Written by Ashwin Gurung
On Tuesday evening, US President Donald Trump announced a two-week ceasefire with Iran, conditional on the reopening of the Strait of Hormuz, the narrow waterway through which a large portion of the world’s oil supply flows. Markets reacted immediately and broadly positively, driving a broad-based rally across global markets.
The MSCI All Country World Index of global equities returned +2.4%. Bonds also moved higher, with the Bloomberg Global Aggregate returning +0.2% in GBP-hedged terms. Conversely, oil prices fell sharply, with Brent crude dropping by more than 13% in a single day. As a result, commodities were the one area of weakness over the week, with the Bloomberg Commodity Index falling -3.6% in GBP-hedged terms. However, oil prices remain well above pre-war levels, and the Bloomberg Commodity index is still up +21.8% year to date, reflecting the scale of energy market disruption since the conflict began.
Emerging markets were the standout performers of the week, with the MSCI Emerging Markets Index rising +5.7% over the week, which had been among the hardest hit in recent weeks due to the heavy reliance on energy imports for some countries that are larger constituents of the index and the ongoing pressure that elevated oil prices place on their economies. Similarly, European markets also responded well, with the MSCI Europe ex UK index rising +3.4%. Japan’s equity market also recovered ground, but weakening of the yen versus Sterling meant the MSCI Japan Index returned +1.4%, lowering returns for GBP investors.
Artificial intelligence-related stocks also provided support to markets during the week, with large technology and semiconductor companies rising on strong demand for computing power and ongoing investment in the sector. The Nasdaq 100 Index rose +2.8%, and the MSCI Taiwan rose +8.8%, reflecting its significant exposure to the semiconductor industry, while MSCI Korea’s +8.1% return was boosted by Samsung’s record quarterly earnings, which were driven by surging demand for AI memory chips.
On the economic front, US inflation data for March showed consumer prices rose 3.3% year-on-year, accelerating from 2.4% in February. Nearly three-quarters of the increase was driven by the rise in energy costs, with the energy index climbing +10.9% and gasoline prices soaring +21.2% in March, a sign that the recent rise in energy prices is beginning to feed through into the cost of everyday goods. Core inflation, which strips out food and energy, rose a more moderate 2.6%. Elsewhere, US economic growth for the final quarter of 2025 was also revised down slightly, from 0.7% to 0.5%. The Federal Reserve is widely expected to keep interest rates on hold at its next meeting.
While uncertainty remains, and the weeks ahead are likely to bring further volatility, it was a positive week for markets following the ceasefire deal. A good reminder that markets can recover quickly, and that staying invested with a diversified, long-term approach continues to be well placed to weather the ups and downs.
All performance figures are stated in Sterling terms, unless otherwise specified.
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