Friday’s fractional S&P decline — a single basis point past flat at -0.11% — is the footnote on a week that will be remembered as the ceasefire trade’s first real test. The S&P gained 3.4% for the week, its best performance since November. The Nasdaq added 4.1%. The Dow rose 3%. The VIX collapsed from above 25 at Monday’s open to 19.49 at Friday’s close — pre-war implied volatility territory. And West Texas Intermediate crude, trading near $111 the previous week, closed at $98.45 — a 12% weekly decline representing the war premium beginning its unwind. The ceasefire held. The market believed it. The question heading into Saturday morning is whether Islamabad makes that belief durable.
Friday’s session split along exactly the line the week established. Nasdaq +0.35%, driven by AI infrastructure and semiconductor names. S&P -0.11% and Dow -0.56%, dragged by energy sector pullbacks and rate-sensitive names absorbing the hot headline Consumer Price Index (CPI). The morning’s soft core print (+0.2%, below the 0.3% consensus) prevented any real selloff — the Federal Reserve kept its cover, yields held at 4.31%, and the session closed orderly. All three probability gates — ceasefire intact, CPI well-behaved at core, carry stable — survived the day.
The week’s thesis going into Saturday: the ceasefire-day rally of Wednesday April 8 (+2.51% S&P) has been mostly preserved through two subsequent sessions of conflicting data, a hot headline inflation print, and ongoing Lebanon violations. The market’s resilience is the signal. Vance is in Islamabad. The Watch publishes live as Saturday’s talks develop.
| Asset | Close | Change | % Change | Context |
|---|---|---|---|---|
| S&P 500 | 6,816.89 | −7.77 | −0.11% | Fractional dip. Energy and rate-sensitive sectors weighed. Nasdaq kept the index from steeper losses. Best week since November despite Friday’s pullback. |
| Dow Jones | 47,916.57 | −269.23 | −0.56% | Biggest daily decline of the three. Energy and traditional industrials pulled back as the ceasefire oil unwind continued. Weekly gain ~3% still intact. |
| Nasdaq | 22,902.89 | +80.47 | +0.35% | Sole green major index. AI infrastructure (CoreWeave, Nvidia, Meta) and semiconductor names drove outperformance. Week’s bifurcation thesis confirmed at the bell. |
| VIX | 19.49 | −1.55 | −7.37% | Fear unwound all week. From above 25 at Monday’s open to 19.49 Friday close — pre-war territory. Options market pricing meaningful but not catastrophic uncertainty heading into Islamabad. |
| WTI Crude | $98.45 | +$0.58 | +0.59% | Slightly up Friday but −12% on the week. Ceasefire trade dominant. Hormuz still functionally closed. Saudi Arabia production down ~600K bpd from facility attacks. |
| Brent Crude | $96.66 | +$0.74 | +0.77% | Tracking WTI closely. Both benchmarks holding $96–$99 as market awaits Islamabad before fully pricing a Hormuz reopening. |
| Gold | $4,780 | −$38 | −0.79% | Risk-on rotation. VIX declining = safe-haven demand softening. Gold still +46% year-over-year. Soft core CPI stabilizes real yields — gold-neutral near term. |
| 10Y Treasury | 4.31% | — | — | Essentially unchanged. Soft core CPI (+0.2%) confirmed Fed has cover to hold without urgency. Yields stable = equities can hold current valuations. |
| Dollar (DXY) | ~98.71 | Flat | — | DBS: “Despite Brent’s $100–$120 Q1 spike, DXY held its 96–101 range.” Dollar haven response muted vs. 2022 — Fed has no urgency to tighten into the energy shock. |
| Bitcoin | $72,788 | +$1,509 | +2.12% | Held and extended gains through the full session. Ceasefire optimism + ETF structural inflows sustained the bid. Highest close since before the war began. |
| Ethereum | ~$2,210 | Flat | — | Near flat. Structural ETF support intact. BlackRock ETHA cumulative inflows above $11.6B through early April. |
Friday’s close was a clean read. Nasdaq +0.35% on AI infrastructure and semiconductor momentum. S&P -0.11% as energy names continued their ceasefire unwind and rate-sensitive sectors absorbed the hot headline Consumer Price Index. Dow -0.56% as traditional industrials and energy heavyweights pulled the blue-chip index lower. This is the week’s thesis confirmed at the bell: companies with contracted multi-year revenue held green. Companies whose valuations depend on rate-cut optionality or oil prices absorbed the week’s cross-currents.
