PRE-MARKET BRIEFING

Monday, April 13, 2026

Overnight Markets

Global markets traded mixed overnight as investors weighed geopolitical developments in the Middle East against slowing economic growth concerns. The most significant story is unfolding in energy markets, where Brent crude oil surged 7.42% to $102.26 per barrel amid ongoing tensions affecting the Strait of Hormuz shipping route. This sharp move in oil prices is reverberating across global markets, with energy-sensitive sectors and currencies showing heightened volatility.

The elevated VIX at 21.22 signals continued investor anxiety, while the US Dollar Index strengthened 0.34% to 98.99, reflecting safe-haven demand amid geopolitical uncertainty.

Asia Pacific

Asian markets closed predominantly lower, with Hong Kong leading declines. The Hang Seng fell 0.90% to 25,661, weighed down by concerns over supply chain disruptions from Middle East tensions. Japan's Nikkei 225 dropped 0.74% to 56,503, as energy import costs weighed on sentiment given the country's heavy reliance on foreign oil supplies.

China provided the session's bright spot, with the Shanghai Composite gaining 0.56% to 3,989, supported by expectations that higher oil prices could benefit the country's strategic petroleum reserves and state-owned energy companies. Chinese markets also showed resilience amid reports of the country's evolving role in global economic dynamics.

European Markets

European indices opened lower and remained under pressure throughout the session. Germany's DAX suffered the steepest decline, falling 1.17% to 23,525, as the export-heavy economy faces headwinds from higher energy costs. France's CAC 40 dropped 0.93% to 8,183, while the UK's FTSE 100 declined 0.44% to 10,554.

Energy stocks within European indices showed mixed performance, with some oil majors gaining on higher crude prices while utility companies faced pressure from increased input costs. The euro weakened against the dollar as investors priced in potential economic impacts from sustained higher energy prices.

US Futures

US equity futures point to a mixed open, reflecting the complex interplay between geopolitical risks and sector-specific impacts:

• S&P 500 futures suggest a slightly negative start, currently sitting 2.6% below its 52-week high of 7,002
• NASDAQ futures show modest strength, with the index 4.7% below its 52-week peak of 24,020
• Dow Jones futures indicate weakness, with the blue-chip index 5.1% below its 52-week high of 50,513

The divergence in futures performance reflects different sector exposures, with technology showing resilience while traditional industrial and financial sectors face headwinds.

Geopolitical Risks

The Middle East situation continues to dominate market sentiment, with the Strait of Hormuz shipping route remaining restricted despite fragile ceasefire developments. This critical waterway handles approximately 20% of global oil transit, and any prolonged disruption poses significant risks to global energy supplies.

Oil markets are pricing in a substantial risk premium, with Brent crude's surge to $102.26 representing a 14.4% discount to its 52-week high of $119 but still reflecting serious supply concerns. US oil exports are reportedly targeting record levels of 5.2 million barrels per day as the country positions itself to fill potential supply gaps.

The situation has created a complex dynamic where ceasefire developments initially pressured oil prices, but ongoing shipping restrictions continue to support elevated levels. Markets are closely watching for any escalation or de-escalation signals that could dramatically shift energy prices.

What to Watch Today

Key Market Levels: With the S&P 500 at 6,816.89, watch for support around 6,800 and resistance near 6,850. The NASDAQ's relative outperformance at 22,902.90 suggests continued tech strength, while the Dow's underperformance at 47,916.57 reflects industrial sector pressures.

Sector Focus: Materials led Friday's gainers at +0.56%, likely benefiting from higher commodity prices. Healthcare's 1.35% decline warrants attention, particularly given its defensive characteristics during geopolitical stress. Energy sector performance will be critical given oil's surge.

Economic Backdrop: With the Federal Funds Rate steady at 3.64% and unemployment at 4.30% (down from 4.40%), the Fed appears to be in a holding pattern. However, the sharp deceleration in Q4 2025 GDP growth to 0.50% annualized (from Q3's 4.40% annualized rate) suggests economic momentum is waning.

Crypto Markets: Bitcoin at $70,881 remains 44% below its October 2025 all-time high of $126,080, while Ethereum at $2,182.86 sits 56% below its August 2025 peak of $4,946. The crypto market cap of $2.50T reflects continued consolidation in digital assets.

Bond Markets: The 10-year Treasury yield at 4.34% remains elevated, sitting 13.2% below its 52-week high of 5.00%. Any escalation in geopolitical tensions could drive flight-to-quality flows into Treasuries.

Traders should prepare for potentially volatile trading as markets digest the ongoing geopolitical situation while parsing through mixed economic signals and sector-specific impacts from higher energy costs.