Markets Lower As Geopolitical Uncertainty Remains

For the week ending 24 April 2026

As of midday Friday, global equities were lower on the week as geopolitical risks, thought to have been cooling, re-emerged. The yield on the US 10-year Treasury note rose 5 basis points to 4.30% from last week. The re-escalation of the Iranian conflict saw the price of a barrel of West Texas Intermediate crude oil rise about $11.03 to $94.86. Volatility, as measured by futures of the Cboe Volatility Index (VIX), increase from last Friday to 18.8.

IRAN CRISIS

Strait remains closed

The Strait of Hormuz remained closed despite initial declarations late last week that it would fully reopen to commercial transit. Over the weekend, Iran reversed its decision to open the strait as long as the US naval blockade remained in place. Additionally, the US seized an Iranian cargo ship, and Iran fired on a tanker attempting to cross the waterway. The escalation resulted in oil prices surging again.

The US military has also increased its mine-clearing operations along the strait, with Defense Secretary Pete Hegseth stating that Iran laying mines would be a violation of the ceasefire agreement. President Trump also said via social media that he has ordered the US Navy to target any Iranian boats attempting to lay mines in the strait. Peace talks are expected to resume this weekend.

MACRO NEWS

US pending home sales beat estimates

US pending home sales were up 1.5% in March, ahead of estimates for a 0.5% increase. The increase was likely a result of a pickup in inventory coupled with pent-up demand for housing despite high mortgage rates. Home sellers outnumbered buyers by an estimated 43% in March, an increase from 28% a year earlier. The data shows a housing market with a large divide between quick-selling homes and homes that sit, with overpriced homes staying on the market far longer. While pending home sales increased, deal cancellations increased 12.5% from the previous year as housing costs remain high and economic uncertainty persists.

US retail sales above expectations

Retail sales rose 1.7% in March, beating estimates of 1.4%, which was the fastest increase in over three years. Gasoline prices were a key driver, as they have spiked in the wake of the Iran conflict. Excluding the gasoline-related increase, the US consumer showed resiliency more generally, as well, with other retail sales continuing to show positive growth.

QUICK HITS

Preliminary global PMIs for April showed strong growth in manufacturing across all regions while services slowed.

US jobless claims for the week ending April 18 rose to 214,000, just ahead of the expected 210,000. The results indicate a labor market that remains stable with claims at historically healthy levels.

Canada’s CPI for March was up 2.4% year-over-year and 0.9% month-over-month, driven largely by the increases in gasoline prices. The core CPI Trimmed Mean printed at 2.2% year-over-year, lower than February and indicating that higher energy prices have not yet passed through to other items.

Japan’s core CPI for March increased 1.8% year-over-year, which matched expectations and was an acceleration from the 1.6% rate seen in February. Expectations are that the BoJ will not increase interest rates at its meeting next week.

Meta and Microsoft announced plans to make significant cuts to their workforces, with Meta expected to lay off 10% of its employees and Microsoft offering voluntary retirement to 7% of its US staff. The announcements come as both companies continue to redirect resources towards their AI investments.

Software stocks experienced volatility again this week following some disappointing earnings announcements. The AI disruption risk continues to weigh on the sector, which remains one of the worst-performing sectors year-to-date.

US consumer sentiment declined in April to 49.8, a record low and likely a result of concerns over the Iran conflict and potential for increased inflation. Consumers now expect prices to rise 4.7% over the next year.

EARNINGS NEWS

With about 28% of the constituents of the S&P 500 Index having reported, blended earnings per share (which combines reported data with estimates for those that have yet to report) rose 15.1% compared with the same quarter last year, according to data from FactSet. Blended sales rose 10.1% over the same period. 

THE WEEK AHEAD

Monday: Japan unemployment; Japan policy rate

Tuesday: US consumer confidence; US home prices

Wednesday: US FOMC; US housing starts; Eurozone confidence indicators; Japan retail sales

Thursday: US GDP; US PCE; eurozone GDP, eurozone CPI; BoE bank rate; Canada GDP; ECB meeting

Friday: US ISM manufacturing PMI

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Sources: MFS research, Wall Street Journal, Financial Times, Reuters, Bloomberg News, FactSet Research.