War, Ceasefire, Oil Crash. Markets Somehow Survived (Apr 6 to 11)

Let's review.

Monday opened with the President of the United States threatening to bomb Iranian power plants and bridges by Tuesday at 8 PM. Markets responded by... going slightly green. Because geopolitical threats are now background noise. The same way you learned to ignore your office smoke alarm every time someone microwaves salmon.

Tuesday was fingernail-chewing theater. Intraday reversals. Contradictory headlines are dropping faster than traders can read them. The S&P and Nasdaq each squeaked out a 0.1% gain. The lifeline? Pakistan's PM proposed extending the ceasefire. A diplomatic Hail Mary. Markets treated it like gospel.

Then came Wednesday. And Wednesday came for everyone.

After Tuesday's close, the US bombed Kharg Island. Oil spiked to ~$114/barrel. Trump threatened that "a whole civilization will die tonight." Then. A two-week ceasefire was announced. The Strait of Hormuz would reopen. Futures went vertical overnight.

Wednesday's session: S&P +2.3%. Nasdaq +2.8%. Dow +2.9%. Crude oil collapsed $18.45 in a single session to $94.40/barrel. That's a 16.4% single-day drop. Energy shareholders found this considerably less exciting than the rest of the market.

The market reclaimed its 200-day moving averages. Industrials popped 3.8% on airline optimism. Carnival surged into double digits because, apparently, lower oil prices make people immediately start fantasizing about buffets at sea.

Translation: Six weeks of existential dread. One ceasefire announcement. Collective exhale.

The numbers sound too clean for the chaos that produced them.

Every single S&P 500 sector finished higher. Except energy. Energy gave back -4.1% as crude fell nearly $15/barrel. The market's not-so-subtle way of telling oil to hand the credit card back.

The standouts: Communication services and consumer discretionary, both +5.8%. Information technology at +4.8%. But the real trophy went to semiconductors. The PHLX Semiconductor Index surged +13.5% on the week. AI infrastructure demand doesn't take news cycles off. It doesn't take anything off.

Software? Rough week. The iShares Expanded Tech-Software ETF dropped -7.1%. One person's AI enthusiasm is another sector's existential crisis. Sound familiar?

Year-to-date, all three major indexes are still red. S&P -0.4%. Nasdaq -1.5%. Dow -0.3%. Last week's gains weren't headline candy. They were portfolio CPR.

If Wednesday was euphoria, Thursday was the morning after.

The Strait of Hormuz? Still largely closed to tanker traffic. Israeli strikes in Lebanon? Continuing. Iran's commitment to the truce? Let's call it "conditional." The diplomatic equivalent of shaking hands while making aggressive eye contact.

Markets wobbled. Then, a Reuters report dropped: Israeli PM Netanyahu directed aides to open negotiations with Lebanon. Midday lifeline. Equities climbed. Oil slipped.

This ceasefire has more asterisks than a pharmaceutical commercial.

March CPI came in at +0.9% MoM. The estimate was +0.7%. The hottest single-month print since 2022. Almost entirely driven by a 10.9% surge in the energy index.

Silver lining, if you squint: core CPI landed at +0.2%. Better than feared. Energy-driven inflation hasn't burrowed into the broader basket. Yet.

Year-over-year CPI now sits at +3.3%, up sharply from February's +2.4%.

University of Michigan consumer sentiment? 47.6 against a 52.0 estimate. A massive miss. Though the survey director noted nearly all responses came in before the ceasefire. May's reading could look different. Could. The most dangerous word in finance.

Friday's close: S&P -0.1%. Nasdaq +0.4%. Dow -0.6%. Banking stocks pulled back ahead of earnings. The party was technically still going. But someone had turned the music down.

Here's the thing. The most fascinating story last week wasn't geopolitics. It was a civil war inside the tech sector.

