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Last updated: April 1, 2026, 8:30 AM ET

Geopolitical Calm Fuels Global Equity Surge

Global markets rallied strongly as President Trump signaled a quick end to the conflict in Iran, with Asian stocks experiencing their largest surge in nearly a year tracking Wall Street's optimism. This sentiment pushed Brent crude briefly below $100 a barrel, easing inflationary fears that had previously threatened corporate earnings and the broader economy as higher-for-longer oil prices loomed. U.S. stock futures rose 0.8% in premarket trading ahead of the President's 9 p.m. address, while European stock futures also jumped significantly on expectations that the war could conclude within two to three weeks.

Fixed Income & Monetary Policy Expectations

The optimism surrounding a potential resolution to the Middle East conflict immediately fueled bets on Fed rate cuts, causing U.S. Treasuries to extend prior gains. This shift was mirrored across the Atlantic, where Eurozone bond yields fell sharply and UK Gilts surged as yields tumbled, reflecting expectations that central banks might ease policy sooner than previously anticipated. However, underlying economic vulnerabilities remain, with the Federal Reserve facing war-driven inflation and already frayed credibility as it cleans up after the previous inflationary cycle.

Energy Market Disruptions and Fallout

Despite the relief rally, the lingering effects of the conflict continue to bite, particularly in energy markets where Saudi oil exports fell by 50% in March due to the Strait of Hormuz shutdown, forcing rerouting of crude flows. The war has also severely impacted consumer costs globally, with gasoline prices surpassing the $4 milestone in the U.S., raising domestic pressure. In Europe, the EU proposed adjustments to its carbon trading program to temper soaring energy bills, while Germany's leading research institutes cut their economic growth forecast to less than half its expected pace due to the Middle East conflict according to official advisers.

Corporate Sector Repercussions and Dealmaking

The geopolitical shockwaves are creating divergent corporate outcomes, with BYD Co.'s exports and overseas sales climbing 65% in March as demand for electric vehicles rose due to high oil prices, even as domestic sales lagged. Conversely, the disruption is causing supply chain stress in other sectors; UK factories are enduring their most intense strain since the Russia-Ukraine aftermath according to a PMI survey, and UK homebuilder Berkeley Group halted land purchases due to market uncertainty and rising regulatory burdens. Nevertheless, global dealmaking momentum remains strong, with the M&A tally hitting $1.3 trillion thanks to a raft of mega mergers, including 22 transactions valued above $10 billion in the first quarter marking a record start to the year.

Shifts in Private Credit and Market Structure

The private credit space is facing intense scrutiny following recent collapses, with regulators alleging that KPMG LLP failed to properly value loans held by funds managed by the failed lender Bridging Finance Inc. This stress is testing the strategies of major players; Oaktree's measured approach contrasts with peers pursuing aggressive scale, while firms like Stephen Nesbitt’s Cliffwater are actively working to calm investors amid steep withdrawals. Meanwhile, credit managers like John Aylward’s Sona Asset Management are looking overseas, eyeing Japan for new opportunities as they expand their global footprint.

Regional Market Movements and Corporate Focus

Investors in Asia are embracing risk, evidenced by the broad equity rally and the sharpest decline in 11 months for Asian credit-default swaps. In contrast, Indian bonds face potential turbulence as the Reserve Bank of India’s curbs on currency wagers raise the possibility of further rate measures, compounding existing chaos as banks unwind approximately $30 billion in arbitrage trades worsening the currency market shock. In corporate news, KKR & Co. announced a $3.2 billion tender offer for Japan’s Taiyo Holdings, while in Europe, digital bank Monzo decided to exit the U.S. market to concentrate growth efforts in the UK and the continent.

US Domestic and Regulatory Focus

U.S. mortgage rates climbed for the fourth straight week to a seven-month high of 6.57%, dampening activity in home purchases and refinancing. On the regulatory front, the Supreme Court is set to hear a landmark challenge concerning the constitutionality of President Trump’s executive order that targets birthright citizenship for certain children. Separately, the Bank of England issued warnings regarding escalating risks from artificial intelligence, which it suggested could rapidly increase to become a financial stability threat alongside fallout from the Iran war.