Published
13th April 2026
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The Cambridge Weekly
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Market sentiment improved last Wednesday after the announcement of a two-week ceasefire between the US and Iran, agreed in exchange for the safe passage of shipping through the Strait of Hormuz. Brent crude fell sharply on the announcement, dropping around 15% to below $95 per barrel, with the $100 level remaining a key psychological threshold for many investors. Equity markets responded strongly; both the FTSE 100 and S&P 500 gained around 2.5% on the day and the STOXX 600 rose almost 4%. Conversely, safehaven assets delivered a mixed response; gold edged slightly lower to around $4,800, partly reflecting a weaker US dollar. While the ceasefire marks a meaningful step forward, uncertainty remains high; oil prices are still roughly 40% above pre-war levels, and a persistent risk premium is likely to remain whilst the current global energy supply structure is unchanged.
Memorychip stocks experienced a difficult March; Bloomberg’s memory chipmaker index fell around 25%, its worst monthly decline since 2005. Sentiment deteriorated sharply after Alphabet released its “TurboQuant” algorithm, which claims to cut AI memory requirements sixfold. Micron fell nearly 20%, with shares in SK Hynix and Samsung also coming under pressure. This was compounded by higher energy costs linked to the conflict in the Middle East, which have increased operating expenses, alongside higher interestrate expectations that raise the cost of building AI infrastructure.
US Equity Market:
As noted above, news of the two-week ceasefire was well received by US markets. Both the S&P 500 and Nasdaq indices rallied upon the announcement, closing the week to Friday up 3.6% and 4.5% respectively. Despite the partial recovery, the S&P 500 index remains below its pre-conflict level.
Oil research group Kpler, expects US crude exports to reach record highs in April, driven by reduced supply form the Middle East. Their research projects a 33% increase in exports relative to March levels, a reflection of heightened demand from Asian customers.
Market sentiment on the strength of the US jobs market continues to oscillate as non-farm payrolls data released this week painted a positive picture. Over March, the US created 178,000 jobs, comfortably exceeding analyst expectations and more than offsetting February’s job losses. While robust employment numbers could justify further interest rate rises amid energydriven inflation, markets continue to expect the Federal Reserve to maintain its “waitandsee” stance.
UK Equity Market:
The FTSE 100 rallied over 2.5% into Wednesday last week, off the back of the ceasefire announcement. Gains were broad-based, led by Antofagasta being up over 13%, and EasyJet, Fresnillo and Rolls-Royce all surging more than 10%. Conversely, energy majors served as a drag on performance due to the resulting oil price decline, with BP and Shell both slipping more than 8%.
As well as being a key route for global oil supplies, a third of the world’s fertiliser typically passes through the Strait of Hormuz. As a result, fertiliser has also seen a sharp price rise recently. This, in addition to climbing diesel prices, has resulted in increased costs for farmers to grow and transport food across the UK. The Food and Drink Federation believe that this ceasefire does not end long-term uncertainty, and that recovery to supply chains and energy infrastructure could take between six months to a year and warn that UK food inflation could reach 9% before year-end.
Inflation, Interest Rates and Bond Markets:
Government bond yields fell across major markets as ratehike expectations were pared back, with the UK 10year and 30year gilts down around 20bps and 15bps respectively. Shortdated UK yields also fell, but remain comfortably above the base rate, signalling that inflationary damage is already priced in.
In Europe, government bonds staged their sharpest rally since 2023 last Wednesday, as traders reined in bets on interest rate rises following falling oil prices. Markets now price in the ECB enacting two quarter-point rate increases this year, down from three last Tuesday, with the first rise expected in June. German 10-year yields declined by 14bps to 2.94%. US Treasury yields also moved lower, albeit more modestly, as the 10-year dropped 7bps to 4.28%; a reflection of the country’s relative energy selfsufficiency compared to Europe.
What’s on the horizon
Despite the ceasefire, shipping through the Strait remains limited, with fewer vessels transiting last Wednesday than during some of the heaviest fighting. Markets will continue to follow the evolving daily newsflow from both the US and Iran, to gauge when a resolution may be reached.
Earnings season for the big six US banks commences today, led by Goldman Sachs. Healthy earnings are expected, with double-digit increases in some cases, on the back of strong M&A and trading activity across Q1. On the economic release front, China is due to report its trade balance tomorrow, accompanied by US PPI, while Chinese and UK GDP figures are expected on Thursday. The US is set to release the weekly change in the number of barrels of commercial crude oil held by US firms on Wednesday. Inventory levels will be closely watched by investors amid the ongoing energy shock in recent weeks.
You can read our Quarterly review here: Q1 2026
This material has been written on behalf of Cambridge Investments Ltd and is for information purposes only and must not be considered as financial advice. We always recommend you seek financial advice before making any financial decision.
Past performance is not a guide to future performance.
The value of your investments can go down as well as up and you may get back less than you originally invested.
Source of financial market data: MorningstarDirect.
