S&P 500 Rebounds with Iran War Ceasefire, Falling Oil Prices

Investors reacted positively to the after the market close news of a ceasefire between the Iran war combatants on 7 April 2026. The S&P 500 (Index: SPX) bounced up 2.5% on the news the following day before proceeding to increase its gains in the remainder of the trading week. By the time the market closed on Friday, 10 April 2026, the index stood at 6,816.89, up a little under 3.6% from its previous week’s level.

The news of the ceasefire had an immediate effect on oil prices. Crude oil futures (CL1:COM) had peaked at $117.62 per barrel earlier on 7 April 2026, but plunged at low as $94.62 after the announcement. Crude oil futures went on to spend most the rest of week in the mid-to-upper $90 per barrel range.

The drop in oil prices helped shape expectations for how the Federal Reserve will set interest rates in the U.S. While the CME Group’s FedWatch Tool continues to foresee no interest rate changes through the end of 2026, it does see a growing chance for a quarter point rate cut in 2027, with the most likely timing being near the end of 2027-Q2, three months earlier than projected in the preceding week.

In this latest update of the alternative futures chart, the S&P 500 is about four percent below the central trend line of the redzone forecast range we added to the chart after Friday, 20 February 2026.

We had added the redzone forecast range to the chart, fully shown in this version, to compensate for the year-old echoes of two major volatility events, which arise from the dividend futures-based model‘s use of historical stock prices as the base reference points for its projections of the future. In this case, that was the echoes from February 2025′s DeepSeek AI shock and President Trump’s April 2025′s “Liberation Day” tariff announcements. That redzone forecast range turned out to be ideally suited to use as a counterfactual to measure the impact of the Iran war geopolitical event on U.S. stock prices by indicating where they would reasonably have been in the absence of that event.

The rest is just keeping up with how the flow of news related to the Iran war’s developments. Here are the week’s market moving headlines:

Monday, 6 April 2026

• Signs and portents for the U.S. economy:

• US employment growth rebounded in March; unemployment rate falls to 4.3%
• Oil prices rise as US-Israeli war with Iran continues to disrupt supply

• OPEC+ agrees in principle on theoretical oil output increase
• US crude premiums climb to record levels as Asia, Europe compete for supply

Fed minions not keeping up with oil producer plans, worry about inflation:

• Fed’s Logan says US oil producers unlikely to provide near-term relief for consumers

• Operators rethink ‘stay the course’ as sustained $100 oil more probable

Fed’s Goolsbee, Hammack say inflation is flashing ‘orange,’ or worse

Bigger trouble, stimulus developing in China:

• Trump administration proposes expanding Chinese tech gear crackdown
• China’s Space Pioneer says reusable rocket’s maiden flight fails
• China’s Xi urges faster development of new energy system

IMF wants BOJ minions to keep turning the screws:

• IMF urges BOJ to keep raising rates even as Iran war poses new risks

ECB minions say oil inflation may force them to drop perfect monetary policies:

• ECB’s Stournaras says euro zone monetary policy will depend on size of energy disruption

Wall Street ends higher as traders price in de-escalation, while Iran rejects ceasefire proposal

• Wall St ends higher as investors parse US-Iran negotiations, threats

• US to raise Medicare Advantage payments to insurers by 2.48% in 2027, insurance stocks surge

Tuesday, 7 April 2026

• Signs and portents for the U.S. economy:

• Physical oil prices hit record highs near $150 a barrel as Hormuz crisis worsens

• From falling U.S. wealth to Indian factory closures, oil shock raises global recession risk

Fed minions not so sure what they’ll do next with monetary policies, claim they’re not bothered by not yet having a new chief minion:

• Goolsbee says stagflationary shock of Iran war puts Fed in a bind

• Fed’s Jefferson sees risks to both employment, inflation

Fed’s Williams: FOMC leadership not in question amid slow Warsh confirmation

• Fed’s Williams says Middle East war will drive up inflation – Bloomberg

Bigger trouble, stimulus developing in China:

• Chinese pigs fed new menu as Beijing weans farmers off US soy
• China’s central bank buys the most gold in a year as Iran war slashes prices
• China curbs domestic fuel price hike again to soften impact of surging oil prices

BOJ minions hellbound to hike Japan’s interest rates:

• BOJ to raise rates by July on mounting price pressure, ex-board member says

Bigger trouble developing in the Eurozone as ECB minions start to think they will need to ditch their perfect monetary policy:

