What’s on our radar of stock market, economic conditions, and market insights.

As we delve into current trends in asset pricing, one must consider various themes that influence market behaviors and economic indicators. As we assess this date, it’s essential to reflect on historical market data and compare it to the present to gain insights into potential future trends.

As we enter late April 2026, markets have been whipsawing on the Iran conflict: a US-Iran ceasefire on April 8 triggered a sharp rally (S&P 500 recovered to near YTD-flat, oil fell below $84/barrel), but Iran subsequently re-restricted access to the Strait of Hormuz as the ceasefire nears expiration. March CPI surged to 3.3% headline — the 7-week Hormuz closure drove gasoline up 21.2%. The Fed holds at 3.50–3.75%; JPMorgan now flags a potential rate hike as the next move. US fiscal risk is accelerating: the FY2026 deficit is projected at $1.9T (5.8% of GDP), with OBBBA adding $500B this year alone. AI capital expenditure — with hyperscaler Q1 earnings due late April — remains the one structural tailwind.

• Economic Uncertainty: Left chart above showing an index of global (GDP weighted) economic uncertainty using NLP techniques, which stays at elevated level even after some de-escalation of tariffs conflict. Investment and big ticket consumption decisions are likely to be negatively impacted in the near term. Simply put, the elevated uncertainty requires some risk premium in the market. In addition, front running of tariffs have pulled demand forward and 2025H2 GDP growths across developed countries have remained subdued. <Read More>
  • Update 03/27/26: S&P 500 down 6.2% YTD as post-election euphoria fades. US labor market deteriorated — payrolls unexpectedly cut 92K in February, unemployment at 4.4%. Eurozone near stagnation (Composite PMI 50.1); France in outright contraction. Recession risk is squarely on the radar for European economies. Iran military conflict is the newest macro wildcard.
  • Update 04/20/26: Labor market partially recovered — payrolls rebounded +178K in March after Feb’s −133K shock, unemployment edged down to 4.3%. Global Composite PMI fell to an 11-month low of 51.0; Eurozone at 50.7 (9-month low), barely above stagnation. Iran 2-week ceasefire (April 8) sparked a sharp equity rally, but Iran has re-restricted Strait of Hormuz access as the ceasefire nears expiration — geopolitical volatility remains the dominant near-term risk.
• Valuation: equity market valuation is still rich but not stretched, on standalone basis or relative to treasury yield. The recent drawdown and subsequent recovery is comparable to the 2021-2022 inflation spike episode but so far these moves are reflecting valuation compression and earnings so far remains strong.
  • Update 03/27/26: Despite the Q1 correction, valuations remain stretched. Forward P/E at 19.9x (above 10-year average of 18.9x); CAPE at 39.3x — nearly double the modern-era average. Q1 2026 earnings revisions are tracking lower. Margin for error is thin; any earnings miss could accelerate the drawdown.
  • Update 04/20/26: Forward P/E has risen to ~21.0x despite the YTD drawdown — earnings estimates are being cut faster than prices, 10-year average is ~19.7x. CAPE ~37x. Q1 2026 earnings season underway; hyperscalers (Microsoft, Google, Amazon, Meta) report late April through early May, the first real test of Iran cost and tariff margin pass-through. Risk/reward skewed to the downside unless earnings hold.
• Tariffs impact: Even at 10% universal tariffs, the effective tariff rate(weighted by value of imports) for the US is about 20% compared to less than 5% over the past decade. So material impact to inflation and corporate margins are still at risk. But so far we have not seen the pass-through to US inflation. Read more about tariffs <here>.
  • Update 03/27/26: Legal inflection point — US Supreme Court ruled IEEPA-based tariffs unlawful on Feb 20, 2026. Administration replaced them with Section 301 and Section 232 investigations, maintaining protectionist stance under new legal authority. China now faces an effective tariff rate of ~34.7%, highest among major trading partners. Legal limbo and bilateral tensions persist; near-term resolution is unlikely.
  • Update 04/20/26: Administration operating under Section 122 authority post-IEEPA ruling. USTR initiated Section 301 investigations in March; public hearing scheduled April 28 — next policy inflection point. China effective tariff rate ~31.6% (Wharton, Apr 15). March CPI energy surge (3.3% headline) is currently Iran-driven, but tariff pass-through to consumer goods is likely the next inflationary wave as Section 301 findings materialize post-hearing.
• US exceptionalism: global investors have been fading the idea of US exceptionalism manifested on currency, treasury and stock market. With long term international investors being the marginal seller, risks of higher yield in treasury market, and lower dollar is to the upside.
  • Update 03/27/26: Iran conflict (escalated March 2026) has created a new geopolitical risk premium — 10Y Treasury yield climbed to 4.42%, highest since July 2025. OBBBA fiscal stimulus (~$500B added to 2026 deficit) provides near-term growth cushion but raises long-term debt sustainability concerns and limits Fed flexibility. Dollar weakened on growth disappointment and fading US exceptionalism narrative.
  • Update 04/20/26: 10Y yield declined to 4.31% on Iran ceasefire optimism, but the fiscal picture is darkening rapidly: FY2026 deficit projected at $1.9T (5.8% of GDP); OBBBA adds $500B this year and $4.1T over the decade, pushing debt/GDP to 120% by 2036 — well above the post-WWII record of 106%. Dollar under continued pressure. JPMorgan now flags next Fed move could be a 25bp hike if inflation re-accelerates on renewed Hormuz disruption.
• Inflation volatility: what the market may be under appreciating is that the fragile supply chain and potential trade diversion resulting from near-shoring or friend-shoring can create a lot of short term price spikes here and there. One can expect inflation to have more up and downs from time to time. It may be tricky to find direct hedge for this other than rates vol products.
  • Update 03/27/26: Feb 2026 CPI at 2.4% headline / 2.5% core — sticky above the Fed’s 2% target despite three rate cuts in late 2025. Iran conflict is disrupting energy supply chains, adding inflationary pressure not seen since 2023. Fed held rates at 3.50–3.75% at the March FOMC; markets pricing just one 25bp cut in December 2026. “Higher for longer” extended into 2026.
  • Update 04/20/26: March 2026 headline CPI surged to 3.3% YoY (from 2.4% in Feb) — Iran war drove gasoline prices up 21.2%, accounting for ~75% of the monthly rise. Core inflation held at 2.6% YoY. Iran’s 7-week Hormuz closure disrupted ~13 million barrels/day; ceasefire briefly reopened the strait but Iran is re-restricting access as of April 19. JPMorgan now sees next Fed move as a potential 25bp hike — a stark contrast to the rate-cut narrative of late 2025.
• AI Capital Expenditure: The one clear positive structural theme in 2026: AI infrastructure spending by hyperscalers (Microsoft, Google, Amazon, Meta) remains on track despite macro headwinds. BlackRock notes AI will “keep trumping tariffs and traditional macro drivers” for select sectors. The divergence between AI-exposed and non-AI equities is widening — a K-shaped market within equities. <Read More>
  • Update 04/20/26: Hyperscaler Q1 2026 earnings are the imminent catalyst — Microsoft, Google, Amazon, and Meta report late April through early May, with AI capex guidance under the microscope. AI-exposed equities continue to significantly outperform non-AI names, deepening the K-shaped market divergence. If hyperscalers maintain or raise capex guidance amid macro headwinds, AI infrastructure spending remains the single structural bullish thesis for 2026.

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