A ceasefire announcement lit up markets mid-week, delivering the largest single-day rally since April 2025. But with diplomacy already showing cracks and earnings season beginning, the question now is whether this relief has legs or whether it is another false dawn.
Global Markets
For the week, Wall Street posted its strongest performance since November. The S&P 500 surged over 3%, the Nasdaq climbed more than 4%, and the Dow advanced roughly 3%, each index recording its best weekly gain in roughly five months. The catalyst was President Trump’s announcement of a two-week ceasefire with Iran on Wednesday, just hours before his threatened deadline to destroy Iranian energy infrastructure.
The relief was immediate and broad-based. Oil plunged sharply, with US crude falling 16% to $94 per barrel, its largest single-day decline since 2020. The 10-year Treasury yield dropped to 4.2% from nearly 4.4%, and the VIX fell 22%, retreating back toward its pre-war level.
With major bank earnings beginning this week, markets remain on edge. The diplomatic window may hold or it may not. That uncertainty alone is enough to keep investors cautious.
Australian Markets and ASX 200
The ASX 200 had closed March at 8,481, its worst monthly performance since 2022, down roughly 7.5% for the month as the energy shock weighed on financials, consumer, and rate-sensitive sectors. The ceasefire announcement dramatically reversed that tone mid-week.
The ASX 200 jumped 2.55% on Wednesday, reclaiming the psychologically significant 8,900 level, with Information Technology leading all sectors. The big loser for the week was Energy, which surrendered its war-driven gains sharply. The ASX 200 Energy Index dropped 7.3% on Wednesday alone as oil prices plunged, with Woodside plummeting 10.4% before partially recovering the following session, while Virgin Australia surged nearly 12% as markets priced in dramatically lower jet fuel costs.
Broader commodity support remains a tailwind for the resource-heavy index. The RBA’s Index of Commodity Prices rose 2.6% in March, with annual growth reaching 12.8%, the strongest pace since early 2023, led by gold, coking coal, and rural commodities.
On the monetary policy front, markets are pricing approximately a 60% probability of another RBA hike in May, with the cash rate already at 4.10% following two consecutive increases this year. The AUD/USD was trading near 69c as the week closed, reflecting lingering caution about the durability of the ceasefire.
A Message From Our Founder
The optimism of last week has faded quickly. JD Vance returned from Islamabad without a deal, and with no agreement in hand, the conditions are in place for the conflict to re-escalate and the Strait of Hormuz to close again. That remains Iran’s most powerful lever in all of this, and there is little reason to think they won’t use it.
What happens in markets this week will be telling. The question isn’t just whether equities sell off again. It’s whether they hold current levels in anticipation of a resolution or break to new lows. That distinction matters for the months ahead. A failure to hold here would suggest the market is finally pricing in a more prolonged disruption rather than trading on ceasefire hope and disappointment as it has been doing for weeks.
For Australia specifically, the arithmetic is straightforward. Every day that oil remains above $100 per barrel is a day that fuel costs, freight costs, and input costs are running well above where they should be, feeding directly into an inflation problem the RBA is already struggling to contain.
We remain comfortable with our defensive, income-focused positioning and see no reason to change course until there is genuine clarity on where this conflict lands.
For ongoing market insights and portfolio commentary, visit the Barker Wealth market updates page.
Disclaimer: This commentary is intended for general information only and does not constitute personal financial advice. You should consider your own objectives, financial situation and needs before making any investment decisions. Barker Financial Pty Ltd ABN 62 675 838 605, trading as Barker Wealth, is a Corporate Authorised Representative (CAR) 1317193 of AFSL Holdings Australia Pty Ltd ABN 75 165 392 889, AFSL 460940.