AE Wealth Management: Weekly Market Insights | 4/19/26-4/25/26
Weekly Market Commentary
THE WEEK IN REVIEW: April 19-25, 2026
Iran simmers, markets move on
It’s getting harder and harder to keep track of the developments with Iran. First there was the bombing campaign and an announced ceasefire. We extended the ceasefire because we had a “deal” — and then we didn’t. Then we set up a naval blockade in the Strait of Hormuz, but the Iranians said they were the ones who closed the Strait. Now we aren’t bombing but blockading.1
The Iranians have not shown up for a second round of peace talks and have been told to come back with a “unified proposal” by President Trump.2 There’s probably a more detailed timeline available here, plus maybe a few more points, but these highlights offer enough background to discuss the impact on the markets these past few weeks.
There’s been no resolution in this conflict, and it’s unclear who is calling the shots for Iran.3 It’s hard to fathom that, after being bombed and now blockaded, that Iran has anything it can do to change the situation, let alone control the Strait of Hormuz. The market knows this, so every time the ceasefire is extended, oil drops and stocks soar.
We agonized about the S&P 500 breaking through 7,000 all through January and most of February. Last week the index closed over 7,100!4 When a ceasefire is announced or extended, the price of oil drops — and when it does, markets rally, volatility ticks down and bond yields decline. If tensions escalate (e.g., ships being shot at or seized or the resumption of bombing on Iran’s infrastructure), stocks drop as the price of oil and bond yields increase.
Some are calling this the “ceasefire trade,” but we do not expect it to persist. Markets are either really cavalier and ignoring serious risks or they have mostly moved on and will continue to advance. Unless there is an unforeseen escalation — such as the U.S. committing ground troops in Iran, China and/or Russia intervening on behalf of Iran, or Iran proving it has an effective weapon to deploy in its defense — then yes, the market is ignoring risks. On the other hand, we are at record highs. Less than two months ago, all the “experts” were saying it would be impossible to bounce back so quickly and warning we were on the road to economic ruin.
The markets have quickly turned the page and believe we are nearing the end of this conflict or that it will be contained with the U.S. blockading Iran into economic submission and/or regime collapse. Remember the Iraqi “no-fly zones” after the first Gulf War in 1991?5 Something similar could develop as a next step in this situation, except it would be a “no-sail zone” for Iran while the U.S. and whoever joins us will keep the ships moving through the Strait of Hormuz. Oil will continue to decline, and markets can focus on more mundane things like earnings and economic data.
The past two months have been stressful. That’s not to say we won’t have stress in the months ahead, but this is yet another illustration of why it’s important to stick to your plan even when you’re uncomfortable. Markets win more often than they lose, so use that compounding effect to your benefit and don’t fall into the social media and infotainment rabbit hole of negativity, despair and doubt. In the words of Scarlett O’Hara: “After all, tomorrow is another day!” Just don’t forget to get the most out of today, too.
The replacement of Powell begins
Last week, Kevin Warsh, President Trump’s pick to succeed Jerome Powell as Federal Reserve chair, testified in front of the Senate Banking Committee.6 As expected, the testimony turned into political theater, with some calling Warsh “uniquely ill-suited.” Others said they had no qualms with his bona fides, but they wouldn’t vote to confirm him until the criminal investigation of Powell was dropped, which it finally was on Friday.7
The important question is: Will Warsh steer the Fed back to being more independent? Powell certainly flirted with partisanship, and that perception (or reality) is what tainted his relationship with Trump, who ironically installed Powell as chairman in 2018 and has been complaining about him ever since.
Given that Warsh was handpicked by Trump, outwardly maintaining “independence” doesn’t look realistic and would indeed make Warsh Trump’s “sock puppet,” as Senator Elizabeth Warren put it.8 Can Warsh maintain independence in a way Powell could not? Can Warsh wrangle the other Fed members toward a unified and independent Fed — or will the Fed become divided and partisan like nearly all the other institutions in our government?
It will also be interesting to see if Warsh sticks to his core beliefs that the Fed should reduce its balance sheet and not be in the quantitative easing business but instead focus on inflation and full employment. It seems likely Warsh will be confirmed, especially now that the Department of Justice has dropped its investigation of Powell. For Warsh, the trick will be to stick to his convictions. It will be a delicate path to tread given today’s treacherous partisan current, and we can only hope he keeps his footing.
Coming this week
- No data on Monday, but any new developments with Iran will continue to move markets.
- We’ll get a fresh reading for consumer confidence on Tuesday, plus the April Fed meeting will begin.
- On Wednesday, we’ll get the latest housing starts, building permits, wholesale inventories and MBA mortgage applications. We’ll also get the Fed’s rate decision as it concludes its two-day meeting. Predictions are 99.5% in favor of rates remaining at current levels.9 The other 0.5% is betting that rates will be increased by a quarter point, which is unlikely.
- Data will hit full stride on Thursday, with jobless claims and personal consumption expenditures (PCE), which will come in too late for the Fed to consider it in their rate decision. We’ll also see the first reading of first-quarter gross domestic product (GDP), which is predicted to come in at +1.2%.10
- No economic data is scheduled to be reported on Friday.