The winners: Chipmakers. The PHLX Semiconductor Index surged 13.5%. Fueled by easing geopolitical sentiment. Amazon CEO Andy Jassy's shareholder letter signals a massive investment in AI infrastructure. Taiwan Semiconductor is reporting record Q1 revenues, confirming AI chip demand is immune to basically everything. Amazon announced plans to invest $25 billion in data centers in Mississippi. Meta expanded its $21 billion AI infrastructure deal with CoreWeave. Sandisk posted monster gains. Memory storage is the jet fuel of the AI buildout. BofA raised its 2026 global semiconductor revenue forecast to $1.3 trillion. A 20% CAGR toward $2 trillion within four years. Numbers that require a moment to sit with. And possibly a stiff drink.

The losers: Software. And the culprit has a name. Anthropic.

The launch of the Claude Mythos Preview model triggered consecutive days of selling in the software sector. Investors ran the math: if frontier AI can do the work of Cloudflare, Okta, CrowdStrike, ServiceNow, and Palantir, maybe those premium valuations need a serious conversation. The iShares GS Software ETF fell -7.1%.

ServiceNow dropped -7.86% on Thursday. Palantir fell more than 7% after Michael Burry publicly shorted the stock. His thesis? Claude is "eating Palantir's lunch." Plug-and-play government AI versus Palantir's human-labor-heavy consulting model.

The pattern is now a formula. Every major Anthropic release has its own sector of victims. Previous casualties: HR software. Legal tech. Graphic design platforms. Cloud sales tools.

Trump even posted in support of Palantir on social media. A new category of market intervention that's going to need its own regulatory framework someday. Probably.

Chicago Fed President Austan Goolsbee said the quiet part out loud: stagflation. The ugly combination of slowing growth and accelerating inflation makes central bankers visibly squirm on camera.

He compared the setup to 2022. COVID supply disruptions hadn't unwound before Russia's invasion of Ukraine sent energy prices soaring. Now it's happening again with Iran. He called himself "cautious-slash-nervous." Translation: deeply concerned but constitutionally obligated to sound measured.

The data backs him up:

Spoiler: The Fed isn't coming to save you.

Jamie wrote a novel. Here's what matters.

He flagged inflation as the "skunk at the party" if prices reaccelerate. He proposed doubling the Earned Income Tax Credit to protect workers displaced by AI. Because the AI labor displacement narrative has graduated from "theoretical" to "statistically measurable."

Goldman Sachs put a number on it: AI is causing a net drag of 16,000 jobs per month and pushing the unemployment rate up by 0.1 percentage points. Displaced tech workers are spending an additional full month on job searches. They're landing in what Goldman diplomatically calls "occupational downgrading." Translation: fewer analytical skills required. More routine. Less money.

OpenAI, not to be outdone, proposed a fresh industrial policy agenda. Rebalance the tax base toward capital revenues. Expand healthcare and retirement access. Translation: the industry that built the disruption is volunteering to help clean up the mess. How generous. How very PR-forward.

Delta Air Lines (DAL): The most-watched early-season print. CEO Ed Bastian delivered a surprisingly bullish tone. "Broad strength across customer segments, geographies, and products." Positive unit revenue growth in economy cabin for the first time in over a year. Even with fuel surcharges and baggage fee increases, their corporate travel survey showed 85% of respondents expect Q2 spending to be flat or higher. Business travelers are absorbing the cost of this war in their expense reports and moving on. The stock surged 7.85% Wednesday. ✅ Beat.

Levi Strauss (LEVI): The week's unexpected hero. A 25% surge in iconic 517 jean sales. The catalyst? The "Love Story" show on Hulu/FX spotlighting Carolyn Bessette Kennedy's fashion. The "CBK summer" social media trend is generating actual revenue. Consumer behavior is always stranger and more specific than any macro model predicts. ✅ Upside Surprise.

Constellation Brands (STZ): Withdrew its entire fiscal 2028 outlook. Weaker consumer demand. Higher prices are squeezing wallets. A candid acknowledgment that premium consumer spending is softening. ⚠️ Withdrew Guidance.

Taiwan Semiconductor (TSM): Record Q1 revenues. AI chip demand confirmed immune to geopolitical disruption. Sparked broad semi rallies. AMD +3.55%. NVDA +2.63%. ✅ Beat.

Next Week: Goldman Sachs (GS) and Citigroup (C) kick off major bank earnings. Goldman was notably resilient on Friday at +0.45%. Investors want guidance on credit quality and capital markets activity. The real question: how honest will they be?

