The Banks Report, the Ceasefire Holds, and Earnings Season Begins in Earnest

The market that started this week is not the market that existed seven days ago. A two-week ceasefire between the United States and Iran, announced just before Trump's Tuesday deadline, triggered the biggest single-day rally in months, erased weeks of oil-driven fear premium, and reset the macro conversation in ways that will define the next quarter of trading.

Now the hard work begins. This week is when earnings season truly arrives, and the companies reporting are not small. Goldman Sachs opens Monday. JPMorgan Chase, Citigroup, Wells Fargo, BlackRock, and Johnson and Johnson follow on Tuesday. Morgan Stanley and Bank of America land Wednesday. Taiwan Semiconductor and Netflix close out the week Thursday. The financial sector alone will tell investors more about the health of the US economy than any single data point has managed to do since the conflict began.

Here is what to watch and why it matters.

Oil's 17% single-day plunge following the ceasefire announcement was the sharpest move in six years. WTI, which had briefly touched $117 per barrel during the week, fell back toward $93 as tanker traffic through the Strait of Hormuz began to resume. The move is significant not just because it lowers energy costs across the economy but because of what it did to the Federal Reserve's options.

With oil falling and the two-week diplomatic window open, markets have recalibrated away from the rate hike scenario that had been briefly priced in during the worst of the conflict. The probability of a Fed rate cut by December climbed back to 43% following the ceasefire announcement, up from just 14% at the peak of war anxiety. The 10-year Treasury yield fell 13 basis points over the course of last week to 4.31%, reflecting a meaningful reduction in the inflation expectations that had been embedded in long-dated bonds.

The March CPI report released Friday provided a useful frame for what the conflict actually did to consumer prices. Headline CPI rose 0.9% for the month, the hottest reading since May 2022, driven almost entirely by an 18% surge in gasoline prices. But core CPI, which excludes food and energy, came in at just 0.2%, below the 0.3% consensus. Annual core held at 2.6%, also below expectations. The message in that split is clear: the inflation shock from the war was real, but it was concentrated in energy rather than spreading into the broader economy. That is the best possible outcome from a Fed perspective, and it materially reduces the probability that the central bank feels forced to hike rates even if oil remains elevated for a few more weeks.

The risk in this framing is the lag effect. There is a delay between elevated oil prices and their eventual pass-through into core inflation. Transportation costs, food production inputs, and manufacturing all absorb energy price changes over months rather than instantly. If the ceasefire holds and oil falls further, that lag never fully materializes. If the ceasefire fractures, the pass-through risk returns immediately.

Tuesday is the most important single day of earnings season, with JPMorgan Chase, Citigroup, Wells Fargo, and BlackRock all reporting before the open. Each of these institutions has a front-row seat to the economic damage and resilience that played out over the past six weeks, and their commentary will matter as much as their numbers.

JPMorgan's Q1 results will be watched for several things simultaneously. Loan growth and net interest income will signal whether higher oil prices and economic uncertainty slowed borrowing activity in the first quarter. Investment banking revenues will indicate whether the capital markets recovery that had been building through January and February stalled when the conflict began. And CEO Jamie Dimon's earnings call commentary, which always carries outsized weight in financial circles, will offer the clearest institutional perspective on where corporate America thinks the macro environment is heading.

BlackRock's results matter for a different reason. The firm manages over $11 trillion in assets and operates one of the largest ETF businesses in the world. Its flows data will show whether institutional investors were net sellers or buyers of risk assets through March, and its commentary on the AI infrastructure buildout theme will be worth listening to carefully given the firm's significant positioning in technology and data center-adjacent equities.

Morgan Stanley and Bank of America follow Wednesday and will provide additional color on wealth management client behavior and trading revenue during one of the most volatile quarters in recent memory.

Among all the earnings this week, Taiwan Semiconductor Manufacturing's Thursday report may be the most consequential for investors watching the AI infrastructure theme rather than just the geopolitical story.

TSMC reported a 35% rise in first quarter revenue in a preliminary release last week, exceeding analyst expectations. Thursday's full earnings call will provide the detailed breakdown of where that revenue came from and, more importantly, what management is guiding for the second half of the year. TSMC's forward revenue guidance is as close to a real-time signal of AI chip demand as exists in the public market, since the company manufactures silicon for Nvidia, Apple, AMD, and virtually every major AI chip program in the world.

If TSMC confirms that advanced node demand from AI customers remains strong despite the macro turbulence of Q1, it will validate the thesis that the semiconductor sector's recent selloff was overdone and that the underlying demand cycle is intact. The PHLX Semiconductor Index hit fresh all-time highs following the ceasefire rally last week, a signal that institutional money moved back into chips immediately once the energy overhang lifted.

Netflix reporting Thursday evening closes the week with a read on the consumer that the banks cannot fully provide. Subscriber growth, engagement metrics, and guidance into Q2 will show whether the war's impact on consumer confidence translated into reduced discretionary spending on entertainment, or whether streaming remained sticky enough to hold through the volatility.

Goldman Sachs upgraded Netflix to buy last week, citing continued content leadership and high confidence in multiyear capital return to shareholders. That upgrade, combined with a stock gain on the day it was announced, signals that institutional confidence in the consumer-facing technology sector is beginning to rebuild following weeks of defensive positioning.

The most important tactical development of the past week was not any single earnings report or data point. It was the rotation. Money that had been sitting in energy, defense, gold, and cash began moving back into technology, consumer discretionary, and industrials the moment the ceasefire was announced. The Nasdaq's roughly 4% weekly gain significantly outpaced the Dow's 2.8%, a reversal of the value-over-growth pattern that defined all of Q1.

Whether that rotation has staying power depends entirely on the durability of the ceasefire, the trajectory of oil from here, and what the banks and chipmakers say this week about the actual state of the underlying economy. A market that spent five weeks pricing in energy crisis, stagflation, and potential rate hikes now needs to reprice back toward a world where oil falls, core inflation stays contained, earnings hold up, and the Fed eventually gets back to easing.

That repricing has started. This week will tell you how far it can go.

Monday, April 13: Existing Home Sales. Earnings: Goldman Sachs.

Tuesday, April 14: Producer Price Index, NFIB Small Business Index. Earnings: JPMorgan Chase, Citigroup, Wells Fargo, BlackRock, Johnson and Johnson.

Wednesday, April 15: Empire State Manufacturing Index, Import and Export Price Index. Earnings: Morgan Stanley, Bank of America, PNC Financial, Progressive.

Thursday, April 16: Initial Jobless Claims, Philadelphia Fed Manufacturing Index. Earnings: Taiwan Semiconductor, Netflix, PepsiCo, Abbott Labs.

Friday, April 17: Housing Starts and Building Permits. Earnings: Truist Financial, Fifth Third Bancorp, State Street.