Markets were awash in red ink in March 2026 as investors digested the impact of US and Israeli military action against Iran on oil markets and global supply chains. In one month, the S&P 500 lost 5.4% of its value, the Nasdaq shed 7.1%, and the MSCI World dropped 6.4%. But not for the first time in Donald Trump’s US presidency, we have seen steep losses followed by an equally dramatic V-shaped recovery.
Equities continued the recovery that started on 30 March, when Iran and the US announced, on 8 April, that a Pakistan-brokered ceasefire had been agreed, with a further surge today following Iran’s announcement this afternoon that the Strait of Hormuz is now “completely open”. Markets only stumbled initially on Monday when Trump announced plans to blockade the Strait of Hormuz to force Iran to reopen the vital shipping route.
The S&P 500 and Nasdaq both touched new highs this week and are up 7.85% and 11.64%, respectively, for April so far. The MSCI World Index, which Dynasty uses as a cornerstone for many of our clients’ portfolios, is up 7.99% for the month-to-date April and 4.13% for the year-to-date. The Emerging Markets Index, after a 13.06% decline in March, has rebounded by 14.87% in April.
Oil futures and the CBOE Volatility Index (VIX), known as Wall Street’s fear gauge, have dropped this month, suggesting investors are confident that the war will soon end. In addition to the ceasefire, robust corporate earnings in the US have bolstered confidence. April saw strong gains for technology companies in particular, with most Magnificent Seven companies regaining some of the value they had shed earlier this year.
The US dollar is still a marginal 0.58% stronger versus a basket of peer developed market currencies than it was before the war started, but has given up a significant portion of the gains it recorded in the early weeks of the war. Most emerging market currencies have strengthened in April. For example, the rand is trading at R16.33/$ at the time of writing after falling as low as R17.20/$ in late March.
Gold edged higher after a surprisingly weak performance in the early weeks of the war. The metal is trading at around $4,800, up 2.86% from the beginning of the year, but still down from the $5,600 record set in January. The oil price remains elevated at 35% higher than pre-conflict levels, reminding us that the war is not over, even if markets are behaving as if it is.
The recovery echoes the post “Liberation Day” bounce of April 2025, when markets lost around 12% over roughly four trading days and fully reversed those losses in the month that followed. The lesson then, as now, is that markets can move violently in both directions. What ultimately matters is the longer arc shaped by macroeconomics and corporate earnings.
The recovery we have seen so far in April is naturally a relief for our investors. But mindfulness is nonetheless warranted. While we believe Iran and the US are seeking an end to the war, they have yet to come to a final resolution on a few key points.
Risks remain, but for now, it is worth remembering that staying invested through periods like March is exactly what positions investors for recoveries like April. Even for equity investors who may have realised profits early in March, timing the re-entry point has proven to be most challenging.
“So as far as the stock market is concerned, the war is over until further notice.”
– Yardeni Research’s Ed Yardeni
“When April, with its sweet showers, has pierced the drought of March to the root…”
– Geoffrey Chaucer, The Canterbury Tales
Global News
- Global markets have staged a strong recovery in April, with the S&P 500 and Nasdaq climbing to record highs by Wednesday after falling sharply following the outbreak of the Middle East conflict on 28 February. The rebound was supported by signs of diplomatic engagement between the US and Iran, a moderation in oil prices from March peaks, and continued resilience in US economic data. Improved risk sentiment and the reversal of defensive positioning helped drive a broad-based rally across equities, despite ongoing hostilities in the region. Optimism that the war may soon be over helped push the S&P 500 and the tech-heavy Nasdaq to record closing highs for a second straight day on Thursday, and these records are set to be broken again at market close today.
- Pakistan has intensified efforts to secure an extension of the US-Iran ceasefire beyond its expiry next week, with officials on Thursday indicating both sides are open to prolonging the truce to allow more time for negotiations after recent talks failed to yield a breakthrough. Trump struck an optimistic tone, saying a deal with Iran was “looking very good,” while signalling that discussions could resume within days. With this afternoon’s development that the Strait of Hormuz is now open, mediators are pushing for a compromise on other key sticking points.
