The Market Is Bouncing Back. Here’s What You Need to Know.

April 13, 2026 | AUAM

The past week has been a sharp reminder of how fast sentiment can shift in markets. After weeks of pressure tied to the U.S.-Iran conflict, stocks are showing signs of life, and there’s real reason to pay attention.

Following the April 7 ceasefire, the S&P 500 moved roughly 7% above its March lows and is now sitting only about 3% below its January all-time high. That is a meaningful swing in a short window. The rebound in risk appetite drove the S&P 500 up 2.5% on April 8, with U.S. crude settling below $95, easing concerns about a prolonged energy crisis and reviving bets that the Federal Reserve will cut rates this year.

What caused the selloff in the first place? The most immediate source of volatility was the closure of the Strait of Hormuz, stemming from U.S. and Israeli strikes against Iran. U.S. oil prices rose more than 40% after the conflict began, and the S&P 500 fell roughly 7% below its prior peak before stabilizing. That kind of energy shock ripples fast through inflation expectations, rate outlooks, and risk appetite all at once.

But here is the historical context worth keeping in mind. The stock market has fallen an average of just 4% across 30 major geopolitical events since 1939, according to Deutsche Bank Research. In the first three weeks of a geopolitical shock, stocks typically fall about 6% before recovering fully in the following three. This playbook has played out before. The S&P 500 bottomed on March 8, 2022 after Russia’s invasion of Ukraine, then rebounded roughly 9% by the end of that month, erasing most of the initial losses.

On the earnings front, the backdrop remains supportive. Analysts expect S&P 500 earnings to grow roughly 13% in Q1 2026, which would mark a sixth consecutive quarter of double-digit gains, according to FactSet. Big bank earnings kick off this week, with JPMorgan, Goldman Sachs, Citigroup, Wells Fargo, Morgan Stanley, and Bank of America all reporting. That slate of results will be the market’s next major test.

Strategists note that if geopolitical tensions continue to ease, there is a real opportunity for markets to push higher, particularly if earnings season delivers the positive catalyst investors have been waiting on for the past six weeks.

The message from history is consistent: geopolitical shocks are sharp but typically temporary. Fundamentals tend to reassert themselves once uncertainty resolves. We will be watching earnings closely this week and updating our views accordingly.

This post is for informational purposes only and does not constitute investment advice.