Daily Summary: Geopolitical tensions are back; markets in risk-off mode💡

The main factor driving market volatility

The dominant topic of the day was the expiring US-Iran ceasefire, which President Donald Trump described as highly unlikely to be extended. Trump explicitly warned that after the deadline on Wednesday evening, “bombs will go off,” and the Strait of Hormuz would remain closed until an agreement was signed, thereby halting approximately 20% of global oil shipments. Vice President JD Vance traveled to Islamabad for a second round of peace talks, though Iran initially did not officially confirm its participation, and Reuters/NYT reported late in the morning that the Iranian delegation nevertheless plans to arrive. The situation was exacerbated by the U.S. Navy’s decision to seize the Iranian cargo ship Touska in the Gulf of Oman after it attempted to bypass the blockade.

Geopolitics

Iran denied Friday’s reports by Axios claiming that part of a peace plan would involve transferring enriched uranium to the U.S. in exchange for $20 billion in frozen Iranian funds, and the Iranian Foreign Ministry stated that “the transfer of uranium was never on the table.” According to maritime traffic tracking data, only three commercial ships passed through the Strait of Hormuz today, while the strategic route was effectively blocked once again. The Bank of Japan is expected to keep interest rates unchanged in April, as the lack of prospects for de-escalation in the Middle East, along with Trump’s 2025 tariffs, is generating uncertainty about the Japanese economy, and the BOJ prefers a “hawkish pause” stance.

Macro data

Producer price inflation (PPI) in Germany returned to positive territory, beating expectations and rebounding to 2.5% month-over-month—the largest jump since September 2022—against a consensus forecast of 1.4%. The main drivers of the surprise were energy and petroleum product prices. The daily macro calendar for the U.S. was nearly empty, as Fed officials have already entered the quiet period ahead of the interest rate decision scheduled for April 29. This week, investors are awaiting tomorrow’s data on March retail sales in the US and the key hearing of Kevin Warsh, the nominee for the new head of the Federal Reserve, who has stated that “the Fed must remain within its mandate” and maintain its independence.

Earnings season and indices

The earnings season for S& P 500 companies for Q1 2026 has started well above expectations, with as many as 88% of companies that have already released their reports beating earnings-per-share forecasts, with the total beat rate coming in at 10.8% above expectations compared to the five-year average of 7.3%. European stock markets saw a sharp correction in response to the re-closure of the Strait of Hormuz, and the Stoxx 600 index fell by nearly 1.1%, with the largest declines recorded on the stock exchanges in Madrid (SPA35: down 1.3%) and Germany (DAX down 1.25%). On Wall Street, losses were much more limited, with Dow Jones futures down about 0.4%, and the S&P 500 and Nasdaq 100 down just over 0.3%, indicating that the market is not pricing in a catastrophic scenario. Among the sectors of the European Stoxx 600, only energy and defensive utilities were trading in the green, while the luxury sector (Essilor Luxottica down 3.3%, Louis Vuitton down 1.7%) and technology (SAP down 3.6%) were hit the hardest.

Shares

The standout performer of the session was TopBuild (BLD), whose shares soared more than 17% following the announcement of its $17 billion acquisition by the QXO conglomerate, representing a premium of over 23% compared to Friday’s close. Chipmaker Marvell Technology (MRVL) gained an impressive 7% on reports of advanced talks with Google regarding the design of two specialized AI chips, including a new-generation TPU, which the market interpreted as strengthening the company’s position in the lucrative computing infrastructure sector. American Airlines (AAL) fell about 3% after the company officially dismissed speculation about a merger with United Airlines, and the airline sector came under additional pressure from a sharp rise in fuel prices. Among the 35 S&P 500 companies hitting new 52-week highs were eBay, Ross Stores, AMD, Arista Networks, and Texas Instruments.

Currencies

The Australian dollar (AUD) was the undisputed leader in the foreign exchange market, ranking first among major currency pairs according to the currency strength index, gaining 0.65% against the USD and 0.18% against the NZD despite the tense geopolitical climate. At the other end of the spectrum were the US dollar (USD) and the Japanese yen (JPY), which recorded the day’s biggest declines, with the dollar index (USDIDX) retreating 0.12% to 97.87. The EURUSD pair held steady near Friday’s close at 1.178, gaining 0.46%, while GBPUSD rose 0.39% to 1.353.

Raw materials

Crude oil was the clear leader in gains, with WTI contracts rising more than 4.98% to $87.20 per barrel, while Brent crude broke through the $90-per-barrel mark, climbing nearly 3.8%. In contrast to this momentum, gold behaved surprisingly, failing to fulfill its traditional role as a safe haven and losing 0.93% to around $4,807 per ounce, which Morgan Stanley attributes to the risk of higher energy prices feeding into core inflation and reducing the likelihood of Fed rate cuts, thereby strengthening the USD, which exhibits an inverse price correlation with GOLD. Silver fell even more sharply, losing 1.94%. Natural gas (NATGAS) continued to rise, gaining 0.57% to $2.831.

Cryptocurrencies

Bitcoin was trading around $75,000 at the start of the week, up 1.85%, after breaking through the $78,000 mark on Friday for the first time since February. Strategy announced on Monday morning that it had purchased $2.5 billion worth of BTC last week, but shares of cryptocurrency-related companies were down, with Coinbase and Strategy each down about 1%, as the market corrected following a weekend marked by heightened risk aversion.