4/4 Weekly Market Summary - The War Isn't Over, and Rate Cuts Are Far Off

# April 04, 2026 Macroeconomic Weekly Market Report

## This Week's Core Theme: A Catch-Your-Breath Rally Amid "The War Isn't Over, and Rate Cuts Are Far Off"

This week's global market movement can be summed up in one line: "War risks remain, but the Fed isn't in a hurry either."

- U.S. Treasury bond yields, which had surged throughout March, came down slightly this week in a pause. Relief rallies emerged briefly amid the flow of news related to the conflict with Iran. (apnews.com)

- The dollar index (DXY) maintained strong stability just above the 100 level. This signals that market sentiment has solidified around the view that the Fed's rate cuts will be significantly delayed. (reddit.com)

- U.S. stocks showed a modest rebound on a weekly basis after last month's high volatility, but on a 30-day basis, they remain in a correction phase.

- Oil ETF (USO) surged more than 17% in a week and emerged as a key variable, while Bitcoin and Ethereum showed only weak rebounds after their March plunges.

Below, we'll examine what happened by asset class and why it matters.

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## Interest Rates and Bonds: Not an Emergency, But Still Elevated Rate Levels

Key Numbers Summary

- 10-Year Treasury Yield: 4.31%

- 1 Week (7D): –2.49% (slight decline)

- 30 Days: +6.16% (a substantial increase compared to a month ago)

- 90 Days: +2.86% (still elevated compared to three months ago)

- 10-Year Real Yield (TIPS): 1.97%

- 7D: –5.29% (real rate burden eased slightly)

- 30D: +11.30% (surged greatly over a month, then pulled back somewhat this week)

- Yield Curve (10-Year – 2-Year Spread): +0.51%p

- The yield curve here refers to the "difference between 2-year and 10-year Treasury yields," an indicator that typically inverts (long-term < short-term) when the economy weakens.

- 7D: –8.93% (spread narrowed slightly)

### Why Did It Move?

1. War-Related Fear Receded from the "Extreme"

- Early this week, when signals emerged suggesting the conflict with Iran might be "subject to negotiation," markets exhibited the classic "relief rally" pattern: stocks surged and Treasury yields fell. (apnews.com)

- In simple terms, once investors thought "the worst-case scenario might not happen," some money that had fled to the safest assets (Treasuries) rotated back into stocks.

2. The Fed's "One Rate Cut" Signal Solidified, Long-Term Rates in a "High but Stable" Zone

- According to the dot plot released after the March Federal Open Market Committee (FOMC) meeting, Fed officials expect only about one rate cut in 2026. In other words, the bias is toward "keeping rates high for a long time." (reddit.com)

- This is why 10-year yields rose sharply throughout March, and this week only cooled off the excess somewhat. (7D declined, while 30D and 90D remain elevated)

3. Economic Data: The Economy Is Cooling, But Not Sharply

- Recent reports on consumer confidence and the JOLTS job openings and job changes data show signals that employment and consumption are cooling gradually, but not "deteriorating sharply." (babypips.com)

- This data suggests the Fed lacks compelling reasons to rush into rate cuts, but additional hikes would be burdensome as well.

### Why Does This Matter to You?

- Direct impact on mortgage rates, rental payments, and credit card rates

- High Treasury yields mean real-world borrowing rates like mortgages and personal loans are likely to remain elevated too.

- The fact that real yields (adjusted for inflation) are much higher than three months ago means "simply keeping money in the bank provides decent real returns" in this environment.

- From a portfolio perspective,

- Unlike March when Treasury yields were rising sharply, this week the additional sharp decline in bond prices has paused.

- The long-term Treasury ETF (TLT) rising +1.17% over the week reflects this rate stabilization plus partial return to safe-asset preference.

### Last Trading Day (1D) Summary

- In the latter half of the week, 10-year yields declined further and TLT rose +0.59%. It was a day reflecting sentiment that "war risks remain, but things probably won't get worse immediately."

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## Dollar and Forex: The More Rate Cuts Are Delayed, the More the Dollar Slowly Strengthens

Key Numbers

- Dollar Index (DXY): 100.16

- 7D: +0.20% (nearly flat on a weekly basis but still in strong territory)

- 30D: +1.24%, 90D: +1.75% (gradual strengthening over recent months)

The dollar index (DXY) is a comparison of the dollar against a basket of major currencies including the euro, yen, and pound. A rising number means the dollar's relative purchasing power is increasing.