- Late on Thursday evening, Trump announced that Israel and Lebanon had agreed to a 10-day ceasefire following weeks of intense fighting, with the truce taking effect immediately. The deal was brokered through US-led talks with Israeli and Lebanese leaders – although Hezbollah was not formally included and warned it could respond to violations. Israeli forces are expected to remain in a southern security zone, underscoring the fragility of the agreement and the risk of renewed hostilities.
- The US dollar has shed most of its Iran war-driven gains as improving risk sentiment reduced safe-haven demand. The currency had surged to a 10-month high during the conflict but has since eased back toward pre-war levels as of Wednesday. Analysts have said strong demand for US assets and reduced expectations for rate cuts are likely to limit a sharper decline in the dollar.
- The Fed’s Beige Book showed US economic activity continued to expand at a slight to modest pace through early April 2026, but the Middle East conflict has become a major source of uncertainty for businesses, according to the report released on Wednesday. Companies across multiple regions said the war is complicating decisions on hiring, pricing and investment, with many adopting a cautious “wait-and-see” approach as energy and input costs rise. While consumer spending remained modest and labour market conditions stable, higher fuel prices and growing cost pressures are weighing on margins and dampening confidence in the near-term outlook.
- Former Treasury Secretary Janet Yellen said on Wednesday that she still sees prospects for a US interest-rate cut later this year, though the oil shock from the war in Iran clouds the outlook. Yellen said that, as inflation is expected to stay stable over the long term, it’s unlikely that interest rates will need to go up right now – although this could change. Yellen expressed concerns about the Fed’s independence under Trump, warning that his calls for lower interest rates risk undermining the nation’s credibility.
- US wholesale inflation rose to a three-year high in March 2026, with the Producer Price Index increasing 0.5% month-on-month and 4% year-on-year, according to data released by the Labour Department on Tuesday. The increase was driven largely by a surge in energy costs, particularly a sharp rise in gasoline prices linked to the Middle East conflict, which lifted overall input costs for businesses.
- US Treasury Secretary Scott Bessent said on Tuesday that the Trump administration could reinstate previous tariff levels by early July, following a Supreme Court ruling that struck down many of the levies imposed under emergency powers. He indicated the administration is exploring alternative legal routes to restore the tariffs, signalling a potential return to a more aggressive US trade stance and renewed uncertainty for global trade and investors as current measures near expiry.
- China’s economy grew 5% year on year in the first quarter, beating forecasts and marking the fastest pace in three quarters, as spillovers from the Iran war remained contained. Industrial output rose 5.7%, while retail sales lagged at 1.7%, highlighting weak domestic demand. The stronger data reduces pressure for immediate stimulus, though rising joblessness and a continued property slump point to uneven growth.
- Wall Street’s biggest banks reported strong growth in the first quarter of 2026, generating a combined $47.3 billion in net income as market volatility linked to the Middle East conflict boosted trading revenues across equities and fixed income. Despite these record profits and an improved revenue outlook, the sector cut more than 5,000 jobs over the same period, led by reductions at Wells Fargo, Citigroup and Bank of America, as banks continued efficiency drives and increased investment in technology and AI.
- Taiwan Semiconductor Manufacturing Company (a holding within our global house-view equity fund) reported stronger-than-expected first-quarter 2026 results on Thursday, with profit rising 58% and beating analyst estimates, driven by robust demand for AI chips. The company also raised its full-year revenue growth outlook to more than 30% and signalled capital spending toward the upper end of its $52 billion to $56 billion range, highlighting confidence in sustained AI investment despite the ongoing Middle East conflict, which has so far failed to dent demand.
