Hormuz closes, Brent surges past $111, equities and crypto rally anyway

April 2026 belonged to the Strait of Hormuz. The US-Iran conflict, in its second month as April opened, escalated in stages that markets were forced to price in real time: Iranian strikes knocked out water and energy infrastructure in the UAE, Bahrain and Kuwait on April 5; US-Iran peace talks collapsed and President Trump ordered an immediate blockade of the strait on April 12; the conflict reached day 45 on April 13 as the blockade began, even as Trump insisted Tehran wanted a deal; and on April 18 Iran said the strait was closed again as ships in the waterway came under attack. Brent finished the month at $111.64, up 14.93%, while WTI closed at $105.79, a gain of 3.68%, a divergence that left the international benchmark carrying most of the supply-risk premium.

The striking feature of the month was what risk assets did in the face of that shock. The S&P 500 closed April at 7,186.60, up 10.54%, settling an argument the desk had opened on April 3 when it wrote that oil at $111 and equities at 6,558 could not both be right. Bitcoin, which desk coverage on April 6 had dismissed as trading a ceasefire bounce near $69K, ended the month at $76,324, up 11.74%, with Ethereum gaining 7.08% to $2,257. Gold was the outlier, slipping 1.74% to $4,644.60 despite the escalation, while the 10-year Treasury yield rose 10bps to finish at 4.40%.

The domestic data offered the Fed no clean exit from what coverage all month called a stagflation trap. April opened with the unemployment rate at 4.3% and the headline CPI index printing 332.407, and the desk characterized the payrolls report as a beat that deepened rather than broke the stagflation story. Weekly jobless claims stayed contained throughout, printing 218,000 on April 4, 208,000 on April 11, 215,000 on April 18 and 190,000 on April 25, the lowest reading of the month arriving in its final week. Nothing in the labor data forced the Fed's hand, and nothing in the inflation backdrop, with crude adding a fresh supply shock, gave it room.

The month closed with one more structural jolt: on April 29 the UAE announced it was quitting OPEC, an exit that landed weeks after Iranian strikes on Emirati infrastructure and left the cartel's cohesion in question just as the Hormuz closure was constraining physical flows. April thus ended with the same puzzle it opened with, only larger: crude in triple digits, yields grinding higher, gold soft, and equities and crypto sharply higher on the month, a configuration the desk spent four weeks arguing could not hold indefinitely.