The prediction market scoreboard:

Gold ranged between ~$4,743 and $4,802 per ounce last week. Let that number sink in. Gold was around $3,083 one year ago. That's a 54% gain over twelve months.

The ceasefire barely dented it. A modest dip in Wednesday's risk-on sentiment. Then a quick recovery. Because a two-week ceasefire, sticky CPI, and a Fed on hold aren't exactly conditions that make you sell your financial insurance policy.

Gold closed the week near $4,748. A level that would have been science fiction eighteen months ago.

The tailwinds are a three-headed monster: persistent geopolitical uncertainty. Above-target inflation. A central bank that can't cut rates. If the Strait stays disrupted and inflation prints stay hot into May, the question isn't whether gold holds. It's whether the market has the stomach for $5,000.

The housing market is stuck in the same frustrating trap that's defined it for two years. Rates high enough to hurt. Not quite high enough to kill demand.

The 30-year conventional mortgage hovered around 6.25–6.36%. Flat week-over-week. Dramatically elevated from the sub-6% rates some borrowers found earlier in 2026. Before the Iran war, the macro landscape was rewritten.

Homebuilder stocks got a brief Wednesday joy ride on ceasefire hopes. Lower oil. Maybe lower mortgage rates eventually. The 10-year yield dipped 3 basis points to 4.32%. Still comfortably above the level that moves the affordability needle for first-time buyers.

Weekly MBA Mortgage Applications: -0.8%. An improvement from the prior week's brutal -10.4%. Still negative. Buyers are interested. Math keeps getting in the way.

Here's the kicker: If April CPI prints as hot as prediction markets expect, any hope of Fed cuts providing mortgage rate relief gets pushed into 2027. The housing market stays in a holding pattern that now feels like a generational sentence.

Enjoy that crisis.

Retail sentiment was in two cities. Euphoric Wednesday and Thursday on ceasefire news. Quietly unsettled again by Friday's CPI and the small detail that the Strait of Hormuz isn't actually open.

Crypto had two storylines running simultaneously. Bitcoin crossed $71,700 on optimism about Iran (and on Iran's proposed crypto toll booth on the Strait, which is either the most cyberpunk geopolitical development in history or a serious diplomatic overreach). And the New York Times investigation naming Dr. Adam Back as the likely Satoshi Nakamoto sent the crypto community into the kind of furious, protective outrage that only the blockchain faithful can produce. Don't touch their founder myth. Ever.

Institutional positioning? Loading semiconductor names. Trimming software exposure. Quietly. The kind of rotation that doesn't make press releases but screams in sector ETF flows.

This week's market tasted like a good bottle of wine discovered under genuinely stressful circumstances. You didn't expect to enjoy it. The label was confusing. Someone kept threatening to knock it off the table every few hours.

Mid-week delivered something smooth and celebratory. A ceasefire vintage. Notes of relief, crude oil discount, and a surprisingly pleasant core CPI finish. Paired beautifully with semiconductor gains and airline rallies.

By Friday, the aftertaste sharpened. A 0.9% monthly CPI bite that arrived like an unexpected bill at the end of a dinner you thought someone else was paying. You had a great meal. You're suddenly very aware of what it costs.

This week took six weeks of war, an 8 PM deadline, an oil spike to $114, a ceasefire, a historic CPI print, and a 47.6 consumer sentiment reading. It produced a +3.6% weekly gain on the S&P 500. Markets are simultaneously exhausting and occasionally brilliant.

The rally was real. Broadly participated. But the ceasefire is two weeks old. The Strait hasn't normalized. Earnings season is just starting against withdrawn guidance and cautious corporate language.

The structural pillars are holding; semiconductors are working. Mega-cap growth is performing. AI infrastructure spending shows no signs of being treated as a discretionary expense.

But the Fed is locked. Consumer sentiment is at record lows. The most important geopolitical negotiations of the year are happening this weekend in a room most of us will never see.

Last week's gains feel less like a verdict and more like a promising first chapter. In a book that might still be a tragedy.

Could go either way, honestly.