- Alphabet is poised for a potential windfall of about $100 billion from its early investment in SpaceX, with disclosures on Wednesday showing it held a 6.11% stake at the end of 2025. Based on a projected IPO valuation of around $2 trillion, the stake could be worth as much as $122 billion, though dilution from SpaceX’s merger with xAI could reduce it to roughly $100 billion. The development highlights the scale of returns from Alphabet’s early investment strategy and the significant value expected from SpaceX’s potential listing.
- ASML raised its 2026 sales forecast on Wednesday, indicating it expects revenue of €36 billion to €40 billion, up from a prior range of €34 billion to €39 billion, driven by strong demand for its chipmaking equipment as global investment in AI accelerates. The upgrade followed stronger-than-expected first-quarter results, with customers increasing capacity to meet AI-related chip demand that continues to outstrip supply. However, the outlook was partly offset by weaker-than-expected second-quarter sales guidance, which weighed on the company’s shares.
- As at Thursday’s close the S&P 500 was 3.29% up for the week.
Local News
- The DA will assess the performance of its ministers in President Cyril Ramaphosa’s cabinet to determine whether they should remain in their posts, newly elected leader Geordin Hill-Lewis said on Monday, stressing that positions must be earned. The DA, which holds six Cabinet roles in the 2024 coalition government, is reviewing its participation amid growing political uncertainty. Hill-Lewis also warned that the ANC’s leadership contest ahead of 2027 poses a “profound risk” to coalition stability, highlighting potential implications for governance and policy continuity.
- Ramaphosa appointed veteran negotiator Roelf Meyer as South Africa’s next ambassador to the US, as Pretoria moves to stabilise strained relations. Meyer, a key figure in the negotiations that ended apartheid, will replace Ebrahim Rasool following diplomatic tensions with the Trump administration. The appointment, confirmed by the Presidency on Tuesday, signals a push to reset ties with a key trade partner after a turbulent period in bilateral relations.
- South Africa could achieve economic growth of up to 4% if structural reforms are accelerated, highlighting progress in energy and logistics, as well as increased private-sector participation, Standard Bank CEO Sim Tshabalala said on Wednesday. He noted that the Government of National Unity is helping sustain reform momentum but emphasised that further progress is needed in key areas, including the rule of law, municipal governance, and water infrastructure. Despite this upside potential, Standard Bank currently expects growth of around 2% by 2028.
- South Africa’s Deputy President Paul Mashatile has endorsed an ANC-led populist coalition approach, favouring alignment with the EFF and smaller left-leaning parties as efforts to form a broader reformist alliance lose traction, The shift signals a more pragmatic, numbers-driven strategy to retain power ahead of elections, but also raises concerns around policy direction, governance stability and investor confidence, given the likelihood of more interventionist economic positions emerging from such a coalition.
- Escalating fuel, food and electricity costs are placing growing pressure on South African households, forcing many to rely on credit to make ends meet, Debt Rescue said on Wednesday. Wage growth has remained largely stagnant, leaving consumers unable to keep up with essential expenses, while debt counsellors are seeing rising demand as more households turn to borrowing to bridge the gap between income and costs.
- The Development Bank of Southern Africa has approved a R50 million grant to support a R2.5 billion water outcomes-based bond aimed at improving South Africa’s water security and restoring critical ecosystems. The initiative, led by Rand Merchant Bank, uses a financing model that links investor returns to measurable environmental outcomes such as clearing invasive plants and restoring catchment areas, helping to attract private capital into water infrastructure as pressure on resources intensifies.
- Ninety One’s assets under management rose to £171.8 billion (about R3.8 trillion) by the end of March 2026, bringing the company closer to the R4 trillion milestone. The increase was driven largely by the transfer of Sanlam Investment Management’s active asset management business, which added £16.5 billion in assets, alongside broader growth from existing operations. The deal strengthens Ninety One’s position as a leading asset manager in South Africa, providing access to additional distribution channels and new client flows to support its expansion.
- As at the time of writing, the rand was 0.5% stronger against the dollar, and the ALSI was 0.44% up for the week.
Sources: Dynasty, Bloomberg, CNN, Moneyweb, Business Day, Business Report, Reuters, IOL, etc.
