Markets on edge as oil, inflation, and AI drive a fragile mood

Summary

---

Moving Markets — April 7, 2026

Episode Title: Markets on edge as oil, inflation, and AI drive a fragile mood
Host: Bernadette (A)
Guests: Mike Rauber (B) – Market Strategist, Norbert Rucker (C) – Head of Economics & Next Generation Research
Produced by Julius Baer

---

Episode Overview

This episode of Moving Markets dives into the current state of financial markets as they grapple with geopolitical uncertainty, persistent inflation, and the surging impact of artificial intelligence (AI). Bernadette discusses market movements and sector highlights with strategist Mike Rauber and receives an energy update from economics head Norbert Rucker, with a close focus on oil markets amid ongoing Middle East conflicts, the outlook for technology stocks, and key upcoming economic data.

---

Key Discussion Points & Insights

1. Market Performance Amid Geopolitical and Energy Volatility

• Easter Monday Market Moves (01:07–02:38)

  • Despite thin trading due to Easter Monday, U.S. and select Asian markets performed positively:
    • South Korea and India up over 1%.
    • S&P 500 rose 0.5%, with 8 of 11 sectors gaining.
    • Health insurers, notably UnitedHealth and Yamana, surged 8%+ after regulatory approvals.
  • Quote (B, 01:22): "Trading was thin, but markets that were open edged higher. Investors looked past another rise in oil prices and ahead of President Trump's 8pm Washington deadline today."

• Oil Price Surge and Global Response (01:54–02:38)

  • Brent crude trading at $111/barrel. WTI at $116/barrel.
  • U.S. crude premiums hit record highs as Asia and Europe compete for supply due to Middle East tensions.
  • Japanese government bond auction showed weak demand amid uncertainty.

• Broader Market Mood (02:41–03:08)

  • U.S. equity futures down ~0.5%.
  • Europe flat, catching up post-holiday.
  • Gold remained above $4,650/oz; U.S. Treasury yields steady at 4.34%.
  • Markets balanced between hope for relief rallies and ongoing storm clouds.

---

2. Technology and AI: Drivers of Market Optimism

• Semiconductor Boom: Samsung & Broadcom (03:08–03:58)

  • Broadcom shares climbed 3% post-announcing a major Google deal.
  • Samsung's Q1 profit outperformed full-year 2025 numbers due to a 64% increase in memory chip prices driven by AI demand.
  • Quote (B, 03:29): “The surge reflects a 64% increase in average selling prices for global memory chips driven by strong demand for AI memory.”

• SpaceX IPO and Capital Market Dynamics (04:07–04:36)

  • SpaceX to allocate a large IPO share to retail investors and engage 1,500 retail participants at a post-roadshow event.
  • Other major tech IPOs may follow (Anthropic, OpenAI), tightening competition for capital amid limited global capital growth.
  • Quote (B, 04:15): “SpaceX has reportedly told bankers that it will allocate a large share to retail investors and host about 1,500 of them at a June event after the IPO roadshow.”

---

3. Inflation and Economic Data: Mixed Signals

• US Macro Data & Company Moves (04:36–05:27)

  • Strong March payrolls report: +178,000 jobs, above expectations.
  • ISM Services Index dipped but remains expansionary (54.0); strong new orders vs. weak employment, and prices paid reached highest since Oct 2022.
  • Amazon introduces a 3.5% fuel and logistics surcharge in response to energy cost spikes.
  • Quote (B, 04:55): “Service providers experienced the strongest growth in new orders in more than three years, but employment trends were weak and the gauge for prices paid jumped to 70.7, highest since October 2022.”

• Persistent vs. Transitory Inflation?

  • The team questions if current inflation rebound is fleeting or becoming entrenched, a major market concern.

• Key Upcoming Data & Earnings (05:27–06:18)

  • Markets await global services PMIs, U.S. durable goods data, and inflation prints from China, Germany, and U.S.
  • Earnings season kicks off with Shell, ExxonMobil, and Delta Air Lines—companies notably exposed to energy price swings.
  • New York Fed and other sources to issue updates on inflation expectations.

