Market Minute: April 9th, 2026 - Relief Rally, Inflation Holds, and Geopolitical Risks Remain
The ceasefire brought a tremendous relief rally on Wednesday. However, Israel continues to confront Hezbollah, and the question of the free flow of marine traffic through the Strait of Hormuz remains unresolved.
Overnight, the U.K. pressed for a toll-free strait, and we continue to believe this vital narrow waterway remains the major leverage point still held by Iran. The political issues are highly layered and will take time to sort out.
The U.S. appears to feel that NATO did not fully support the action in Iran aimed at eliminating the regime’s nuclear weapons capabilities. Previous attempts at appeasement did little to thwart Iran’s ambitions.
We will leave it to the political pundits to fully delve into the broader implications. However, it does seem clear that the U.S. stance remains firmly centered on preventing a nuclear bomb, while Iran will likely do whatever it can to gain some economic benefit—through tolls or otherwise—in order to truly bring about a ceasefire.
Inflation in Line, But Energy Pressures Loom
As I write this on the morning of April 9th, core inflation was just released and showed a 3% annual growth rate, which is in line with expectations.
It is quite possible that the recent surge in energy prices has not yet been fully felt throughout the economy, and we may see that pressure come through in inflation reports over the next several months.
Equities are pointed to a slightly lower open, following some softness in Europe today. Oil has rebounded from its lows, with West Texas Intermediate trading above $99 this morning, while the 10-year Treasury yield is up slightly to above 4.29%.
In times of global turmoil, one might typically expect the 10-year Treasury to rally as a safe haven. We believe sticky inflation is the countervailing force that has prevented that haven trade from fully materializing.
Focus Turns to Earnings and Consumer Strength
We remain focused on the nature of the employment statistics and will be closely watching how earnings reports stack up this quarter for evidence of continued consumer spending activity.
We do believe the situation in Iran will take a few more turns before it is settled. After that, attention will likely shift to the response from NATO allies and whether any changes in global alliances begin to emerge.
A lot to chew on.
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