Markets pushed higher again

02 April 2026

Markets pushed higher again, but it still feels like everything is trading off the same thing, headlines flipping between optimism and uncertainty with no clean resolution in sight. The relief move was strong on paper, global equities up 1.8%, developed markets +1.5% and emerging markets leading at +4.3%, with the S&P 500 up 0.7%, Europe rallying 2.4%, China adding 2.2% and Japan surging 5%, while in the GCC Dubai also moved higher by 2.0%. What really drove the move was oil collapsing 14.5% to just above $100 as talk of a shorter conflict picked up again, while gold kept grinding higher to $4,759, US 10 year yields edged up slightly to 4.33% and the dollar softened. The whole move is basically the market leaning into the idea that this ends sooner rather than later, with Trump openly talking about wrapping things up within two to three weeks, even as Iranian officials push back on that narrative, so you end up with this constant push and pull where every headline shifts positioning.

The US session itself was not just about headlines, there was real data moving things as well. Manufacturing came in strong, the ISM jumped to 52.7, the highest since 2022, but the detail is what matters, the prices paid component surged to levels not seen since mid-2022, which tells you input cost pressures are building quickly and directly tied to energy and supply disruptions. Retail sales also surprised on the upside, up 0.6%, with broad-based strength across categories, which shows the consumer is still holding up for now, helped by wage growth and tax refunds. ADP payrolls came in at 62k, slightly above expectations but still consistent with a slowing labour market, hiring is concentrated in areas like healthcare while goods-producing sectors are much softer, so you end up with a mix of resilience in demand but clear signs that the economy is not accelerating.

Oil is still the anchor to everything even with the sharp drop, because the physical side of the market hasn’t really normalised. Saudi exports fell by roughly half in March because tankers were effectively blocked from leaving the Gulf, with flows rerouted through the Red Sea and millions of barrels still stuck, so even if prices are reacting to de-escalation headlines, the underlying supply disruption is still there and will take time to unwind. That feeds directly into inflation expectations and growth concerns, and it’s why even the more optimistic takes are cautious, the view is that energy is unlikely to go back to where it was before all this started, which means the macro impact lingers even if the conflict cools.

Then you start to see how this is spilling into policy and broader macro decisions, Europe is already reacting by trying to ease pressure on energy costs through adjustments to its carbon market, effectively looking at ways to increase flexibility in the system and prevent energy prices from hitting industry too hard. That tells you policymakers are already preparing for a scenario where energy remains elevated enough to hurt competitiveness, especially for heavy industry. On the geopolitical side, things are also getting more complicated rather than simpler, tensions between the US and NATO allies are rising with discussions about the alliance itself coming back into focus, and meetings being scheduled at the highest levels, so even if the immediate conflict fades, the broader political backdrop is not exactly calming down.

On the corporate side, there’s a lot going on that actually tells a more nuanced story than the equity rally suggests. In AI, there is a very clear shift happening, demand for OpenAI exposure in secondary markets has dropped off sharply with large holders struggling to sell positions, while at the same time there is massive demand building for Anthropic as people chase what they see as better upside from a lower valuation base. That is a big shift in positioning within the most crowded theme in the market. On top of that, the infrastructure side of AI is starting to show strain, Oracle’s massive data center financing is going through with tighter terms, more scrutiny and higher borrowing costs, which tells you that funding this entire buildout is getting more expensive and more complex. Yet on the equity side, appetite is still very strong, with SpaceX moving toward what could be the largest IPO ever, potentially north of $1.7 trillion valuation, so you have this disconnect where public market enthusiasm remains very high while private markets and credit are becoming more selective.

If you look at the consumer side, the signals are much less optimistic, luxury is probably the clearest example with LVMH down around 28% in the first quarter, its worst start on record, which is not just about one company but more about what it represents, discretionary spending, travel, and the broader wealth effect all coming under pressure. When a name like that moves like this, it usually tells you something about underlying demand rather than just equity market noise.

Markets this morning:

Today morning, the tone is already turning again after Trump’s speech failed to give markets what they were looking for. He said the war is “very close” to completion, but offered no actual timeline, no concrete plan to reopen the Strait of Hormuz and instead warned of more aggressive strikes over the next two to three weeks, including potential attacks on infrastructure, which immediately shifted the mood back toward escalation rather than resolution . Oil reacted straight away, jumping back above $106 as the Strait remains effectively shut, while equities in Asia fell more than 2% and US and European futures dropped over 1%, reversing the previous rally as markets started to question how realistic the earlier optimism really was . The dollar is firming again as a haven, yields are pushing higher on renewed inflation concerns, and the key issue remains unchanged, there is still no clarity on how or when this ends, and more importantly no sign that shipping flows through Hormuz are going back to normal any time soon, which keeps the entire inflation and growth shock very much in place.

Upcoming key events/data:

Looking ahead key events and data today include US jobless claims and trade data, Japan monetary base and South Korea inflation, while the ECB publishes its economic bulletin. Friday rounds things off with the US jobs report, where payroll growth around 55,000 is expected, alongside unemployment and services activity, as well as China services PMIs and French industrial production, which should give a clearer read on how growth is holding up as energy pressures build.

Written by:

CIO Office

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