even began officially. Russia claimed 1,971 Ukrainian violations. The ceasefire, like the one in the Gulf, existed more on paper than on the battlefield.

Sources - Russia-Ukraine: Al Jazeera: Russia Ukraine Easter ceasefire

Markets

Equities: Second Straight Winning Week

The S&P 500 closed Friday at 6,816.89, up 3.6% for the week and now just 2.3% below its January 27 all-time high. The Nasdaq gained 4.7% to 22,902.89, its best week since November. The Dow added 3.0% to 47,916.57, turning positive for 2026 year-to-date. The VIX closed at 19.23, its first finish below 20 since late February.

The rally was entirely front-loaded. Wednesday's ceasefire session accounted for the bulk of the weekly gains. Thursday consolidated as ceasefire violations emerged. Friday gave back a sliver after the hot CPI headline, with the S&P dipping 0.11% and the Dow losing 269 points. The Nasdaq bucked the trend, gaining 0.35% on strength in Broadcom (+4.7%) and Nvidia (+2.6%).

Sector rotation was dramatic. Industrials led the week at +5.3%, followed by technology. Energy stocks, the Q1 leaders with a 34% year-to-date gain at peak, lagged sharply as oil crashed. Consumer staples (-1.43%) and healthcare (-1.33%) reversed their defensive positioning. The cyclical-to-defensive rotation that defined the war period was partially unwound in a single week.

Sources - Equities: Advisor Perspectives: S&P 500 Best Week Since November | Kiplinger: S&P 500, Nasdaq Best Weeks Since November | CNBC: S&P 500 slips Friday, best week since November

Oil: The Physical-Futures Divide

The oil price action this week was the most dramatic since April 2020. WTI crashed from approximately $112 to $94.41 on Wednesday, a 16.4% single-day decline. Brent dropped from $112 to roughly $95. By Friday, both benchmarks settled in the $96-98 range, down roughly 12% on the week.

But the physical market refused to follow. Dated Brent, the benchmark for actual crude delivery, remained above $124 per barrel mid-week. The backwardation between physical and futures was the widest in memory. The message: tanker operators, refiners, and crude traders with actual barrels to move did not believe the ceasefire would meaningfully restore supply through Hormuz.

VLCC (Very Large Crude Carrier) day rates hit a record $423,000 per day. War risk insurance premiums climbed to 3.5-10% of vessel value per voyage, up over 200% from pre-conflict levels. The IEA confirmed it had released 426 million barrels from emergency reserves since the conflict began, the largest coordinated release in the agency's history since its founding in 1974.

Goldman Sachs warned that if Hormuz stays largely closed for another month, Brent will remain above $100 through all of 2026, even if a ceasefire holds.

Sources - Oil & Commodities: CNBC: Oil prices plunge | CNBC: Dated Brent above $120 | Fortune: Oil price April 10

Global Equities

European markets rallied sharply on the ceasefire. The pan-European Stoxx 600 gained 3.05% for the week, with the CAC 40 leading at +3.73% and the DAX at +2.74%. The FTSE 100 underperformed at +1.57%, dragged by its heavy weighting in oil majors Shell and BP, which sold off on the crude price collapse.

Asian markets saw strong single-day moves on Wednesday. Shanghai's SSE Composite surged 2.7% as China, the world's largest oil importer, priced in reduced energy costs. The Hang Seng rose 1.7%.

Sources - Global Equities: CNBC: European stocks close higher

Crypto

Bitcoin: From Extreme Fear to Greed in Five Days

Bitcoin entered the week at approximately $68,270, hovering near support after more than 60 consecutive days of "extreme fear" readings on the Fear and Greed Index, the longest sustained streak since the Terra/LUNA collapse in 2022. By Saturday April 11, it was trading above $73,000. The 7% weekly gain was driven entirely by the ceasefire catalyst and the short squeeze it triggered.

The timing was precise. Trump's ceasefire announcement on Tuesday evening sent Bitcoin above $70,000 for the first time since March 26. By Wednesday morning, the rally extended to $72,750. Total crypto liquidations reached $581 million, with $425 million coming from short positions. The short squeeze was the most aggressive since early March.

Friday's CPI report initially created uncertainty, but the market resolved it bullishly. Core CPI at 2.6% (below forecast) was interpreted as ruling out a rate hike while the hot headline was dismissed as an energy-driven transitory shock. Bitcoin pushed higher through the weekend, touching $73,077 on Saturday.

