Wall Street ended the week on a cautiously optimistic note on Friday, with the S&P 500 edging up 0.2% and the Nasdaq adding 0.4%, as investors balanced the relief of a fragile US-Iran ceasefire against lingering uncertainty over the Strait of Hormuz and a consumer sentiment reading that landed at a historic low.
The broader market story of this week is one of whiplash followed by partial recovery. The Dow Jones Industrial Average turned positive for 2026 earlier in the week on Wednesday, when news of the ceasefire sent the index surging 1,325 points, its best single session since April 2025.
That session also saw West Texas Intermediate crude tumble more than 16%, one of the biggest daily oil price drops since April 2020.
The S&P 500 is now on course for its best week since last November, a meaningful move given the five-week losing streak that preceded it as the US-Iran conflict escalated and oil prices climbed toward and above $100 per barrel.
Friday’s inflation data provided some relief on the surface. Consumer prices in March rose 3.3% year-on-year, driven primarily by surging gasoline prices tied to the Strait of Hormuz disruption, but core CPI came in at a contained 0.2% month-on-month, which analysts read as evidence that the Iran war is predominantly an energy-driven inflation shock rather than a broader price spiral taking hold across the economy.
The week’s more unsettling data point was the University of Michigan consumer sentiment index, which plummeted 11% to a preliminary April reading of 47.6, the lowest in the survey’s history going back to 1952 and well below the consensus estimate of 52. Year-ahead inflation expectations jumped a full percentage point to 4.8% in a single month, the largest one-month increase in a year.
Stock futures opened flat on Friday night as the market assessed the Strait of Hormuz situation, with only a handful of tankers having transited the waterway since the ceasefire was announced and oil prices beginning to creep back up again, sitting near $98 by end of day as geopolitical risk premiums remained elevated.
The week’s outperformer in terms of economic data was TSMC, which reported record first-quarter revenue of $35.6 billion, a 35% year-on-year surge driven entirely by AI chip demand from clients including Nvidia and Apple. Shares of the Taiwanese foundry rose 2% in premarket trading on the back of the beat, providing the tech sector with a positive anchor during an otherwise uncertain period.
Consumer discretionary stocks led sector performance on Thursday, rising 2.46%, while energy and healthcare were the only two sectors ending in the red, down 1.16% and 0.19% respectively, a rotation pattern consistent with markets pricing in easing oil supply pressure rather than continued escalation.