The weekly scorecard demands context. S&P +3.4% and Nasdaq +4.1% are the best weekly performances since November 2025. This happened against: $98 oil, a 3.3% annual CPI print, a technically-intact-but-stressed ceasefire, Hezbollah rockets resuming, and an enrichment standoff heading into Islamabad. That the market held — and held with conviction Monday through Thursday before Friday’s small pullback — is a genuine signal of how much war premium was already embedded in prices before the ceasefire announcement.
The VIX close is the cleanest single-number summary of the week. Monday open: above 25, a war-level reading. Friday close: 19.49, pre-war territory. Not complacency — 19.49 still prices meaningful risk. But not panic. That shift in five sessions is the week’s real story. Islamabad Saturday will either confirm it or violently reverse it.
The March Consumer Price Index (CPI) told two stories simultaneously. Headline CPI rose +0.9% month-over-month — the largest monthly jump since 2022 — driven almost entirely by energy. The gasoline index surged 21.2% in March, accounting for nearly three-quarters of the entire headline increase. Annual inflation reached 3.3%, the highest since May 2024. Markets initially dipped at 8:30 AM. Then the core number landed.
Core CPI — excluding food and energy, the measure the Federal Reserve (Fed) weights most heavily — rose just +0.2% in March, one tenth below the 0.3% consensus. Annual core came in at 2.6%, also below expectations. Medical care, personal care, and used vehicles all declined. The inflation this CPI captured is almost entirely oil. And oil is already unwinding. Goldman Sachs Asset Management’s co-Chief Investment Officer put it precisely: “We believe the Fed will look through the energy-driven noise so long as these factors hold.”
The path forward is conditional. If Islamabad produces a Hormuz reopening timeline, oil falls through spring, and the rate-cut calendar reopens. If Islamabad fails, the headline inflation trend accelerates into April and May data, core follows the energy spike with a lag, and the Federal Open Market Committee (FOMC) faces a difficult decision at its June 17–18 meeting. Schwab’s fixed income research noted plainly: “The longer oil stays elevated, the greater the likelihood it filters into core CPI.” The March PCE (Personal Consumption Expenditures) print on April 26 is the next inflation gate.
In any other week, CoreWeave (CRWV) gaining 29.3% in five sessions would be the market’s lead story. This week it shared the front page with a ceasefire. Thursday: Meta Platforms expanded its existing CoreWeave agreement from $14.2B to $35.2B through 2032 — a $21 billion single-week add. Friday: Anthropic announced a new multi-year deal for CoreWeave to host Claude model deployments. CoreWeave now counts all four of the top AI model developers — Meta, OpenAI, Google, and Anthropic — as customers. No other cloud provider can claim that roster. CRWV closed Friday at $95.90, +4.2% on the day and +29.3% on the week.
The implications extend well beyond CoreWeave. Amazon’s Chief Executive Andy Jassy confirmed AWS AI revenue running at $15B annually with Trainium2 chips sold out. Meta confirmed $115B–$135B in 2026 capital expenditures (capex), unchanged despite the war and oil spike. CoreWeave targets $30B–$35B in 2026 capex — more than double 2025’s $14.9B. Gartner projects $1.3 trillion in global semiconductor spending in 2026. These commitments were made and confirmed while WTI (oil) was near $98 and annual inflation was printing at 3.3%. The AI infrastructure capex cycle is structurally divorced from the current macro environment.
The week’s AI story is the bifurcation story in its purest expression. Salesforce fell 3.88% Thursday. IBM fell 2.3%. Microsoft fell 1.33%. Rate-sensitive software businesses gave back ground. CoreWeave, Meta, and Amazon extended gains. The distinction the market drew — contracted multi-year AI infrastructure demand vs. rate-cycle-dependent software multiples — is the dominant investment theme heading into Q1 earnings season. Goldman Sachs (Monday April 13) and JPMorgan (Tuesday April 14) report first. Their AI infrastructure commentary will define the earnings season narrative more than any single earnings-per-share number.
US Vice President JD Vance arrived in Islamabad on Friday alongside Special Envoy Steve Witkoff and Jared Kushner. Iran’s delegation — Foreign Minister Abbas Araghchi and Parliament Speaker Mohammad Bagher Ghalibaf — has been on the ground since Thursday evening. Pakistan’s capital is under full security lockdown. These are the highest-level direct US-Iran contacts since 1979.