- Earnings season is upon us once more!11 So far, 28% of S&P 500 companies have reported results, and 84% of those have reported positive earnings per share (EPS) and 81% have reported positive revenue. Earnings growth for the S&P 500 is 15.1% so far, up from 11.9% last quarter. If 15.1% is the actual growth rate for the quarter, it will mark the sixth consecutive quarter of double-digit earnings growth for the index.
- For the current quarter, 11 S&P 500 companies have issued negative EPS guidance and 9 have issued positive. Valuation is still historically high for the S&P 500, with the forward 12-month price-to-earnings (P/E) ratio at 20.9 versus 22.2 last quarter, down mostly due to the stock market’s performance in March due to the turmoil in the Middle East. Although this P/E ratio is a little higher than the 5-year (19.9) and 10-year (18.9) averages, P/E should jump again next quarter due to the market’s recovery since the March lows.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500® | 0.55% | 4.67% | 30.64% | 20.09% | 11.38% |
| NASDAQ | 1.50% | 6.86% | 44.68% | 27.31% | 12.12% |
| DJIA | -0.44% | 2.43% | 22.79% | 13.27% | 7.66% |
Interest Rates: | |||||
| 4/24/2026 | 4/17/2026 | ||||
| UST 10 YR Government Bond Yield | 4.31% | 4.25% | |||
| Germany 10 YR | 3.00% | 2.97% | |||
| Japan 10 YR | 2.44% | 2.42% | |||
| 30 YR Mortgage | 6.30% | 6.34% | |||
| Oil | $94.40/ppb | $83.85/ppb | |||
| Regular Gas | $4.10/ppg | $4.06/ppg | |||
| All data as of April 24, 2026. | |||||
Sources:
1 CNN. April 13, 2026. “Day 44 of Middle East conflict — Trump says US will blockade the Strait of Hormuz.” https://www.cnn.com/2026/04/12/world/live-news/iran-us-war-talks-trump. Accessed April 26, 2026.
2 Caitlin Doornbos. New York Post. April 22, 2026. “Trump tells The Post news of fresh peace talks ‘possible’ as soon as Friday — as Iran scrambles to come up with ‘unified’ plan.” https://nypost.com/2026/04/22/us-news/trump-tells-the-post-second-round-of-talks-possible-as-soon-as-friday-as-iran-scrambles-to-come-up-with-unified-plan/. Accessed April 26, 2026.
3 Priyanka Shankar and Abid Hussain. Al Jazeera. April 22, 2026. “Trump calls Iran’s leadership ‘fractured’. Is it, and who’s in charge?” https://www.aljazeera.com/news/2026/4/22/trump-calls-irans-leadership-fractured-is-it-and-whos-in-charge. Accessed April 26, 2026.
4 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed April 26, 2026.
5 Air Force Historical Support Division. “1991 – Operation Southern Watch.” https://www.afhistory.af.mil/FAQs/Fact-Sheets/Article/458951/1991-operation-southern-watch/. Accessed April 26, 2026.
6 United States Senate Committee on Banking, Housing, and Urban Affairs. April 21, 2026. “Chairman Scott Champions Kevin Warsh as Next Chair of the Federal Reserve.” https://www.banking.senate.gov/newsroom/majority/chairman-scott-champions-kevin-warsh-as-next-chair-of-the-federal-reserve. Accessed April 26, 2026.
7 Lucy Bayly and David Goldman. CNN. April 24, 2026. “Jeanine Pirro drops criminal probe of Jerome Powell.” https://www.cnn.com/2026/04/24/business/doj-criminal-probe-of-powell. Accessed April 26, 2026.
8 Amanda Macias. Fox News. April 22, 2026. “WATCH: Sen Warren unloads on Trump’s Fed nominee Kevin Warsh in explosive hearing showdown.” https://www.foxnews.com/politics/watch-sen-warren-unloads-trumps-fed-nominee-kevin-warsh-explosive-hearing-showdown. Accessed April 26, 2026.
9 CME Group. “FedWatch.” https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html. Accessed April 26, 2026.
10 Federal Reserve Bank of Atlanta. “GDPNow.” https://www.atlantafed.org/research-and-data/data/gdpnow. Accessed April 26, 2026.
11 John Butters. FactSet. April 24, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_042426.pdf. Accessed April 26, 2026.
AE Wealth Management, LLC (AEWM) is an SEC Registered Investment Adviser (RIA) located in Topeka, Kansas. Registration does not denote any level of skill or qualification. The advisory firm providing you this report is an independent financial services firm and is not an affiliate company of AE Wealth Management, LLC. AEWM works with a variety of independent advisors. Some of the advisors are Investment Adviser Representatives (IAR) who provide investment advisory services through AEWM. Some of the advisors are Registered Investment Advisers providing investment advisory services that incorporate some of the products available through AEWM.
Information regarding the RIA offering the investment advisory services can be found at https://adviserinfo.sec.gov/.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information and opinions contained herein, provided by third parties, have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by AE Wealth Management.
This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy a security or insurance product.
4/26 – 5002899-4