S&P 500 Ends Five-Week Losing Streak as US Stocks Rally on Easing Mideast Tensions; Treasuries Under Pressure at 4.43%

US equities surged Monday with the S&P 500 up 1.02% and Nasdaq gaining 1.23%, snapping a rare five-week decline amid hopes for de-escalation in the Middle East. Investors eye resilient labor data and oil at $112/barrel for inflation risks impacting Fed policy and Treasury yields.

US stocks rebounded sharply on Monday, with the S&P 500 climbing 1.02% to halt a five-week losing streak not seen since 2022, driven by optimism over potential de-escalation in the Mideast conflict. This rally offers U.S. investors a much-needed breather after the index's worst monthly performance in a year, though rising Treasury yields to 4.43% and Brent crude at $112 per barrel signal persistent inflationary headwinds that could delay Federal Reserve rate cuts.

As of: April 13, 2026, 10:37 PM ET

Monday's Market Surge: Key Index Gains and Sector Leaders

The Dow Jones Industrial Average rose 0.63% during Monday's regular trading session, while the Nasdaq Composite outperformed with a 1.23% advance. Nine of the 11 S&P 500 sectors posted gains, reflecting broad-based buying after Friday's session where the Dow closed down 0.56% at 47,917 points, pressured by declines in Verizon (-3.62%), Salesforce (-3.43%), and Nike (-3.14%). Offsetting those losses were gains in Nvidia (+2.58%), Amazon (+2.05%), and Caterpillar (+0.43%). The S&P 500 had dipped to 6,817 points on April 10, down 0.11%, underscoring the volatility U.S. investors have navigated recently.

This rebound positions major indices near five-week highs, loosely holding gains amid reduced geopolitical tensions. For retail and professional investors, this shift reduces near-term downside risks in equity portfolios, particularly in tech-heavy Nasdaq exposure, while highlighting resilience in mega-cap names like Nvidia and Amazon that have anchored performance amid broader market jitters.

Geopolitical De-escalation Fuels Risk-On Sentiment

Hopes for de-escalation in the Middle East conflict provided the primary catalyst for Monday's upswing, easing fears of broader supply disruptions that had propelled Brent crude to $112 per barrel. Energy prices have climbed amid the tensions, compounding inflationary pressures already evident in U.S. markets. BlackRock Investment Institute notes that if oil prices do not decline soon, the narrative around central bank policy could pivot from anticipated rate cuts to whether policy rates can keep pace with accelerating inflation.

For U.S. investors, this dynamic directly influences sector rotation. Energy stocks may benefit from sustained high oil prices, but consumer discretionary names like Nike face headwinds from elevated input costs. The Mideast situation's improvement supports risk assets, potentially stabilizing 401(k) balances and tactical allocations into S&P 500 ETFs tracking the index's broad exposure.

Treasury Yields Spike Amid Term Premium Pressures

U.S. 10-year Treasury yields rose to 4.43%, reflecting jitters in rates markets as investors demand higher compensation for long-term debt risks via elevated term premia. BlackRock maintains an underweight stance on long U.S. Treasuries, citing this upward pressure exacerbated by the energy price shock and pre-existing inflation. The Treasury Department's daily par yield curve rates underscore this environment, with short-term rates like the 1-month at 3.69%.

This yield environment challenges fixed-income investors holding duration-sensitive portfolios. Professional investors may pivot to agency MBS, which BlackRock highlights for higher income relative to Treasuries with comparable risk, offering diversification amid fiscal and inflationary strains. U.S. investors reliant on Treasury income face reduced reinvestment opportunities, prompting reviews of bond ladders and TIPS allocations as inflation-linked bonds remain neutral in BlackRock's tactical view due to growth drags from supply shocks.

Labor Market Data in Focus for Fed Path

Upcoming labor market data across the U.S., euro area, and Japan will be pivotal, with BlackRock expecting unemployment to hold stable despite softening signals. In the U.S., focus centers on whether March's weaker payrolls indicate broader cooling or sector-specific factors. Resilient labor supports consumer spending, a key driver for S&P 500 earnings, but persistent strength could cement higher-for-longer Fed rates.

