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Daily market update
Risk sentiment is stronger today. The market is trading a de-escalation theme after fresh signals that the U.S.-Iran war could wind down within weeks: equities are bouncing, oil is off the panic highs, gold is firmer as the dollar eases, and FX is shifting away from pure crisis positioning. Early moves showed Brent back near the $100 area, spot gold around $4,718, the dollar index near 99.7, EUR/USD near 1.157, and USD/JPY around 158.6.
News and market movers
Asia led the relief move, with broad gains across the region and especially strong performance in South Korea and Japan, while Europe opened sharply higher as lower oil helped travel, airlines, and banks outperform and left energy stocks lagging. Wall Street had already staged a strong rebound on Tuesday, with the S&P 500 up 2.9%, the Dow up 2.5%, and the Nasdaq up 3.8%, so today’s tone is a continuation of that relief rally rather than a fresh trend break.
Overnight macro tone
The macro backdrop is still mixed. In Europe, the euro area's March flash inflation rose to 2.5% from 1.9%, with energy inflation jumping to 4.9%, which keeps the ECB inflation problem alive even as services cooled a bit. In Japan, the March Tankan showed improving business sentiment, while in China, both the official manufacturing PMI (50.4) and the private PMI (50.8) signaled expansion, helping support the Asia risk bid.
Today’s economic calendar
The main U.S. events are ADP employment at 8:15 a.m. ET, ISM Manufacturing PMI at 10:00 a.m. ET, and the EIA Weekly Petroleum Status Report at 10:30 a.m. ET. Those releases matter more than usual today because they will tell markets whether the narrative should shift from war-driven inflation shock toward slowing growth and renewed Fed-cut hopes, or whether sticky factory-price pressure and tight fuel balances keep the inflation scare alive.
What to watch in the U.S. session
The key question is whether the relief rally gets validation from data. Yesterday’s JOLTS report already showed job openings down to 6.882 million and hiring at the lowest level since March 2020, so a soft ADP/ISM combination would probably reinforce a slower-growth / lower-dollar / lower-yields read, especially if oil keeps easing. My read is that the risk rally can extend only if crude stays under control; if oil re-bids hard, markets will quickly revert to the inflation shock trade again.
FAQ
What is driving markets on April 1, 2026?
The dominant driver is a relief trade linked to hopes that the Middle East conflict could de-escalate, which has lifted equities and reduced some of the extreme pressure in oil.
Why is oil important today?
Oil remains the clearest macro transmission channel because any renewed disruption in the Persian Gulf can quickly feed into inflation expectations, risk sentiment, and central bank pricing. Brent moved back toward the $100 area on April 1 after earlier spikes tied to the conflict.
Which economic events matter most today?
The main U.S. releases are the ADP National Employment Report at 8:15 a.m. ET and the ISM Manufacturing PMI at 10:00 a.m. ET.
Why does euro area inflation matter for markets today?
Euro area annual inflation is estimated at 2.5% for March, up from 1.9% in February, which keeps the inflation backdrop relevant for European rates and broader macro pricing.
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