Then Sunday's blockade announcement reversed the momentum. Bitcoin slid to approximately $70,900 by Sunday evening, giving back a third of the week's gains. As of Monday morning, BTC trades near $70,800.

The Fear and Greed Index told the sentiment story in a single number: it rose from 8-11 (extreme fear, where it had been locked for two months) to 51 (greed) by Friday. Every prior instance of the index dropping below 10 has historically been followed by 40-60% gains within 12 months. Whether that pattern holds depends entirely on what happens in the strait.

Sources - Bitcoin: CoinDesk: Bitcoin surges past $72,000 on ceasefire | CoinDesk: Bitcoin rises after core CPI | Milkroad: Fear & Greed

ETF Flows: Institutions Return

Spot Bitcoin ETFs gathered $789 million in net inflows for the week, the highest weekly total since late February. BlackRock's IBIT accounted for $612 million, nearly 80% of the total. The week's accumulation totaled approximately 7,358 BTC.

The pattern was uneven. Monday saw $471 million in a single day, the strongest daily inflow since February. Thursday recorded $125 million in outflows as the ceasefire began to crack. Friday bounced back with $335 million in net inflows.

Ethereum ETFs showed a recovery after weeks of persistent outflows. Inflows reached approximately $120 million early in the week, with BlackRock's ETHA leading at $60.8 million. Year-to-date ETH ETF flows remain negative at roughly -$327 million, but the weekly trajectory turned positive.

Sources - ETF Flows: CoinDesk: Bitcoin ETF inflows hit highest since February | CoinTribune: Bitcoin ETFs regain positive flows

DeFi and Ecosystem

Monad, the Layer 1 where Pingu perpetuals are deployed, had a strong week. The MON token surged 22-25%, driven by both the ceasefire risk-on rotation and a strategic alliance with NYSE and Securitize to build a 24/7 tokenized securities platform. Monad's TVL surpassed $355 million, a 55% increase since early February. Bridged assets exceeded $654 million. The Monad Foundation announced a Dedicated Device Subsidy Program for protocol teams with over $2.5 million in TVL.

Stablecoin market capitalization hit an all-time high of $318.6 billion, approaching the $320 billion milestone. USDT retained 57.85% market share while USDC's transaction volume continued to outpace USDT, accounting for 64% of stablecoin transaction volume.

On the regulatory front, the CLARITY Act is approaching its Senate Banking Committee markup, targeted for late April. The legislation builds on the GENIUS Act (signed into law in 2025) and the SEC-CFTC harmonization framework established in March 2026, which created a five-category token taxonomy clarifying how federal securities laws apply to digital assets.

The Drift Protocol hack from April 1, in which $285 million was stolen from the Solana-based perp DEX by DPRK-linked hackers, continued to dominate DeFi security discourse. A class action lawsuit investigation was announced on April 7 by Gibbs Mura law firm.

Sources - DeFi & Ecosystem: Blockchain Magazine: Monad surges 22% | CoinMarketCap: Monad updates | Madres Travels: Stablecoin market cap ATH

Week Ahead

Monday opens into a different world than where Friday closed. The ceasefire-driven gains are now at risk of partial or full reversal. The naval blockade of Iranian ports takes effect at 10 AM ET Monday. CENTCOM has said non-Iranian port traffic through Hormuz will be permitted, but the distinction is fragile.

Beyond the blockade, the week is loaded with catalysts. Goldman Sachs reports Q1 earnings Monday before the bell, with consensus at $16.9 billion in revenue and EPS of $16.86. JPMorgan follows Tuesday, expected at $48.5 billion in revenue and $5.44 EPS, kicking off the most important bank earnings week of Q1 season. The fee machine narrative is the story: investment banking revenues are expected up 18-26% year-over-year as M&A activity rebounded sharply in Q1.

March PPI lands Tuesday morning, following the hot CPI. February PPI was already at +3.4% year-over-year. The March print will show the oil shock hitting producer prices with full force. The forecast of 1.2% month-over-month would be the highest PPI reading in several years.

China releases Q1 GDP Thursday, with consensus at 4.8% year-over-year. Industrial production, retail sales, and fixed asset investment all drop the same day. The data will show how the world's largest oil importer is absorbing the Hormuz disruption.

The ceasefire technically holds through April 22. But with the blockade in effect, the diplomatic calendar has compressed. Any escalation before that date could unwind the entire week's risk-on positioning in a single session.

Sources - Week Ahead: Alphastreet: Bank earnings preview | BLS: PPI Release Schedule