Global equity rally falters after disagreements on ceasefire terms

Summary

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Moving Markets – April 9, 2026

Episode: Global equity rally falters after disagreements on ceasefire terms
Host: Helen Freer (Julius Baer)
Guests: Bernadette, Dirko, Carsten Menker

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Episode Overview

This episode dives into the initial relief and subsequent volatility across global markets following the announcement—and near-immediate unravelling—of a two-week US-Iran ceasefire agreement. The team analyzes market reactions, political developments, and energy market dynamics as optimism gives way to uncertainty due to disagreements on ceasefire terms and ongoing Middle East tensions. The discussion provides a succinct breakdown of the cross-asset implications of the conflict, with a special focus on the Strait of Hormuz and energy security.

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Key Discussion Points & Insights

1. Market Reaction to the US-Iran Ceasefire

(00:36 – 02:44)

• Ceasefire Announcement Triggers Relief Rally:
  • The ceasefire, announced Tuesday, intended to halt attacks for two weeks, sparked immediate optimism in global equities.
  • Europe: Stoxx 600 up 3.7%, with travel & leisure (+7%), industrials (+6.6%), and construction (+6.2%) leading.
  • US: Dow Jones +2.85% (best day since April 2025), S&P 500 +2.5%, NASDAQ +2.8%
  • Emerging Markets: Energy-import dependent regions outperformed, up 5% in some ETFs.
• Bond Yields Plunge:
  • European 10-year yields fell 14 bps to 2.94%.
• Relief for Commodities:
  • WTI crude futures dropped >16% to $94.41/bbl, the largest one-day drop since April 2020.
  • “International markets that are more reliant on energy imports outperformed the US with one emerging markets ETF up more than 5%.” (Bernadette, 02:24)

2. Ceasefire Frays Amidst Mutual Accusations

(02:44 – 03:41)

• Iran Alleges US Violations:

  • Iran’s parliamentary speaker accuses the US of violating three points:
    1. Israel’s continued attacks on Lebanon
    2. US drone entering Iranian airspace
    3. Denial of Iran's right to enrich uranium
  • Declares bilateral negotiations ‘unreasonable’ under these conditions.

• US Response:

  • Vice President J.D. Vance, in Hungary, labels the ceasefire "messy". Reiterates denial of uranium enrichment to Iran and maintains that Lebanon was never included in the ceasefire scope.
  • Urges that President Trump is “impatient” for progress.

  Notable quote:

  • “He… described the ceasefire as a fragile truce, adding that President Trump was impatient to make progress.” (Bernadette, 03:26)

3. Asian Markets and Renewed Uncertainty

(03:41 – 04:41)

• Equity Drop Continues:

  • Nikkei -0.5%, Kospi -2%, CSI 300 -0.6%

• Oil Prices Rebound:

  • Both WTI and Brent edge up again as uncertainty returns; WTI trading near $97.

• Geopolitical Tension Remains:

  • "Currently, there are only scant signs that the Strait of Hormuz is open in any meaningful way, with Iran flexing its control over this oil artery and demanding tolls for safe passage." (Bernadette, 04:16)
  • President Trump signals US troops will remain until compliance; warns that otherwise “the shooting would begin again.”

  Memorable quote:

  • “Otherwise, to quote him, the shooting would begin again.” (Bernadette referencing President Trump, 04:37)

4. Broader Impact and Data To Watch

(04:41 – 05:31)

• Transport & Energy Sectors Impacted:
  • Delta Airlines expects $2bn higher fuel costs through June due to the Iran war, sticking to cautious full-year forecasts.
  • ExxonMobil lost 6% of global production in Q1 as Gulf operations paralyzed.
• Upcoming Economic Data:
  • US PCE inflation, weekly jobless claims, and final Q4 GDP estimate due.

5. Energy Market Analysis: The Situation as Seen by Carsten Menker

(05:38 – 10:02)

• Oil Market: Immediate Volatility, Underlying Fragility
  • Initial collapse in oil and gas prices reversed as ceasefire erodes; “...the state of Hormuz has not been reopened, so the traders were not able to get busy and send ships through.” (Carsten, 06:32)
  • New tension: Iranian drone attack on Saudi east-west pipeline, but limited damage—“very muted reaction in the oil market once the news broke.” (Carsten, 07:04)
• Interpreting Violations and Political Bluster
  • Ceasefire fragility seen as part of “capital-building” and testing of commitments.
  • “In such situations...violations are part of this process, I would say, at least in the early stages and also to a limited degree.” (Carsten, 07:22)
  • It’s not a “black and white” situation, but “different shades of gray.”
  • Main scenario remains: short, sharp energy price spikes, “but no sustained supply crisis.”
• Underlying Resilience of Energy Systems
  • Some shipping persists, albeit at a fraction of pre-conflict pace, through Iran-guarded routes and with international risk-taking.
  • “This development of Iran's safeguarded trade also illustrates that the geopolitics and the economic layers related to this conflict are separate.” (Carsten, 09:08)
  • Market flexibility outweighs worst-case headlines; the peak of the shock probably “behind us” but volatility here to stay.

