CNBC — 2026-04-16#
Lead Story#
Despite the ongoing U.S.-Iran conflict and a massive oil supply blockade in the Strait of Hormuz, the stock market continues to hit fresh all-time highs. Investors are shrugging off the geopolitical risks, betting heavily on the “TACO trade”—a belief that President Donald Trump will quickly pivot and negotiate a diplomatic resolution before economic pain deepens.
Markets & Economics#
The S&P 500 and Nasdaq Composite both erased their war-induced losses to close at record highs this week, bolstered by the announcement of a 10-day ceasefire between Israel and Lebanon. However, not everyone shares Wall Street’s optimism; New York Fed President Williams worries war will slow growth, aggravate inflation, warning that the resulting supply shocks are already creating stagflationary pressures. The global energy crunch is particularly acute in Europe, where the International Energy Agency warned the continent could run out of jet fuel within six weeks. The conflict is also reigniting the de-dollarization debate, with Deutsche Bank strategists warning that the petrodollar’s dominance could face a structural decline, though Franklin Templeton quickly pushed back on the premise. Despite a surprisingly strong 0.5% GDP print for the U.K. in February, economists warn the momentum will likely be short-lived as global energy price shocks take their toll.