---

4. Energy Markets and the Middle East Conflict

• Energy Price Steadiness Amid Uncertainty (06:31–07:35)

  • Oil remains above $110/bbl; global gas at €50. Markets have normalized to these levels for now.
  • Iran’s recent retaliatory regional strikes, especially toward UAE and Kuwait, have intensified.
  • Ongoing negotiations (Pakistan, Oman, UK), but little progress towards de-escalation.
  • Quote (C, 06:54): “The most focus … is about the US threat about escalation linked to the opening of Strait of Hormuz. And this most likely keeps energy markets quite anxious and nervous for the time being.”

• Strait of Hormuz: Partial Trade and Supply Implications (07:44–09:02)

  • Some shipping has resumed, with cargo safeguarded by Iranian cooperation; first gas vessel transited over the long weekend.
  • Flow remains a fraction of prewar levels, but alternative routes and this limited traffic alleviate the risk of a major supply shock.
  • Quote (C, 08:35): “According to a specific data provider, Windward, there's up to 20 vessels … that passed a choke point in outbound direction over the past days. … This helps to mitigate the supply shock and provides much needed breathing space.”

• Energy Market Outlook (09:06–09:53)

  • Situation remains tense; negotiation space tiny and potential for brief further escalation.
  • Julius Baer maintains a neutral view on oil as typical “shock spike then gradual easing” pattern expected to hold, with seasonal relief ahead.
  • Quote (C, 09:31): “The conflict is very close to high noon—possibly there’s some third escalation just to de-escalate afterwards … but we keep our neutral view for oil … and should continue seeing easing for the remainder of the year heading into summer.”

---

Notable Quotes

• On Market Mood:

  • "With developments in the Middle East in mind, the markets seem to be caught between ready for a relief rally and in the eye of the coming storm."
    — Mike Rauber (B), 03:01

• On AI and Chips:

  • “Shares rose more than 5% early in South Korea, but later slipped and are down around 1%. But the stock is still up 64% year to date.”
    — Mike Rauber (B), 03:53

• On Geopolitics and Oil:

  • “The conflict is very close to high noon—possibly there’s some third escalation just to de-escalate afterwards … but we keep our neutral view for oil … and should continue seeing easing for the remainder of the year heading into summer.”
    — Norbert Rucker (C), 09:32

---

Timestamps for Key Segments

• Easter Monday Price Action & Oil Overview: 01:07–02:38
• Technology Markets & SpaceX IPO: 03:08–04:36
• US Macro Data & Inflation Debate: 04:36–05:27
• Upcoming Data & Earnings Preview: 05:27–06:18
• Energy Markets & Middle East Update: 06:31–09:53

---

Summary

This episode captures a marketplace at the crossroads: investors are trying to gauge the durability of recent gains as energy prices stay volatile, inflation remains a worry, and geopolitical tensions refuse to subside. The panel highlights AI and chip companies as rare bright spots, while also emphasizing the tenuous state of Middle East energy flows and the possibility for further oil price shocks. Upcoming macro data and corporate earnings, especially from energy majors, will be crucial signposts for where the markets might head as spring unfolds.

Essential Takeaway:
Markets are living “in the eye of the storm”: resilient in pockets such as tech and AI, but deeply fragile due to the ongoing energy crisis and geopolitical tensions. Investors should brace for volatility, keep a wide-angle lens, and monitor inflation, energy flows, and global demand signals closely.

