This week’s market is shifting quickly, but the underlying data is what really matters. In this edition of Steady Investor, we break down what investors should be paying attention to right now:
- Markets rally despite ongoing war
- Consumer sentiment hits record low
- Housing slows amid supply constraints
Stocks Rally as the Market Looks Past the War – Despite an ongoing conflict that has disrupted one of the world’s most critical energy chokepoints, it appears that markets have started to move on. The Nasdaq surged double digits over a 10-session winning streak, its longest since 2021, while the S&P 500 crossed the 7,000 threshold to reach a new record. Oil prices, after spiking earlier in the conflict, have also pulled back meaningfully from their recent peaks.In our view, the rally has been driven by a return to fundamentals, namely stronger-than-expected earnings and continued resilience in the U.S. economy. Companies across sectors continue to point to steady consumer demand and ongoing borrowing, even in the face of higher energy costs. What may be most notable, however, is how quickly markets have moved past the uncertainty. Historically, equity markets tend to price in geopolitical shocks far earlier than the news cycle would suggest. Across several major conflicts, markets have typically bottomed within roughly the first 10% of a war’s duration. Even in World War II, which lasted six years, stocks reached their low just months after fighting began. The pattern reflects how quickly markets adjust to new information, even when the ultimate outcome remains unclear.None of this suggests risks have disappeared. A prolonged conflict or renewed spike in oil prices could still pressure growth and inflation. But for now, markets appear focused less on today’s disruption and more on the path forward, one where earnings, liquidity, and economic momentum continue to provide support.1
Shifting Market Drivers Are Reshaping Performance – Here’s How
Markets haven’t lost momentum, but they’ve become more selective. Interest rates and earnings are shifting, and different stocks are leading the way.
Our latest April Stock Market Outlook Report5 takes a closer look at what’s changing beneath the surface, and how investors can make sense of it. Inside, you’ll learn:
- Asset allocation guidelines for today’s market environment
- Expert forecasts for inflation, rates, and economic trends
- Industry tables and rankings to help you spot opportunities
- Buy-side and sell-side consensus insights at a glance
- And much more!
If you have $500,000 or more to invest, claim your complimentary copy of the report and see how shifting market trends could influence opportunities in the months ahead.
IT’S FREE. Download our latest April Stock Market Outlook Report3
Consumer Sentiment Plummets. Is that a Good Thing for Markets? The University of Michigan Consumer Sentiment Index fell to 47.6 in April, which is its lowest reading in the survey’s 74-year history. Not during the 2008 Global Financial Crisis, the early days of COVID, or even the stagflation of the 1970s did sentiment fall this far. The prior low, set in June 2022, was 50. This month’s reading broke through that floor decisively, as seen in the chart below:
The drivers are straightforward. Gasoline prices surged 21% in a single month amid escalating tensions tied to the Iran conflict, pushing one-year inflation expectations from 3.8% to 4.8%—the largest monthly jump in a year. Consumers reported weaker personal finances and deteriorating buying conditions for big-ticket items like cars and durable goods. Historically, however, extreme pessimism hasn’t been a reliable warning sign for markets. In fact, it’s often the opposite. Research shows that the S&P 500 has returned an average of roughly 25% in the 12 months following sentiment troughs. That’s because sentiment tends to follow markets, not lead them. When expectations are already depressed, it lowers the bar for positive surprises.
A Sluggish Housing Market Meets a Persistent Supply Problem – The U.S. housing market is entering what is usually its busiest season on weak footing. Existing home sales fell 3.6% in March to an annualized pace of 3.98 million, one of the sharpest monthly declines in the past year. Higher mortgage rates, which climbed back above 6.3% following the onset of the Iran conflict, have only added to longstanding affordability pressures, leaving many prospective buyers either priced out or unwilling to commit. This dynamic is being reinforced by the supply side. Although inventory of existing homes has increased modestly, it remains historically low, helping lift the median home price 1.4% from a year earlier to $408,800. At the same time, many current homeowners remain reluctant to sell, since doing so would likely mean giving up a lower locked-in mortgage rate and taking on much higher borrowing costs for their next home. Builders are trying to fill some of that gap, but not without compromise. In an effort to preserve affordability, many are shrinking floor plans, simplifying designs, and opting for lower-cost materials. For the broader economy, however, the approach matters less than the outcome. Residential investment feeds into GDP mainly through new construction rather than existing home sales, so if tight inventory and elevated prices encourage even a modest increase in building activity, the housing market’s weakness could still end up providing a small tailwind to growth.4
What’s Driving the Market Right Now – As market conditions evolve, understanding what’s changing can make all the difference.
Our latest April Stock Market Outlook Report5 highlights the key trends investors should be watching, and how to think about them. You’ll get insights into:
- Asset allocation guidelines for today’s market environment
- Expert forecasts for inflation, rates, and economic trends
- Industry tables and rankings to help you spot opportunities
- Buy-side and sell-side consensus insights at a glance
- And much more!
If you have $500,000 or more to invest, claim your complimentary copy of the report and see how shifting market trends could influence opportunities in the months ahead.
Disclosure
2 Zacks Investment Management reserves the right to amend the terms or rescind the free-Stock Market Outlook Report offer at any time and for any reason at its discretion.
3 Survey of Consumers. 2026. https://www.sca.isr.umich.edu/charts.html
4 Wall Street Journal. April 13, 2026. https://www.wsj.com/real-estate/flimsier-cabinets-and-fewer-windows-home-builders-are-skimping-on-the-basics-59191680?mod=djem10point
5 Zacks Investment Management reserves the right to amend the terms or rescind the free-Stock Market Outlook Report offer at any time and for any reason at its discretion.
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