TMI's First Quarter Market Report Card

The Macro Institute's Weekly Economic Primer

Author

The Macro Institute
April 13, 2026

In partnership with

(If you’re enjoying the videos, we would really appreciate it if you could take a second to watch it and “Like” it on YouTube. It helps our content reach more and more people! Thank you!)

Don’t have time to watch the whole video? Here’s 5 Key Takeaways:

🔹 U.S.-Iran War Turned Market Upside Down: January and early February painted an encouraging picture. Markets were rotating out of mega-cap tech leadership and into value, cyclicals, and small caps. However, the Iran conflict became the dominant market driver in March. The drawdown was notable for its breadth. Large-cap growth declined alongside value as surging energy prices and Treasury yields outweighed style considerations.

🔹 Energy Sector Led While Growth Stalled: The sector landscape in Q1 was dominated by one overwhelming force: the energy shock. Energy was the clear Q1 leader as the surge in oil translated into outsized gains for energy equities as producers benefited from the supply disruption. Growth sectors bore the worst damage. The selloff reflected the sensitivity of growth stocks in a rising-rate environment where the Fed’s rate-cut path had narrowed materially.

🔹 Rates Jumped Higher On Inflation Expectations: The rate picture in Q1 was shaped by competing forces: a Fed on hold, rising inflation expectations from the oil shock, and flight-to-quality flows during the March selloff. The mortgage market felt the strain. The 30-year fixed rate climbed 23 basis points to 6.48%, reversing hopes for a sustained decline in borrowing costs.

🔹 Oil Soared On Strait Of Hormuz Closure: Oil surged 76.6% in the quarter, driven by the Iran war’s disruption to global oil supply. The closure of the Strait of Hormuz removed roughly 20% of global oil supply, creating what the International Energy Agency called the “greatest global energy security challenge in history.”

🔹 There Were Plenty Macro Events In Q1: Between The U.S.-Iran War, the Supreme Court striking down IEEPA Tariffs, the Fed pausing rate cuts, and the continuation of the AI infrastructure boom, the first quarter of 2026 was challenging for investors. Check out the Macro Specialist Designation to learn how to find clarity.

Miss our last few videos? No worries. Here are some of the most popular 👇

Unlock The Skill Of Macro Investing

How should you react to oil prices spiking? What are the investment implications of reduced immigration? What about a more restrictive trade policy?

The world is moving fast. 

Francois Trahan’s macro investment framework can help slow things down.

We condensed the same framework he has used over his 30+ year career working on Wall Street into an online Macro Investing Bootcamp.

Learn how to find signal in the noise and simplify today’s complicated economic backdrop.

Macro Data Center

Find out why 200K+ engineers read The Code twice a week

Staying behind on tech trends can be a career killer.

But let’s face it, no one has hours to spare every week trying to stay updated.

That’s why over 200,000 engineers at companies like Google, Meta, and Apple read The Code twice a week.

Here’s why it works:

  • No fluff, just signal – Learn the most important tech news delivered in just two short emails.

  • Supercharge your skills – Get access to top research papers and resources that give you an edge in the industry.

  • See the future first – Discover what’s next before it hits the mainstream, so you can lead, not follow.

The Macro Week Ahead

📆 Last Week’s Data Key Takeaways

🔹 CPI Surged While Pre-War PCE Data Held Steady: March CPI jumped +0.9% M/M, pushing the Y/Y rate to 3.3% (vs 2.4% in February). Gasoline was the primary driver as the Iran oil shock hit the data hard. February PCE (pre-war data) came in at +2.8% Y/Y, unchanged from January. The NY Fed's March survey showed 1-year inflation expectations jumping to 3.4% from 3.0%.

🔹 Q4 QDP Was Revised Down To Just +0.5%: The third estimate of Q4 2025 GDP was revised down to +0.5% annualized from the second estimate of +0.7%. Investment was revised lower, while the government shutdown subtracted one percentage point. Full-year 2025 GDP settled at +2.1%.

🔹 ISM Services Held, But Employment Collapsed & Prices Spiked: ISM Services fell to 54.0 from 56.1 (vs 54.9 forecast). New orders strengthened to 60.6, but employment plunged to 45.2, well into contraction and the lowest in this cycle. Prices paid surged to 70.7, the highest since October 2022. The divergence between strong demand and collapsing hiring with spiking costs captures the stagflationary crosscurrents.

🔹 Michigan Sentiment For April Plunged: Preliminary April Michigan Sentiment dropped sharply to its lowest level of 2026, weighed down by surging gas prices and financial market volatility. One-year inflation expectations rose to 3.8% from 3.4%. Consumers across income groups, age brackets, and political affiliations reported weaker expectations for personal finances.

🔹 Fed Held Hawkish Amidst Rising Unease Over Inflation: The March meeting minutes reinforced the committee's decision to hold rates steady. Officials acknowledged the economy was still expanding at a solid pace, but flagged rising uncertainty from the Iran conflict and elevated oil prices. Most participants viewed inflation risk as tilted to the upside, with several noting that tariff pass-through and energy costs could delay further disinflation.

Macro Job Board

This role will join a global team of experienced strategists and editors who combine sophisticated macro analysis, speed and news judgment to deliver a 24/7, real-time product. They will construct frameworks to translate the most pertinent themes into actionable insights across asset classes.

This role will focus on execution of orders across a global book of business with an emphasis on Foreign Exchange (FX), Global Rates, or Commodities. This is an execution role, but there is significant opportunity and expectation to add value to client portfolios through collaboration with portfolio managers and analysts.

This role will work closely with the Senior Portfolio Manager to develop systematic macro strategies, focusing on alpha research, including idea generation, statistical analysis, back testing, and implementation. Must independently explore and develop new ideas while collaborating in a team-oriented environment.

What We Read This Weekend