---

Transcript

[A]

Good morning and welcome to Julius Baer's Moving Markets podcast on Tuesday 7th April with me, Bernadette and Erco. During the recent turmoil in financial markets, global emerging market equities have exhibited a surprising degree of resilience. What explains this and how should investors differentiate across sectors as volatility persists? Tune in to our latest view beyond podcast, the Continued Resilience of Emerging Market equities, where Ayako Lehmann sits down with our equity strategist Nenad Dinic to answer these questions and a lot more. It's live now on our Moving Markets channel, but now I'm looking forward to catching up on the latest financial markets news with my colleague Mike Rauber. And of course, given the fact that the war seems very much still on, we're going to be catching up with our head of economics and next generation research, Norbert Rucker to talk about the latest developments in the energy sector. First, though, let's catch up on those main headlines. Good morning to you, Mike.

[B]

Good morning, Bernadette.

[A]

Why don't we start with Easter Monday's price action? Even as many markets around the world were closed, Wall street was open for business.

[B]

Trading was thin, but markets that were open edged higher. Investors looked past another rise in oil prices and ahead of President Trump's 8pm Washington deadline today. So on Monday, South Korea and India gained more than 1% while the S&P 500 was up half a percent. Eight of its 11 sectors rose on the day after the close. Health insurers such as UnitedHealth and Yamana jumped more than 8%. Regulators approved larger than expected 2.5% price increases in parts of their business, giving timely support to stocks in a downtrend.

[A]

What's the market mood this morning as we approach the next deadline, President Trump seems to be waving both the carrot and the stick by saying that talks are going well but also threatening to destroy every bridge.

[B]

In Iran, Brent crude is rising in volatile trading at $111 a barrel, with U.S. crude premiums hitting record levels as Asia and Europe compete for supply. WTI Oil is trading near $116 a barrel this morning. Now equities are losing somewhat momentum after opening higher. Shares in China and Japan are flat to slightly lower. Japan's auction of 30 year notes saw muted demand amid uncertainty in Middle east tensions with the weakest bid to cover ratio since June. In economic data releases, Japan's February household spending fell 1.8% on the year, marking a third consecutive decline.

[A]

And what are you seeing in other markets this morning Mike.

[B]

US equity futures are slightly down about half percent while Europe catching up on the US is around flat. Gold is trading at above $4650 an ounce, while 10 year US treasury yields are steady at 4.34% now overall Bernadette with developments in the Middle east in mind, the markets seem to be caught between ready for a relief rally and in the eye of the coming storm.

[A]

Okay, then, why don't we turn to technology? Following the US market close yesterday, Broadcom rose 3% after the chipmaker announced a long term agreement with Google. This morning, South Korea's Samsung Electronics reported results that beat expectations sharply.

[B]

The company posted a preliminary operating profit of 57.2 trillion South Korean won in the March quarter. Now that is exceeding what it generated in the whole of 2025. The surge reflects a 64% increase in average selling prices for global memory chips driven by strong demand for AI memory. Shares rose more than 5% early in South Korea, but later slipped and are down around 1%. But the stock is still up 64% year to date.

[A]

All right then, staying with technology. SpaceX has outlined details of its highly anticipated IPO at a meeting with its of bankers yesterday evening.

[B]

The company has reportedly told bankers that it will allocate a large share to retail investors and host about 1,500 of them at a June event after the IPO roadshow. Now SpaceX is not alone. Firms like Anthropic and OpenAI are also potential IPO candidates this year. All of this means that competition for capital is likely increasing as global capital growth remains limited going back to last week.

[A]

On Friday, March US payroll numbers were strong with a plus of 178,000, much better than expected. But yesterday the message from the Institute of Supply Management was more mixed, wasn't it?

[B]

Yes. So the ISM Services Index fell 2.1 points to 54, so still in expansion territory and service providers experienced the strongest growth in new orders in more than three years. But employment trends were weak and the gauge for prices paid jumped to 70.7, the highest since October 2022. Separately, Amazon announced late last week that it will apply a 3.5% fuel and logistics surcharge due to the energy increase. Now this begs the question for is this inflationary rebound transitory or the start of something more persistent?

[A]

Finally then, Mike, markets are being shaped primarily by geopolitical developments. With Trump's deadline expiring later today, what else should we be focusing on this week?