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Notable Quotes & Moments

• On the rally:

  • “All of the major regional bourses in Europe closing in positive territory. Travel and leisure stocks led the way, rising over 7%.” (Bernadette, 01:24)

• On the ceasefire’s scope:

  • “Vice President J.D. Vance... described the ceasefire as a fragile truce, adding that President Trump was impatient to make progress.” (Bernadette, 03:26)

• On Strait of Hormuz risks:

  • "There are only scant signs that the Strait of Hormuz is open in any meaningful way, with Iran flexing its control over this oil artery and demanding tolls for safe passage." (Bernadette, 04:16)

• On supply resilience:

  • “What is clear... the system has proven more flexible and more resilient than the headline risks suggested. So the ceasefire overall strengthens the case that the peak of the supply shock is behind us.” (Carsten, 09:26)

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Timestamps for Key Segments

• Ceasefire triggers global rally: 00:36 – 02:44
• Fraying ceasefire and mutual accusations: 02:44 – 03:41
• Asian markets and oil rebound: 03:41 – 04:41
• Corporate/sector impacts & data watch: 04:41 – 05:31
• Energy market analysis (Carsten): 05:38 – 10:02

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Summary Conclusion

The episode traces a roller-coaster 24 hours in global markets, initially buoyed by diplomatic breakthroughs before anxieties resurface over implementation gaps in the US-Iran ceasefire. Energy market volatility lingers as key supply arteries remain in limbo and new incidents occur, but analysts underscore the global system’s unexpected resilience. Investors remain focused on the Strait of Hormuz, energy sector fallouts, and fresh economic data, as the headlines shift from hope back to uncertainty.

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Transcript

[A]

Good morning everyone and welcome to Julius Baer's Moving Markets Podcast. It's Thursday 9th April and my name is Helen Freer, filling us in on the latest in financial markets today. I will speak first of all this morning to Bernadette and Dirko and then I'm looking forward to catching up with Carsten Menker and I'll be asking him about the reaction in energy markets to the two week ceasefire between the US And Iran that was announced earlier this week. So that's in just a few minutes. But over to you first of all, Bernadette, for the market news. Good morning.

[B]

Good morning, Helen.

[A]

Looking across global equity screens this morning, Benedet, it seems to have been a story of two sessions over the last 24 hours.

[B]

Indeed. And it did all begin with that ceasefire announced on Tuesday, which should have halted attacks for two weeks. And that triggered a relief rally across markets. But the deal hangs on traffic through the Strait of Hormuz returning to normal. European stocks rallied to the close with the pan European Stoxx 600 index finishing the session 3.7% higher with all sectors besides oil and gas in the green and all of the major regional bourses in Europe closing in positive territory. Travel and leisure stocks led the way. We saw them rising over 7%. Industrials added 6.6% and construction names rose 6.2%. And we saw bond yields dramatically declining in Europe. 10 year bond yields came off 14 basis points back at 2.94%. Now market reaction in the US was also a relief rally. We saw the Dow Jones industrial average ending the session up 2.85%. That was the benchmark's best day since April 2025, when Trump first backed down then from the severity of his initial tariff announcement. Last year, The S&P 500 closed up 2.5%. The NASDAQ Composite finished the session 2.8% higher. And stocks were further bo by comments from the US President yesterday that the US will work with Iran to remove nuclear material from the country and that the two nations are discussing tariff and sanctions relief. The rally was led by stocks that have come under the most pressure since the start of the conflict. Semiconductor makers vulnerable supply chains disruptions climbed. So we saw one semiconductor ETF jumping more than 5%. Individual stocks, Broadcom was higher by nearly 5%. Micron Technology gained more than 7%. And international markets that are more reliant on energy imports outperformed the US with one emerging markets ETF up more than 5%. And of course we saw West Texas Intermediate crude futures dropping by more than 16% to close at $94.41 per barrel. That was the biggest daily drop since April 2020.

[A]

All right, but then, just a day after the temporary ceasefire was announced, Iran's parliamentary speaker accused the US of violating three parts of Tehran's 10 point proposal, didn't he?

[B]

Indeed he did. And those alleged breaches include Israel's continued attacks on Lebanon, the entry of a drone into Iranian airspace, and the denial of the Islamic Republic's right to enrich uranium. Iran's parliamentary speaker said that in such a situation, a bilateral ceasefire or negotiations are unreasonable. Now, Vice President J.D. vance addressed the Iran parliamentary speaker's allegations while he was in Hungary yesterday. He said that ceasefire's role was messy. He reiterated that the US stance that Iran cannot be permitted to enrich uranium. And he maintained that the ceasefire agreement was never actually extended to Lebanon. He also described the ceasefire as a fragile truce, adding that President Trump was impatient to make progress.

[A]

What's the story in Asian markets this morning then?

