Week in Review: Geopolitical Uncertainty Drives Markets (April 04, 2026)

The Big Picture

This week brought a surprising paradox: major U.S. stock indices posted their first weekly gains since the Iran conflict began, with the S&P 500 rising 3.4%, the Dow Jones adding nearly 3%, and the Nasdaq soaring 4.4% . Yet beneath this surface rally, markets remained deeply unsettled by escalating geopolitical tensions that could reshape the economic landscape for months to come.

The dominant story continues to be President Trump’s military campaign against Iran, now in its fifth week. Trump signaled Wednesday that the U.S. is prepared to intensify its military response against Iran over the “next two to three weeks,” warning “we are going to hit them extremely hard” and “bring them back to the stone ages” . This rhetoric sent oil prices soaring above $113 per barrel, adding fresh inflationary pressure just as markets had been hoping for Federal Reserve rate cuts.

The week ended with a stronger-than-expected jobs report on Good Friday, showing the U.S. economy created 178,000 jobs in March, far more than expected . Markets currently expect the Fed to keep the federal funds rate unchanged this year , a stark shift from earlier expectations of potential cuts. The combination of geopolitical risk and resilient economic data has created a complex environment where traditional correlations between stocks, bonds, and commodities are breaking down.

By the Numbers

Note: Some figures estimated based on available data

What Moved Markets

Iran Conflict Enters Critical Phase

The Middle East situation dominated market psychology all week. Trump called Netanyahu on February 23 to inform him about Iran’s Supreme Leader’s upcoming meeting location, and during the State of the Union Address on February 24, Trump accused Iran of reviving efforts to build nuclear weapons and warned that the U.S. was prepared to act if necessary .

Trump threatened to destroy Iran’s bridges and power plants, saying the “New Regime leadership knows what has to be done, and has to be done, FAST!” His words came as the recently constructed B1 bridge near Tehran was destroyed in an airstrike, with eight people dying in the attack .

The conflict’s economic impact has been severe. Oil prices have surged 79.93% over the past 12 months, with WTI futures trading between $97.56 and $113.93, reaching a 52-week high of $113.97 . The average price for a gallon of gas in the U.S. topped $4 this week for the first time in nearly four years, while diesel prices have also soared .

Bond Markets Signal Inflation Concerns

The yield on the US 10-year Treasury note edged down to 4.31% on Thursday after rising to as high as 4.38% early in the session . Following Friday’s jobs data, the 10-year Treasury note yield jumped about three basis points to 4.35% immediately after the data .

Oil prices surged following Trump’s pledge to take more aggressive action against Iran, with high energy prices fueling worries about an inflation spiral which could prompt the Fed to adopt a more hawkish stance . This has essentially killed any hopes for rate cuts in 2026.

Tech Resilience Amid Uncertainty

Despite the macro headwinds, technology stocks showed surprising strength. Tesla reported that first-quarter deliveries and production rose year-on-year but fell from the prior quarter, sending shares down more than 5%, while Globalstar jumped 13% on reports that Amazon may consider an acquisition .

The divergence between growth and value stocks suggests investors are positioning for a scenario where geopolitical tensions persist but don’t derail the underlying technology transformation of the economy.

Crypto Corner

Bitcoin struggled this week, continuing its challenging start to 2026. As of April 2, Bitcoin was trading at $66,246.43, down about $2,264.47 from the previous day and about $16,919.99 below where it stood a year ago .

The monthly returns chart shows that Bitcoin has struggled in 2026, with January closing at -10.1% and February dropping 14.8%, both defying their historically positive averages. March was barely holding at +0.19%, well below its historical average of +10.2% .

April has historically been one of Bitcoin’s strongest months, with an average return of +33.4%, but given that both January and February already broke their historical trends, relying on seasonal patterns alone would be risky .

The broader crypto market remains under pressure as institutional flows weaken and macro uncertainty persists. The Exchange Whale Ratio shows that Bitcoin whales are sending a larger share of coins to exchanges, with the upward trend throughout 2026 showing that large holders have been consistently distributing .

The Week Ahead

Key events to watch for the week of April 7-11, 2026:

• Monday, April 7: ISM Services PMI • Tuesday, April 8: NFIB Small Business Optimism
• Wednesday, April 9: Federal Reserve meeting minutes release • Thursday, April 10: Consumer Price Index (CPI) inflation data • Friday, April 11: University of Michigan Consumer Sentiment (preliminary)

Inflation will be in the limelight next week along with earnings from Delta Air Lines (DAL). February’s Personal Consumption Expenditures (PCE) price index, the Fed’s favored inflation gauge, comes out Thursday .

Geopolitical developments will likely continue to drive daily market moves, with particular attention on any signs of de-escalation or further military action in the Middle East.

DCA Check-in

This week perfectly illustrates why dollar-cost averaging remains the smart approach for long-term investors. While markets posted solid gains, the underlying drivers, from oil price spikes to geopolitical uncertainty, show just how unpredictable short-term movements can be. The fact that stocks could rally 3-4% during an active military conflict demonstrates that trying to time the market based on headlines is a fool’s errand . Your regular DCA contributions are buying you shares regardless of whether the news cycle is focused on jobs data, presidential speeches, or oil prices.

This article is for educational purposes only. It is not financial advice. See our full disclaimer.