[B]

From today, markets will focus on global services, PMIs and key US data starting with durable goods orders and later in the week consumption metrics for signs that the global economy is still holding up or beginning to show strain. Earnings season also begins with Shell, ExxonMobil and Delta Air Lines reporting today and on Wednesday. Obviously very interesting because all three companies are heavily impacted by the level of oil prices and on inflation that I mentioned before. The New York Fed releases one year inflation expectations today and this is followed on Friday by major inflation prints from China, Germany and the US that's all

[A]

from me, plenty to look out for this week. Then thank you very much for the update at the start of the week.

[B]

Mike, thank you very much for having me. Bernadette.

[A]

Norbert, good morning to you.

[C]

Good morning.

[A]

With the long weekend now over, Norbert, what are the latest developments related to the conflict in the Middle East?

[C]

Well, if you look at energy markets and prices there, they're largely moving sideways. So oil is above 110 US dollars, gas around Euro 50. So we somehow got used to these levels and we have seen them basically over the past days and past weeks. If you look at the conflict itself, Iran's retaliatory strikes in the region remain somewhat more intense compared to the levels that we've seen end of March. And particularly it's the United Arab Emirates and Kuwait that seem to be targeted these days. Also there's a flurry of negotiation activity, including the mediation efforts by Pakistan and more kind of Hormuz trade related initiatives by Oman and the UK. But the common ground between the states and Iran really seems minuscule so far. And the most focus obviously is as we have heard about the US Threat about escalation linked to the opening of Strait of Hormuz. And this most likely keeps energy markets quite anxious and nervous for the time being.

[A]

Okay, so the US Is demanding this opening of the Strait of Hormuz, yet there seem to be some ships actually passing this choke point. So what's the status?

[C]

Yes, that's a very important point. So the definition and how open this trade is, how open this trade of Hormuz seems to be really a matter of perspective coming in quite different shades. Basically the Iran safeguarded trade around Hormuz picked up over the long weekend with more countries, in fact more cargoes joining the route. So there's been the first natural gas vessel transiting out of the Gulf and besides the Asian buyers, it's also now some Gulf nations that actually seem to be collaborating with Iran and kind of using the safeguarding to ship their their cargo out. According to a specific data provider, Windward there's up to 20 vessels, so visible ones but also dark ones that passed a choke point in outbound direction over the past days. Of course, if you look back, such kind of trade activity is a fraction of the pre conflict levels, but combined with the other outlets that we see the alternative routes, it really helps to mitigate the supply shock and kind of provides much needed breathing space, especially for the energy related supply chains to partially adjust to this massive shock that we're seeing there. But I think it's also important that this development about this Iran safeguarder trade really shows that if you look at such a conflict as the geopolitical level and then there's the economic level and these levels are two separate levels.

[A]

Okay then, so reflecting on that, what's our latest assessment for energy markets?

[C]

Norbert well, the conflict remains in this early phase of negotiations and deal making, but the the common ground is really very, very tiny. So far the adverses try to seem to try to put themselves in a good position for this deal making, which for us suggests that this conflict is very close to high noon. So possibly there's some third escalation just to de escalate afterwards. And this just creates an overall setting of very much nervousness and in the market. But we keep our neutral view for oil for the time being and we keep our view that or the thesis that oil prices follow this usual pattern of a short lift, well in the sense of an oil market shortlift, very pronounced spike and we should continue season easing for the remainder of the year heading into summer. That's it from Energy Markets.

[A]

Thank you very much for joining us and bringing us an update this morning.

[C]

Novit, thanks for having me.

[A]

Well, that's it for today's podcast. Thank you all for listening and of course thanks to Mike and Norbert for their input today. Please do tune in again tomorrow when Helen Freer will be here in the studio hosting more of our experts to discuss what's moving markets. So don't miss that. Meanwhile, good luck today and goodbye for now.

[D]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal podcasts for further other important legal information.