The Week in Charts (4/8/26)

View the video of this post here.

Weekly chart breakdowns.

Big-picture market themes.

Actionable insights.

Subscribe to our YouTube channel HERE to separate the signal from the noise.

The most important charts and themes in markets and investing…

1) What Happens When Volatility Spikes?

One year ago during the tariff turmoil, the S&P 500 fell 12% over four trading days, the biggest crash since March 2020 during the covid crisis. At the same time, we saw one of the biggest volatility spikes ever, with the $VIX closing above 50.

What has transpired since then?

The S&P 500 has rallied 38%, adding to the list of times where it paid to be greedy when others were fearful.

The closing high for the $VIX this year seems calm by comparison at a level of 31 on March 27.

While not nearly as extreme as last year, this was still in highest 10% of historical $VIX readings.

What has happened in the past following similar levels of volatility?

Above-average forward returns for the S&P 500 over the next 1-5 years.

Does that mean the S&P 500 will definitely be higher a year from now? No, there are no guarantees in markets, only probabilities. But the higher the volatility index spikes, the higher the odds of a strong positive return going forward.

2) The Longest Correction Since 2022

At its low on March 30, the S&P 500 was down 9.8% from its January peak. This is the biggest correction since the tariff turmoil last April and the longest (61 days) since the 2022 bear market.

The 7.3% decline in the first 60 trading days of this year was one of the worst starts to a year in history.

3) A Repeat of 2025?

But as we saw in 2025, a bad start to a year doesn’t necessarily mean a bad finish.

The S&P 500 has already rallied more than 7% from its March 30 low and is now down less than 1% on the year. At the same point in 2025, the S&P 500 was down 15% before staging its epic comeback to end the year up 18%.

What’s driving the market higher?

Hopes of a resolution to the Iran war, with a 14-day ceasefire now in place. The 2.5% surge in today’s trading marked the 5th biggest gain during President Trump’s second term.

What did the top 8 days all have in common?

They were all so-called “TACO” trade rallies, with sharp reversals from the President on Tariffs driving the biggest gains in 2025 and reversals on the Iran War driving gains in 2026.

4) The Inflationary Spike Is Already Here

When will the war end and when will the Strait of Hormuz return to normal levels of traffic?

We don’t know the answer to either question which makes forecasting future inflation rates even more difficult than usual.

The positive scenario: the ceasefire endures and the war comes to an end this month with the Strait of Hormuz resuming normal traffic by May.

The negative scenario: the ceasefire is broken and the war escalates, with prices of Crude Oil and other commodities remaining elevated or continuing to spike higher.

Regardless of what happens next, inflation is already on the rise. We get the first read on that this Friday (4/10) with the March CPI report.

What is it expected to show?

An increase of 3.25% according to the Cleveland Fed, up from a 2.4% increase in February.

Gas prices in the US have now risen to $4.16 per gallon, their highest level since August 2022. The 40% increase over the past five weeks is the biggest 5-week spike on record.

Fertilizer prices are up 52% YoY to their highest level since May 2022. This is expected to drive up food prices in the coming weeks/months.

5) No Chance of a Rate Cut in April

The higher levels of inflation are expected to keep the Fed on hold when it meets again on April 29. There’s a 98% chance of the Fed doing nothing (holding rates at 3.50-3.75%) and a 2% chance of a rate hike (to 3.75%-4.00%). The longer inflation stays above 3%, the more pressure the Fed will be under to consider hiking rates again.

And that’s it for this week. Thanks for reading!

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

The post The Week in Charts (4/8/26) appeared first on Charlie Bilello’s Blog.