Three structural fault lines enter the room: Lebanon — Hezbollah resumed rockets Thursday, Israel struck Lebanese infrastructure. Iran insists Lebanon falls within ceasefire scope; the US and Israel say it never did. Uranium enrichment — Trump’s stated non-negotiable. Iran publicly insists enrichment is a sovereign right. Hormuz tolls — Iran’s reported $1/barrel cryptocurrency charge on tankers. Trump warned against it. No published protocol exists.
Markets do not need a final peace agreement from Islamabad. They need one thing: agreed language on Hormuz reopening with a timeline. That outcome — even a vague commitment to begin mine clearing and resume transit within a defined window — would trigger a WTI selloff, an S&P gap up, and VIX compression at Monday’s open. Goldman’s Q4 2026 WTI base case of $67 assumes full reopening over roughly one month.
A public breakdown is the mirror scenario: WTI back above $105, S&P Monday open -2%+, VIX back above 25. A non-result — talks continue, no communiqué, next meeting scheduled — is roughly neutral with a slight negative bias. The Watch publishes live as Saturday develops. The three fault lines are known. Which one breaks first determines the headline.
West Texas Intermediate crude closed at $98.45, up $0.58 on the day but down roughly 12% from pre-ceasefire levels near $111. That 12% decline is the market pricing the ceasefire announcement. The remaining $98 is the market pricing Hormuz still closed. It is a precise and honest read. Goldman Sachs, whose Q4 2026 WTI base case is $67 (full reopening + mine clearing over one month), estimates Brent will average above $100 per barrel if Hormuz remains closed another month. Abu Dhabi’s oil chief confirmed this week: the strait is not open. Iraq confirmed no Iraqi ships have crossed since ceasefire day one. South Korea, with 26 vessels stranded, sent a special envoy to Tehran this weekend to negotiate safe passage terms directly.
Saudi Arabia confirmed this week that facility attacks have reduced production capacity by approximately 600,000 barrels per day and cut throughput on the East-West Pipeline — the principal Hormuz bypass route — by roughly 700,000 barrels per day. This is the under-covered story of the week. Even if Hormuz reopens cleanly from Islamabad, the bypass capacity has been materially degraded. Oil supply does not snap back to pre-war levels on a ceasefire alone.
| Market | Status | Close Context |
|---|---|---|
🇯🇵 Japan (Nikkei 225) Asia · Closed |
+1.84% |
Nikkei 56,924.11 (+1.84%). Best weekly gain in months on ceasefire optimism and energy relief. Japan year-to-date +5.5% — best-performing major index globally through April 6. Japan is among the largest beneficiaries of a Hormuz reopening given extreme oil import dependence. |
🇭🇰 Hong Kong (Hang Seng) & China Asia · Closed |
+0.55% |
Hang Seng 25,893.54 (+0.55%). Shanghai Composite 3,986.22 (+0.51%). China liquidity support and AI infrastructure demand driving HK-listed names. Broadly green on Islamabad optimism and global trade normalization hopes. |
🇰🇷 South Korea (KOSPI) Asia · Closed |
+1.40% |
KOSPI 5,858.87 (+1.40%). Seoul sent a special envoy to Tehran this week to negotiate safe passage for 26 stranded vessels — a direct measure of South Korea’s Hormuz exposure. Samsung and SK Hynix bounced on AI chip demand. |
🇪🇺 Europe (DAX, CAC 40, FTSE) Europe · Closed |
DAX +0.20% CAC +0.01% FTSE -0.03% |
European markets closed mostly flat ahead of the Islamabad weekend. DAX 23,803.95 (+0.20%) led on energy import relief expectations. CAC 40 8,259.60 near flat (+0.01%). FTSE 100 10,600.53 essentially unchanged (-0.03%) — UK energy sector acting as a natural hedge. STOXX 600 closed at 614.84 (+0.37%). Europe tracked Islamabad optimism all week without the US CPI headwind. |
🇸🇦 Gulf / Saudi Arabia Closed |
Cautious |
Tadawul muted. Saudi Arabia confirmed facility attacks cut production by ~600K bpd and East-West Pipeline throughput by ~700K bpd. Gulf markets carry asymmetric Islamabad exposure: a deal supports regional stability but removes the energy price premium benefiting Gulf sovereign wealth positions. |