[B]

Well, you alluded to it at the start of the show, Helen. All the main indices are lower in this morning's session. Nikkei down half a percent, the Kospi off more than 2%. CSI 300 is down 0.6%. Oil has climbed again again. Crude and Brent are back up this morning. WTI Crude was trading around 97 the last time I looked. And all of this is after the charge by Iran that the US has broken the terms of the ceasefire. We saw Asian technology stocks following U.S. peers lower after Meta platforms unveiled a new artificial intelligence model and Anthropic launched CLAUDE tools for building agents. There are currently only scant signs that the Strait of Hormuz is open in any meaningful way, with Iran flexing its control over this oil artery and demanding tolls for safe passage. Currently, President Trump took to social media to declare that US Forces will remain in the Gulf until a deal is reached and complied with. Otherwise, to quote him, the shooting would begin again.

[A]

Apart from following the latest developments in the Middle east, then what else should we be watching out for, Bernadette?

[B]

Well, of course traders are still focused on the Strait of Hormuz and whether energy flows will resume through the waterway. Delta Airlines expects to incur more than 2 billion doll higher fuel costs until the end of June because of the Iran war. And that's prompted the carrier to tread very carefully and stick to its previous full year profit forecast. ExxonMobil Corp. Lost 6% of its global production in the first quarter as the Iran War paralysed oil and natural gas operations in the Persian Gulf, and well futures are indicating a lower U.S. open today. Helen, on the data front, we're going to have the US PCE inflation data for February weekly initial jobless claims will come out, and we'll also have the third estimate of US Q4 GDP. That's it from me.

[A]

Very good. Thank you very much, Bernadette, for the roundup this morning.

[B]

Thanks for having me, Helen.

[A]

And now on to you, Carsten, Good morning. Firstly, welcome to the podcast.

[C]

Good morning, Helen.

[A]

So it was, as we've talked about, really all about the ceasefire in financial markets yesterday. Let's talk about what this meant for commodities then. Oil and gas prices dropped as much as a fifth before news about a disagreement between the US and Iran emerged. Where do we stand this morning, Carsten?

[C]

You're right. So as we heard before, financial markets initially breathed a big sigh of relief yesterday. Energy markets as well, as you alluded to after the announcement of that ceasefire. But as we learned during the day, and as we've heard, there is disagreement about its scope. The US says Israel's fighting in Lebanon is not included. Iran, of course, has the opposite. And yeah, as a result, the state of Hormuz has not been reopened, so the traders were not able to get busy and send ships through. Of course, this is a cornerstone of the ceasefire, maybe the primary motivation, and certainly it's key for energy markets, as we have discussed time and again. And then there was also news of an Iranian drone attack on Saudi Arabia's key East west pipeline, which has become an important alternative outlet for its oil production. Damage appears to be limited based on the available information, which is also in line with a very muted reaction in the oil market once the news broke.

[A]

And from your perspective, how concerning are these violations?

[C]

See, if we take a step back, I would say that the ceasefire fits into the pattern where extreme price spikes trigger behavioral and political responses and violations are part of this process, I would say, at least in the early stages and also to a limited degree. So they contribute to the political capital building that is typically happening in such situations. And I think they should also be seen as testing the other side's commitment to the ceasefire. So from our perspective, in terms of the scenarios we have outlined, the big picture is unchanged, but of course the situation is highly in flux and importantly, it is not as black and white as financial markets suggested yesterday after the announcement. In instead, again, as always, it's different shades of gray. So these are the key considerations underpinning our swift and intense base case scenario still prompting us to expect a short lived but pronounced spike in energy prices, but no sustained supply crisis.

[A]

Okay, what's the current backdrop in energy markets then?

[C]

Well, with the Strait of Hormuz not formally reopened, the status quo prevails on energy markets. So shipping through the strait continues. This is again very important to reiterate, supported by Iran safeguarded routes and also broader international participation in the meantime. So there are some shippers, some traders who are taking a calculated risk of passing through the strait. Of course this remains a fraction of the pre conflict levels, but combined with the alternative outlets, such flows mitigate the supply shock and provide much needed breathing space, especially for the energy supply chains to at least partly readjust. This development of Iran's safeguarded trade also illustrates that the geopolitics and the economic layers related to this conflict are separate. So on energy markets, as as previously mentioned, the situation is not binary. It's neither fully disrupted nor fully normalized. What is clear, and I think we're repeating, that the system has proven more flexible and more resilient than the headline risks suggested. So the ceasefire overall strengthens the case that the peak of the supply shock is behind us. Even in light of these violations, we reiterate our initial views on oil and gas, but of course expect volatility to remain elevated.

[A]

Excellent. Thanks a lot Carsten. Great to hear your thoughts on this this morning.

[C]

Thank you Helen.

[A]

So that's it for today. Thank you again to Bernadette and Carsten, and to you, our listeners, for tuning in. I hope you enjoyed the show. If you did, then make sure you subscribe if you haven't already. And please join us again tomorrow when I'll be back with more of my colleagues to talk about what is moving markets. Until then though, have a great day everyone and bye for now.

[D]

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