Weekly Economic Update: April 16th, 2026
“Ceasefire trade” was on last week
After President Trump announced Iran had agreed to hold ceasefire talks last Tuesday — mere hours before his deadline where he threatened to attack and destroy Iran’s power plants and bridges — markets took off. The Dow was up 1,325 points on Wednesday, its best day since April of last year, while oil retreated.1,2 The “ceasefire trade” led to the market going on another mini run on Thursday before cooling a bit to end the week.3
Now the hard work of stabilization begins. The talks scheduled for the weekend of April 10-11 were hosted by Pakistan and ended without an agreement.4 Is the regime just stalling for time? What exactly stalling would achieve isn’t apparent, and would only lead to the resumption of the bombing and destruction of Iran’s infrastructure, more suffering for its people and even harsher demands from the U.S.
Markets will continue to swing dramatically with every twist and turn in this saga. On Friday, there were reports that traffic was piling up in the Strait of Hormuz, after Iran agreed to the free flow of shipping. Then the U.S. announced it will blockade the Strait after talks fell apart over the weekend. Time will tell how all this ends, but markets will continue to react to each new move in dramatic fashion.
All of this is fluid, so be mindful that we have gone this far with all this volatility and the Dow and S&P 500 are close to their all-time highs.5 It may sound crazy, but we may be talking about new records in a matter of weeks. Again, this is where patience pays off. Taking the long view, having a plan and maintaining focus typically benefits investors. As individuals, we don’t have the gizmos or the time to compete with Wall Street traders on the same playing field, but we do have the ability to wait out these wild markets and stay on course. This crisis is far from over and will probably feature more twists and turns along the way, but so far those who stayed the course seem to be doing okay.
Inflation rises, thanks to Iran conflict
It was no surprise March’s Consumer Price Index (CPI) reading came in hotter than it has been.6 This reading was entirely predictable, mostly due to the rapid increase of oil and energy prices. Consensus was calling for 3.4% year-over-year inflation, while the actual number was a slightly better 3.3%. Add to that the final reading of fourth-quarter Gross Domestic Product (GDP) being revised from an anemic 0.7% downward to a barely positive 0.5%.7
All this led to a not-great day for the markets, which had time to ruminate and wait on the ceasefire meeting over the weekend. The euphoria dissipated as markets focused on the implications of higher inflation and a slow growth economy. Mundane economic data returned the market’s focus back to economic growth, inflation and interest rates.
The minutes from the Federal Reserve’s most recent meeting were a non-event as the market soared with the announcement of the ceasefire last Wednesday.8 Maybe traders reread the minutes on Friday as the Fed showed growing openness to raising rates at its last meeting? With the uncertainty of how ceasefire negotiations would go and the shipping constraints in the Strait of Hormuz, markets decided to take gains and sit out the weekend to see what news comes next.
The inflation number is wholly reversible if we see oil continue to decline. The problem is how soon we’ll see that reflected in consumer prices, which move quickly upward but have a notorious reputation for taking their sweet time coming down. For the first time in a while, markets took notice of economic reports instead of oil and the Iran conflict to close out the week.
Coming this week
- All eyes will continue to be on the Iran conflict, whether or not the ceasefire will hold and the outcome of the talks in Pakistan.
- Monday will be light with only existing home sales.
- The other bit of meaningful economic news will be Producer Price Index (PPI) on Tuesday. Like CPI last week, PPI will likely be elevated due to the spike in oil prices since March.
- On Wednesday we’ll get the Beige Book, Empire State manufacturing survey and MBA mortgage applications.
- Thursday will feature the Philadelphia Fed manufacturing survey, jobless claims, home builder confidence and import prices.
- Friday will be tame with only housing starts and building permits.
- Fed speakers will be out in force. What we are looking for is any mention of raising rates due to the recent inflation spike. If “transitory” has any relevance when it comes to talks of inflation, it should be here. We’ll see what the Fed speakers say.
Sources:
1 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed April 13, 2026.
2 Yahoo! Finance. “Crude Oil May 26 (CL=F).” https://finance.yahoo.com/quote/CL=F/. Accessed April 13, 2026.
3 Bryce Engelland. Thomson Reuters. April 9, 2026. “What the Iranian war ceasefire means for global trade … and whether it’ll last.” https://www.thomsonreuters.com/en-us/posts/international-trade-and-supply-chain/ceasefire-impact-global-trade/. Accessed April 13, 2026.
4 Munir Ahmed, Josh Boak and Sam Metz. AP. April 12, 2026. “US military says it will blockade Iran ports after ceasefire talks ended without agreement.” https://apnews.com/article/iran-us-israel-trump-lebanon-april-12-2026-a8a0d22918fc3fb30bc3abf1cd5c5a13. Accessed April 13, 2026.
5 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed April 13, 2026.
6 U.S. Bureau of Labor Statistics. April 10, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed April 13, 2026.
7 Bureau of Economic Analysis. April 9, 2026. “GDP (Third Estimate), Industries, Corporate Profits, State GDP, and State Personal Income, 4th Quarter and Year 2025.” https://www.bea.gov/news/2026/gdp-third-estimate-industries-corporate-profits-state-gdp-and-state-personal-income-4th. Accessed April 13, 2026.
8 Federal Reserve. “Minutes of the Federal Open Market Committee, March 17-18, 2026.” https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20260318.pdf. Accessed April 13, 2026.
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