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Staying the Course Is Working: Markets at Records, Earnings Beating, War Edging Toward Resolution
Hoxton Blog • Staying the Course Is Working: Markets at Records, Earnings Beating, War Edging Toward Resolution
Eight weeks into the Iran conflict, the message from financial markets is becoming clearer with each passing day.
The businesses behind your portfolio are proving far more resilient than the worst-case scenarios suggested, and that resilience is now showing up consistently in both market levels and company results.
The S&P 500 is trading above its pre-war all-time high. Q1 earnings are running ahead of expectations. And this week, the ceasefire was extended once again, keeping diplomatic channels open and reducing the immediate risk of escalation.
This does not mean the situation is resolved. Oil prices remain elevated, the Strait of Hormuz is not fully open, and negotiations are progressing more slowly than policymakers would like.
But direction matters more than perfection, and the direction remains constructive. Your financial plan was built with this kind of uncertainty in mind, and staying invested has continued to be the right course of action.
The Week in Markets: What Changed
The early part of the week reflected genuine uncertainty. With the ceasefire due to expire on Wednesday, April 22, and no confirmed progress on peace talks, investors began to price in the possibility of renewed escalation.
Equity markets softened on Monday and Tuesday, and the Nasdaq’s 13-day winning streak came to an end as sentiment turned more cautious.
That tone shifted decisively on Tuesday evening when the ceasefire extension was confirmed. By Wednesday, markets had responded in a broad and immediate way, recovering earlier losses and pushing higher across major indices.
| Market | Tuesday Close (pre-extension) | Wednesday Close (post-extension) | Move |
|---|---|---|---|
| S&P 500 | 7,063 (approx.) | 7,137.90 | +1.05% |
| Nasdaq Composite | ~24,261 | 24,657.57 (new intraday high) | +1.64% |
| Dow Jones | ~49,149 | 49,490.03 | +0.69% |
| WTI Crude Oil | ~$89.67 | Edged higher | Steady |
| 10-Year Treasury Yield | 4.288% | 4.27% | Modest decline |
What stands out is not simply the recovery, but the pattern behind it. Markets weakened as uncertainty increased, then rebounded as soon as clarity returned.
This is not the behaviour of a market that is pricing in a prolonged and damaging conflict. It is the behaviour of a market that expects a resolution and is reacting to short-term developments along the way.
The Iran Situation: Progress, Not Perfection
The extension of the ceasefire provides additional time for negotiations and, importantly, signals a continued willingness on both sides to avoid escalation. While the language from policymakers suggests that progress is being made, the path to a full resolution remains uneven.
Oil prices, which traded in the $89–95 range this week, capture this balance well. The immediate risk of disruption has eased, but supply constraints have not yet been fully resolved.
Even if a formal agreement is reached in the near term, the after-effects of the disruption will take time to unwind. Inventory levels are already tightening, and energy prices are likely to remain a factor in inflation expectations and central bank decision-making in the short term.
Earnings Season: Quietly Strong
Alongside the geopolitical backdrop, Q1 earnings season is providing an important counterbalance, and the results so far have been notably strong.
Early data shows that 89% of companies have exceeded earnings expectations, with revenue growth of 9.9% year-on-year and earnings growth of 13.2%.
| Earnings Metric | Q1 2026 Reading | Context / Comparison |
|---|---|---|
| EPS beat rate | 89% of companies beating estimates | Above 5-year average of 78% and 10-year average of 75% |
| Revenue beat rate | 84% beating estimates | Broad-based across most sectors |
| Blended earnings growth (YoY) | +13.2% | Sixth consecutive quarter of double-digit growth |
| Revenue growth (YoY) | +9.9% | Highest since Q3 2022 |
| Net profit margin | 13.2% | Up from 12.8% a year ago; above 5-year average of 12.2% |
| Full-year 2026 EPS growth estimate | +18% | Revised up from ~13% at start of year |
| All sectors reporting revenue growth | Yes | Broad-based strength across all eleven sectors |
What is particularly encouraging is the breadth of this performance. All eleven sectors are reporting positive revenue growth, which points to underlying strength across the economy rather than reliance on a narrow group of companies.
The Economy: Holding Up
The broader economic backdrop continues to support this picture of resilience. The labour market remains stable, with jobless claims coming in below expectations and employment growth continuing at a steady pace.
Consumer spending has shown some signs of pressure, particularly as higher energy costs have filtered through to household budgets.
However, this is a dynamic that tends to reverse relatively quickly as energy prices stabilise. As supply conditions improve and oil prices ease, the drag on consumer spending should diminish, allowing the underlying strength of the labour market to reassert itself.
What This Week Really Shows
This week offered a clear illustration of how markets respond to uncertainty, and why reacting to headlines can be costly. Early-week declines reflected concern around the ceasefire deadline, while the recovery followed the confirmation of its extension.
| Period | The Fear | The Outcome | Lesson |
|---|---|---|---|
| Feb 28 – Mar 7 | War begins; oil surges | Markets fall ~10% before stabilising | Avoid panic selling |
| Mar 8 – Apr 7 | Failed ceasefire talks | Continued volatility | Staying invested preserves flexibility |
| Apr 8 | Ceasefire announced | Markets surge ~11% in 10 sessions | Best days are hard to time |
| Apr 15 – 16 | New highs reached | Continued rally | Highs are milestones, not ceilings |
| Apr 21 – 22 | Ceasefire expiry fear | Markets recover on extension | Pattern repeats |
This pattern has repeated several times over the past eight weeks. Periods of heightened concern have been followed by stabilisation and then recovery.
Looking Ahead: What Matters Now
The coming weeks are likely to be shaped by two parallel developments: the pace of diplomatic progress and the continuation of earnings season.
| What We Are Watching | Current Status | Potential Market Impact |
|---|---|---|
| Ceasefire progress | Extended; talks ongoing | Key catalyst for full recovery |
| Strait of Hormuz | Partial reopening | Lower oil, easing inflation |
| Earnings season | Strong early results | Supports equity valuations |
| Central banks | Holding stance | Rate cuts would support markets |
| Consumer spending | Under pressure | Recovery likely as energy eases |
| Global growth outlook | Slightly reduced | Could improve with de-escalation |
A transition from temporary ceasefire to a more permanent agreement would be a significant catalyst, particularly for energy markets and inflation expectations. At the same time, continued strength in corporate earnings would reinforce the current foundation for equities.
We continue to monitor both closely and will keep you updated as the situation evolves.
Our Message to You
Eight weeks ago, markets were responding to a sudden and uncertain shock. At that point, the advice was to remain invested, stay disciplined, and trust the structure of your financial plan.
The data now provides strong support for that approach. Markets are at record levels, earnings are growing at a healthy pace, and the broader economy remains stable despite the external pressure. Diplomatic progress, while gradual, is continuing.
This does not remove risk from the system. Oil prices remain elevated, inflation is still a consideration for central banks, and geopolitical developments can change quickly. There will be further periods of volatility and more challenging headlines.
However, the consistent theme is that markets have been able to absorb these shocks and move forward. The investors who have benefited are those who remained invested through uncertainty, allowing time and underlying business performance to do the heavy lifting.
The message remains unchanged because the evidence continues to support it. Staying invested works. Time in the market builds wealth. And the businesses you own are more resilient than short-term events often suggest.
If you would like to discuss this week’s developments, review your portfolio, or explore what this means for your long-term plan, please get in touch with your relationship manager or contact us directly at client.services@hoxtonwealth.com or via WhatsApp on +44 7384 100200.
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