• Euro zone growth slows to nine-month low on surging costs, PMI shows
• Inflation scars risk quickly lifting expectations; ECB must be ready to act: policymaker

S&P 500, Nasdaq crawl out of red territory as Iran is reportedly reviewing two-week ceasefire deal

• Wall Street closes mixed, with signs of progress as Trump’s Iran deadline draws near

• Why this oil rally isn’t crashing stocks—Deutsche Bank breaks it down

Wednesday, 8 April 2026

• Signs and portents for the U.S. economy:

• Trump announces two-week ceasefire as Iran says talks to begin soon

• Oil slides below $100 after Trump announces two-week ceasefire

US banks could release $320 billion in capital with new draft rules, analysts say

US mortgage rates edge down to 6.51%, MBA says

Fed minions shocked to find rate cuts back on the table after Iran war ceasefire:

• Fed rate cut bets revived, a bit, by Iran war ceasefire
• Fed minutes of March meeting could flesh out how policymakers view war risks to economy

• Fed minutes show growing openness to rate hikes at March meeting

Fed’s Daly says US economic fundamentals in a ‘good place’

Bigger trouble, smaller stimulus developing in China:

• Trump threatens 50% tariffs on countries supplying Iran with weapons
• Global banks scale back China rate-cut calls, see policy rate on hold this year
• China’s Xi urges demand-driven growth in services industry

Bigger trouble developing in Eurozone:

• Germany’s February industrial orders up, albeit far below forecasts

Wall Street jumped over 2% and closed higher as U.S. and Iran agree to conditional ceasefire

• Wall Street ends sharply higher on US-Iran ceasefire

Thursday, 9 April 2026

• Signs and portents for the U.S. economy:

• Oil pares gains to close up 1% as Israel plans peace talks with Lebanon
• US labor market holds steady; inflation firmer before Iran war

• US PCE inflation picks up in February; consumer spending solid

Iran war raises demand for US fuel, boosting Gulf Coast refining margins

US fourth-quarter GDP growth revised lower to a 0.5% rate

Bigger trouble, stimulus developing in China:

• China’s car exports accelerate despite disruption from Mideast crisis
• China’s March bank lending seen surging on post-holiday rebound

BOJ minions / Bigger trouble developing in Japan:

• BOJ chief says Japan’s financial conditions remain accommodative

U.S. stocks gain for a second day while U.S.-Iran resolution is still uncertain

• Wall Street ends higher as Middle East peace talks lift sentiment

Friday, 10 April 2026

• Signs and portents for the U.S. economy:

• Inflation held sticky at 3% as U.S. headed into war with Iran, key Fed gauge shows

• US inflation tripled last month on record spike in gas prices
• VIEW March inflation report, first to show impact of war, is in line with expectations

Oil ends lower ahead of U.S.-Iran ceasefire talks, posts steepest weekly loss since 2022

Fed minions point to tariffs contributing to inflation as it rises to hit their real target again, say it will take longer to lower it:

• Fed will need to explain why current inflation jump differs from 2022 surge

• Tariffs drove the bulk of core goods inflation, added 0.8% to core PCE, a Fed study finds
• Background:

• Tallying Up Tariffs: The Effect on Inflation
• What Is the Fed’s Real Inflation Target?

Exclusive: Fed’s Daly says oil shock means getting inflation down takes longer

Sudden inflation arrives in China:

• China’s factories snap years-long deflation spell on Iran war price shock

BOJ minions getting excited to hike Japan’s interest rates again:

• Japan wholesale inflation jumps, BOJ vows vigilance to stagflation risk
• BOJ will set policy with eye on scale, length of Iran war shock, deputy governor says

ECB minions excited for financial power grab in Eurozone:

• ECB backs EU plan to centralise financial supervision

Wall St ends mixed, notches weekly gains as investors parse Middle East negotiations

• U.S. stocks take weekly gains despite continued Middle East conflict

The Atlanta Fed’s GDPNow tool forecast of real GDP growth in the recently ended quarter of 2026-Q1 slowed to +1.3%, declining from the +1.6% growth anticipated a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a suit-wearing Wall Street bull looking relieved that oil prices are down and the S&P 500 is up, while a suit-wearing bear looks worried reading a newspaper with the headline ‘WILL CEASE FIRE HOLD?’ The scene takes place on a city street with skyscrapers in the background.”