The Two-Week Window

👋 ICYMI

This was the week markets have been waiting for — and it delivered a mix of hope and harsh reality.

On Tuesday evening, President Trump announced on Truth Social that the U.S. and Iran had agreed to a two-week ceasefire, mediated by Pakistan, with Iran agreeing to reopen the Strait of Hormuz. The announcement came hours before Trump's deadline to strike Iran's power plants. Oil prices plunged as much as 16%, and stocks surged — the Dow gained over 1,000 points on Wednesday for its best day in a year. Brent crude fell 11% on the week to $97, its biggest weekly decline in nearly 10 months.

The S&P 500 rose 3.6% for the week — its best weekly performance since November and second consecutive weekly gain — while the Nasdaq soared 4.7% and the Dow added 3%. The Dow moved back into positive territory for 2026, while the S&P 500 and Nasdaq sit just under 1% below the flatline for the year.

But the ceasefire is already fraying. Israel launched massive strikes on Lebanon — killing 254 people — arguing Lebanon wasn't covered by the deal, contradicting the Pakistani mediators and Iran. Iran responded by pausing Hormuz traffic again, and by Friday the Strait remained effectively closed to most shipping. VP Vance and envoy Witkoff are in Islamabad this weekend for talks that will determine whether this fragile truce holds.

On Friday, the March CPI report showed headline inflation surged to 3.3% annually — up from 2.4% in February — driven by a record 21.2% monthly spike in gasoline prices, the largest since 1967. However, core CPI (excluding food and energy) came in at just 0.2% monthly and 2.6% annually — below expectations — indicating the war has not yet spread beyond the pump.

🔁 Market Movers

• 🕊 US-Iran Ceasefire Sparks Massive Rally — Then Tests Begin

  The Pakistan-mediated two-week ceasefire sent the Dow up over 1,000 points on Wednesday and oil down 16%. But by Thursday, Trump's primetime address warning the U.S. would "hit Iran hard" if talks fail, combined with Israeli strikes on Lebanon that Iran called a ceasefire violation, sent oil back above $97.

• 📊 March CPI: Headline Soars, Core Stays Tame

  The CPI rose 0.9% month over month — the largest increase since June 2022 — with energy costs surging 10.9% and gasoline alone jumping a record 21.2%. Annual headline inflation hit 3.3%, up sharply from 2.4% in February. The critical detail: core CPI of 0.2% monthly and 2.6% annually came in below expectations, suggesting the inflation shock remains energy-driven and hasn't yet infected broader prices. Markets initially traded higher on this distinction.

• 💻 TSMC Smashes Q1 Revenue Estimates

  Taiwan Semiconductor $TSM ( ▲ 1.4% ) reported Q1 revenue of $35.7 billion — up 35% year over year and beating analyst estimates — as AI chip demand held strong through the war's opening weeks. March revenue alone surged 45.2% year over year, the strongest March on record. TSMC shares are up 29% year to date. Full Q1 earnings and updated guidance are due April 16, which could catalyse the next leg for semiconductor stocks.

• 📉 Q4 GDP Revised Down to 0.5%

  The Commerce Department revised Q4 2025 GDP growth down to 0.5% annualized, from the previously reported 0.7%. The Atlanta Fed's GDPNow tracker for Q1 2026 fell to 1.3%, the lowest since the war began. The revisions underscore how little momentum the economy carried into the conflict.

👀 Signals I’m Watching

• 🕊 The Weekend Talks Are Everything

  VP Vance and envoy Witkoff are in Islamabad negotiating what could become either a lasting peace framework or a collapse that sends oil back above $110. The market rallied this week pricing in optimism. If these talks fail, the unwind could be violent. If they produce a credible extension or framework, markets could reclaim their January highs within weeks. This is the single most binary risk/reward event of 2026.

• 🔥 Headline Hot, Core Cool — For Now

  The split between headline CPI (3.3%) and core CPI (2.6%) is the market's lifeline. It allows the Fed to characterize the inflation spike as transitory — a direct consequence of the energy shock rather than structural overheating. But analysts warn this window may close. If oil remains elevated through April and May, energy costs will begin filtering into services, logistics, and food prices, narrowing the gap and forcing the Fed's hand.

• 🤖 AI Demand Is Immune — So Far

  TSMC's 35% revenue growth, Micron's $MU ( ▼ 0.22% ) record quarter from two weeks ago, and the S&P 500's 8-day winning streak led by Nvidia $NVDA ( ▲ 2.57% ) , Broadcom $AVGO ( ▲ 4.69% ) , and Meta $META ( ▲ 0.23% ) all point to the same conclusion: the AI hardware buildout has not been derailed by the war. Software remains deeply out of favour, but pick-and-shovel AI names continue to outperform. The question is whether this divergence is sustainable — or whether a prolonged energy shock eventually dents even the strongest secular trends.

• 📊 Earnings Season Starts Next Week

  JPMorgan $JPM ( ▼ 0.15% ) , Goldman Sachs $GS ( ▲ 0.45% ) , and other banks kick off Q1 earnings season on Tuesday. This will be the first round of results reflecting the war's impact on corporate profitability, loan demand, and forward guidance. Bank commentary on credit quality, consumer behaviour, and capital markets activity will set the tone for the rest of the reporting season.

⚠️ Red Flag to Note

Consumer Sentiment Is at Levels That Have Never Ended Well

The University of Michigan sentiment reading of 47.6 is not just low — it is the lowest in the survey's 70+ year history. Every prior trough in this index — the 2008 financial crisis, the 2011 debt ceiling standoff, the 2022 inflation shock — eventually coincided with a slowdown in consumer spending. Consumers are now anticipating 4.8% inflation over the next year while simultaneously reporting the weakest assessment of personal finances since the survey began. If sentiment translates to spending cuts, Q1 and Q2 earnings estimates — particularly for consumer discretionary and retail — will need to come down.

🔍 Insider Transactions I’m Watching

📬 Closing Note

After six weeks of war, the market got what it's been asking for — a ceasefire. And it responded the way you'd expect: the best weekly gain since November, oil plunging, and a wave of risk-on buying across every major index.

But as the dust settles, the picture is more nuanced than the headline numbers suggest. Consumer sentiment just hit an all-time low. Headline inflation has tripled in a month. And the ceasefire itself has already been tested by Israeli strikes in Lebanon that Iran calls a violation.

This is a market that wants desperately to look forward — past the war, past the oil shock, past the inflation spike — and back toward the AI-driven growth narrative that powered the last two years. TSMC's blowout quarter and the tech rally this week show that narrative hasn't broken. But it's competing with real-world constraints that can't be wished away.

The next two weeks will determine whether this ceasefire becomes a genuine inflection point — or just another false start. Earnings season begins Tuesday. Inflation data is still filtering through. And negotiations in Islamabad this weekend will shape everything.

Stay patient. Stay selective. And let the data guide the story.

Until next Sunday —

George ☕