Weekend Update #273
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Equities posted their strongest week since May 2025 as the seven-week Iran war moved through negotiations and toward a resolution. The S&P 500 strung together 5 consecutive positive days for a +4.54% weekly gain. Following last week’s ceasefire announcement by the U.S. and Iran, both sides’ commitment to peace looked to be on shaky ground through the weekend. Iran requested a full ceasefire between Israel and Lebanon, and the U.S. instituted a naval blockade in the Strait of Hormuz to stop Iranian exports. Trading on Monday gained momentum as President Trump stated Iran was still involved in negotiations, and as the U.S. Navy moved ships to establish control, Iran did not retaliate. On Thursday, Israel and Lebanon agreed to a 10-day ceasefire to support negotiations. On Friday, reports detailed that concrete progress is being made in talks around the key points of release of frozen Iranian funds, uranium extraction from Iran, and the length of a moratorium on enrichment for the country. Iran announced Friday that the Strait of Hormuz was “completely open” for commercial traffic, catalyzing a significant drop in energy prices, but a full return to normal traffic volumes may take time as negotiations progress and confidence in safe passage is restored.
In economic news for the week, the March Producer Price Index report showed significantly cooler inflation than economists had estimated. MoM PPI rose 0.5% compared to the 1.1% expected, while excluding food and energy, the index rose just 0.1% compared to the 0.4% estimate. NFIB’s Small Business Optimism report fell more than expected in March as business expectations plunged and inflation concerns rose. Initial Jobless Claims for the week ended April 11 were 207,000, lower than the 213,000 estimate, but Continuing Claims ticked up to 1.818 million. With positive inflation news and progress in U.S.-Iran negotiations, the U.S. 10-year Treasury yield fell to 4.25%, a low since mid-March, while markets priced in a slightly greater probability of a Federal Reserve rate cut this year.
Banks kicked off earnings season this week with strong results in trading and investment banking revenue, but management teams broadly struck a cautious tone about macroeconomic impacts from the war in Iran. TSMC reported quarterly revenue up 35% YoY to $35.9 billion while raising guidance to ~30% revenue growth. TSCM described AI chip demand as “extremely robust”. Intel shares continued to build investor confidence, with shares up 55% over the past month. Netflix disappointed on Friday in its first earnings call following the Warner Bros bidding war saga, with shares falling almost 10%. Allbirds stock rose 352% this week following the sneaker-maker’s announcement of its pivot to an AI infrastructure company, rebranding to NewBird AI, with aspirations to become a GPU-as-a-Service provider over the long run. Anthropic continued to make headlines this week on its tight-knit release of the Claude Mythos model, which threatens to expose major vulnerabilities across software infrastructure if not thoughtfully rolled out. Anthropic also debuted a more limited Claude Opus 4.7 release and announced a digital design tool that sent Figma shares down 7% on Friday.
This weekend, market participants will look for further information out of U.S.-Iran talks, reportedly set for Sunday in Islamabad. Investors will look to a host of earnings calls next week to gauge whether there is still more room to run in the current market rally.
Friday’s Close (Weekly Performance)
S&P 500 7,126.06 (+4.54%)
Nasdaq 24,468.48 (+6.84%)
Dow Jones 49,447.43 (+3.19%)
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