Market Recap

Executive Summary

Global equity markets rebounded over the week ending 02 April 2026, as tentative signs of Middle East de-escalation lifted risk sentiment across most major regions. While the prospect of a ceasefire provided near-term relief, elevated energy prices, persistent inflation pressures, and an uncertain geopolitical backdrop continue to warrant close attention.

U.S. large caps led the advance, buoyed by easing Treasury yields and measured commentary from the Federal Reserve. European equities rallied broadly, though the region continues to navigate the tension between improving sentiment and rising energy-driven inflation. Asian markets diverged, reflecting differing exposures to the ongoing geopolitical developments.

Commodities and digital assets also responded to the shifting landscape, with moves in oil, gold, and bitcoin each telling a distinct part of the week’s story.

Geopolitical developments remain the dominant variable shaping near-term market dynamics. With energy supply routes, inflation trajectories, and central bank policy responses all in focus, investors should anticipate continued sensitivity to headline risk. In this environment, disciplined portfolio construction — rather than short-term prediction — remains the foundation of resilience.

Market Snapshot

Weekly performance across major global indices (week ending 02 April 2026):

Foreign Exchange

(For the week ending 02 April 2026)

U.S. Markets Overview

Equities and Policy

U.S. equity indexes finished the holiday-shortened week higher, as shifting geopolitical headlines and tentative optimism around Middle East de-escalation supported risk sentiment. The Nasdaq Composite led gains, posting its best weekly performance since November, while the S&P 500 and Dow Jones Industrial Average advanced 3.36% and 2.96%, respectively. Smaller-cap indexes also posted solid gains. Treasury yields eased, with the 10-year note declining to approximately 4.31% from 4.44%, supported by comments from Federal Reserve Chair Jerome Powell that helped temper near-term inflation concerns.

Economic Data

Labor market data presented a mixed picture. ADP reported private employers added 62,000 jobs in March, ahead of estimates but below February’s revised gain. Initial jobless claims improved to 202,000, while continuing claims rose to 1.841 million. Job openings declined to 6.9 million in February, with hiring at its lowest level since 2020. Consumer confidence edged higher to 91.8 in March, as improving views of current conditions offset a more cautious outlook. Manufacturing activity expanded for a third consecutive month (PMI: 52.7), though employment contracted for the 30th straight month and input cost pressures accelerated to their highest level since June 2022.

Fixed Income

U.S. Treasuries advanced as yields generally declined, supported by geopolitical headlines and Fed commentary that eased some inflation concerns. High yield bonds were little changed amid elevated trading activity.

European Markets

Pan-European equities advanced broadly, with the STOXX Europe 600 Index rising 3.71% in local currency terms. Sentiment improved on hopes that Middle East tensions may prove shorter-lived than initially feared. Germany’s DAX added 3.89%, Italy’s FTSE MIB rose 5.18%, France’s CAC 40 climbed 3.38%, and the UK’s FTSE 100 gained 4.70%.

Eurozone annual inflation rose to 2.5% in March, driven by energy costs surging 4.9%. Germany’s 2026 growth forecast was revised down to 0.6% from 1.3% due to the energy shock. Manufacturing activity contracted in Spain (PMI: 48.7) but improved in Sweden (PMI: 56.3). In the UK, manufacturing PMI was revised lower to 51.0, though house price growth accelerated to +2.2% year over year in March.

Asian Markets

Japan

Japanese equity markets declined through Thursday, with the Nikkei 225 falling 1.7% and TOPIX down 1.0%. Sentiment weakened after U.S. comments dashed hopes for a firm de-escalation timeline, lifting oil prices and weighing on Japan’s oil-import-dependent economy. The yen strengthened to approximately 159.3 per U.S. dollar, following comments from currency officials suggesting potential intervention against speculative moves. The 10-year JGB yield rose to 2.39%. Tokyo-area core CPI rose 1.7% year over year in March, slightly below expectations.

China

Mainland Chinese equity markets were mixed, with the CSI 300 slipping 0.53%, Shanghai Composite edging up 0.14%, and Hong Kong’s Hang Seng gaining 0.66%. March PMI data showed improvement across official and private gauges, with the official Manufacturing PMI rising to 50.4 (fastest in a year) and the private S&P Global gauge expanding to 50.8 for a fourth straight month. However, both surveys noted rising input costs. China and Pakistan jointly proposed a five-point peace plan for the Middle East, while Beijing removed VAT export rebates on clean energy products effective 1 April.

Commodities

Oil & Gold

Brent crude eased 3.14% over the week to settle near $109/barrel, as ceasefire speculation tempered near-term supply concerns. Gold advanced 3.55% to approximately $4,652/oz, supported by safe-haven demand amid ongoing geopolitical uncertainty — a reminder that risk sentiment, while improving, remains fragile.

Aluminium & Agricultural Commodities

The conflict’s reach extended beyond energy markets this week. Aluminium prices surged 7% following Iranian strikes on production facilities in Bahrain and the UAE, curtailing regional output. With the Middle East accounting for approximately 9% of global aluminium production, sustained disruption could keep prices elevated beyond current forecasts.

Agricultural markets also face compounding pressures. Higher energy costs are feeding directly into production expenses, while reduced LNG supply from the region is curtailing fertiliser output. Adding to these headwinds, NOAA has placed a 60% probability on a “super El Niño” forming in June — a development that historically drives significant upside in soft commodity prices such as cocoa and coffee, and risks complicating food inflation dynamics for central banks, particularly in emerging markets.

Crypto

Bitcoin advanced approximately 4% to trade near $70,000, supported by growing hopes of a Middle East ceasefire. Strategy (MSTR) reinforced its position as the largest corporate holder of the cryptocurrency, disclosing a purchase of approximately $330 million worth of bitcoin between April 1-5.

Regional Summary

Week Ahead

Market attention is likely to remain focused on developments in the Middle East and their implications for energy supply routes and inflation trajectories. Key variables include:

1. whether de-escalation efforts gain traction and shipping through the Strait of Hormuz normalizes,
2. incoming inflation data and central bank commentary on policy calibration, and
3. the persistence of energy-driven cost pressures on growth momentum.

Investors should anticipate continued sensitivity to geopolitical headlines and energy market developments, with volatility likely to persist as the situation evolves.

Disclaimer

This document has been prepared by Trivesta Funds Pty Ltd (ACN 627 270 900, AR 1274820) of Trivesta Capital Ltd (AFSL 320497) for general information purposes only and is intended for wholesale clients only. It is not financial product advice and does not take into account your objectives, financial situation or needs. Before acting on any information, consider its appropriateness and seek independent professional advice.

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