U.S. investors should monitor these releases closely, as they shape expectations for Fed funds futures and influence equity valuations. A soft landing scenario bolsters cyclicals within the Dow, while any cracks could accelerate rotation into defensives, impacting balanced funds and target-date strategies.

BlackRock's Tactical Asset Allocation Shifts

BlackRock's latest weekly commentary details nuanced positioning. They are overweight short-term European government bonds for cash buffers amid ECB rate hike repricing, neutral on global inflation-linked bonds, and prefer short-term IG credit over long-term due to rate risks. European high yield earns an overweight amid low spreads and potential 2026 growth, while U.S. long-term IG credit is underweight.

For U.S. investors, this suggests opportunities in European credit via ETFs, relatively attractive versus U.S. spreads pressured by AI-driven re-leveraging. Agency MBS and short-term IG provide income with lower volatility, aligning with portfolios seeking yield amid equity rebounds and Treasury volatility.

Broader Macro Context: Current Account and Dollar Dynamics

Amid market moves, debates persist on U.S. current account deficits, with Peterson Institute analysis rejecting claims that the dollar's reserve status is the primary driver. Instead, fiscal policy and China's growth model are cited as key factors, with stablecoins under the 2025 GENIUS Act potentially adding marginal external borrowing pressure. Treasury Secretary Scott Bessent emphasized stablecoins' role in bolstering dollar primacy and Treasury demand.

This context matters for U.S. investors in currency-hedged funds and global allocations, as dollar strength from reserve demand supports multinationals in the S&P 500 but widens deficits financed by foreign inflows. Stablecoin growth could ease Treasury borrowing costs, indirectly benefiting fiscal-sensitive assets like equities.

Implications for U.S. Investor Portfolios

The S&P 500's rally amid geopolitical relief underscores the index's role as a core holding for U.S. investors, with broad sector participation mitigating single-stock risks seen Friday. However, oil at $112 and yields at 4.43% elevate stagflation risks, prompting diversification into European high yield or MBS. Labor data will clarify Fed timing, influencing dividend aristocrats and growth tech alike.

Retail investors via Vanguard or BlackRock ETFs can capitalize on the rebound, while professionals assess tactical overlays for inflation protection. The five-week loss streak's end signals momentum, but volatility persists, favoring barbell strategies blending short-term credit and selective equities.

Risks and Catalysts Ahead

Near-term risks include renewed Mideast escalation pushing oil higher, forcing central banks to reassess rate paths. BlackRock warns inflation expectations align with market pricing medium-term, but supply shocks could alter trajectories. Positive catalysts: resilient U.S. labor bolstering earnings and consumer sectors.

For U.S. markets, Fed sensitivity remains paramount. Higher yields pressure homebuilders and utilities in the S&P 500, while tech benefits from AI capex. Investors should watch Treasury auctions and payrolls for directional cues, adjusting beta exposure accordingly.

Sector Rotation Opportunities

Monday's gains highlighted tech leadership with Nasdaq's 1.23% rise, Nvidia's strength countering Verizon's Friday drop. Energy and financials likely supported Dow gains amid oil prices and yield curves. Consumer staples offer defense if inflation bites.

U.S. investors can rotate via sector ETFs, overweighting technology and underweighting telecom post-Verizon weakness. This aligns with BlackRock's European credit preference over U.S. amid re-leveraging risks.

Global Spillovers and U.S. Relevance

Euro area bonds benefit from ECB dynamics, but U.S. investors prioritize domestic yields and equities. China's policy shifts could ease global imbalances, supporting commodity importers in the S&P 500. Dollar stablecoins enhance USD primacy, potentially lowering long-term yields.

Wall Street's focus remains Fed-centric, with Treasury data providing daily yield insights. The rally reinforces U.S. equities' appeal versus international peers amid dollar strength.

Further reading

• BlackRock Investment Institute Weekly Commentary
• Trading Economics US Stock Market Data
• PIIE on US Current Account Deficit
• US Treasury Data Center

Disclaimer: Not investment advice. Financial instruments and markets are volatile.