### Why Did It Move?

1. Fed's Shift from "Dovish to Neutral/Hawkish"

- Materials and statements released after the March FOMC, along with Chair Powell's remarks, show increased recognition that "inflation returning to 2% will take longer than previously thought." Inflation forecasts were also revised upward to 2.7% for 2026. (reddit.com)

- Markets interpreted this as "the scenario of aggressively cutting rates within months is no longer on the table," which is supportive for the dollar.

2. The U.S. Remains "Relatively" Safe

- As Iran conflict, oil spikes, and geopolitical tensions intensify, global capital tends to flow toward places that appear relatively less risky, namely U.S. dollar-denominated assets.

- This phenomenon is typically called "safe-haven demand," which simply means that when uncertain, global money flows to the world's largest economy with the deepest financial markets: the United States.

### Why Does This Matter to You?

- Overseas travel, studying abroad, and international shopping don't get significantly cheaper in a strong dollar environment.

- For overseas stock and ETF investors,

- You should monitor both dollar-denominated returns and won-converted returns.

- If dollar strength continues, U.S. ETF prices could move sideways while currency effects provide additional support to won-based returns.

### Last Trading Day (1D) Summary

- On the final day of the week, the dollar index rose +0.25%, reaffirming the perception that "the Fed isn't in a hurry."

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- On the last trading day of the week, BTC +0.44%, ETH +0.43%, showing quiet gains, but still a long way to go in recovering the 3-month cumulative losses.

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## Global Stocks: Less Volatile Than the U.S., But Oil and War Risks Are Shared Variables

Key ETFs (7D Basis)

- Emerging Markets ETF (VWO): 54.21, 7D +2.57%, 30D –1.85%, 90D –1.31%

- Europe ETF (VGK): 83.22, 7D +3.82%, 30D –2.34%, 90D –1.13%

- Japan ETF (EWJ): 85.33, 7D +3.17%, 30D –1.73%, 90D +4.92%

- This week, Europe, Japan, and emerging markets all showed slightly stronger rebounds on a 7D basis than the U.S.

- However, looking at 30D performance, like the U.S., they still face around 2% of correction remaining.

### Why Does This Matter to You?

- Dollar strength plus oil surges can place greater burdens on emerging markets.

- If you have a high allocation to U.S. stocks,

- Incorporating some Europe, Japan, and emerging market ETFs for geographic diversification still appears a valid strategy.

### Last Trading Day (1D) Summary

- On the final trading day, Europe and Japan ETFs declined 0.5–1%, representing a modest correction of this week's rebound gains.

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## Next Week's Key Points: Inflation Data, Oil Prices, and the Hormuz Deadline

Three major events will drive markets next week.

1. Aftereffects of March Employment Data (Non-Farm Payrolls) and Additional Labor Market Data

- Following the release of March employment figures on April 3,

- Whether the labor market is "cooling gradually" or "freezing suddenly" will significantly impact Fed rate policy. (gramercy.com)

2. Inflation Indicators Expected Next Week (Particularly CPI, PPI, and then PCE on April 10)

- Some institutions are already warning that U.S. inflation in 2026 could reach the 4% range, while the Fed officially projects around 2.7%. (fool.com)

- Depending on which side the actual inflation numbers support,

- Treasury yields,

- The dollar,

- Oil prices,

- And growth stocks (especially tech) will all reset their major directions.

3. Political Deadline Related to Iran and the Strait of Hormuz (Around April 6)

- If tangible tension easing is confirmed around this date,

- Oil could pull back sharply from its current overheated levels,

- And inflation concerns could ease to some degree.

- Conversely, if tensions escalate,

- Further oil surges,

- Re-rising Treasury yields,

- And stock market re-decline could follow. (gramercy.com)

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### Closing: This Is a "Slowdown Period"

This week, after March's major shocks, markets caught their breath and recalculated the situation.

- Treasury yields came down slightly but remain elevated.

- The dollar is strong, and oil prices have surged.

- Stocks and cryptocurrencies rebounded, but it's too early to say a major trend has shifted.

As investors, the task is

- Rather than trying to predict the next major move,

- To track how three axes — rates, inflation, and war — interweave,

- And to reduce leverage and excessive short-term bets while checking your portfolio's resilience.

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This content is provided for informational purposes only and does not constitute a recommendation to invest in any specific asset or security.

Source: https://nextinvest.org/ko