April 2026 Investylitics
Horizon Advisor Network Investment Committee April 6, 2026
Executive Summary
- The markets, the economy, and investor sentiment all continue to vacillate daily based on movements in oil prices and perceptions of how long the conflict in the Middle East will last.
- We expect volatility to continue throughout the year, given the geopolitical backdrop and the upcoming midterm elections, which have historically led to uncertainty through the first nine months of the year, until the markets have more clarity about the outcomes.
- With the current backdrop, the Federal Reserve Bank held interest rates steady. Chairman Powell described the committee’s forecasts as a "bit of a shot in the dark," acknowledging limited conviction in the outlook due to unpredictable factors.
- While our committee members expect inflation pressures to pick up in the near term due to rising oil prices, other economic data around manufacturing and job creation have portrayed continued economic resiliency. We also have the first quarter earnings season kicking off next week. We expect another round of good reports, and forward guidance will be closely watched for any clues about future growth.
- During times of economic uncertainty, such as we are experiencing right now, the committee believes it is best to fall back on fundamental investment principles such as disciplined diversification and regular rebalancing, rather than letting headlines or emotions drive your investment strategy.*
The members of the Horizon Advisor Network Investylitics Committee met on the afternoon of Monday, April 6th. Given the ongoing geopolitical and economic headlines, we were happy to review and discuss the research and outlooks from the market strategists and economists the committee follows. The markets, the economy, and investor sentiment continue to vacillate daily in response to movements in oil prices and perceptions of how long the conflict in the Middle East will last.
Our committee meeting came as we approached President Trump's April 7th deadline for Iran to make a deal with the United States and reopen the Strait of Hormuz, it appears we may face bifurcated market reactions, depending on which of the following outcomes comes to pass:
If Pakistan can help negotiate a temporary ceasefire that eventually leads to peace and the free flow of oil through the Strait of Hormuz, markets could surprise to the upside. This would likely be led by falling oil prices, and the markets refocusing on the prior growth and earnings trajectory of the US economy. It would also ease inflationary pressures and potentially give the Federal Reserve Bank room to lower interest rates in the second half of the year.
On the other hand, if no deal is made and military actions pick up to put further pressure on Iran’s leadership, especially the IRGC, oil prices could continue to rise. This could add to near-term inflation pressures, likely keeping the Federal Reserve on the sidelines for the foreseeable future. It could also put downward pressure on economic growth and corporate earnings. This could lead to more downside volatility in global stock markets.
Regardless of which scenario comes to pass, the committee expects volatility to continue throughout the year, given the geopolitical backdrop and the upcoming midterm elections, which have historically led to uncertainty through the first three quarters of the year until markets have more clarity on potential outcomes, as shown in our first chart below.
With the current backdrop, the Federal Reserve Bank held interest rates steady. Chairman Powell described the committee’s forecasts as a "bit of a shot in the dark," acknowledging limited conviction in the outlook due to unpredictable factors. During his press conference on March 18, 2026, Powell expressed that the Fed’s Summary of Economic Projections (SEP) was subject to extremely high levels of uncertainty and advised that the forecasts should be taken with a "grain of salt". He jokingly stated that if the Fed were ever going to skip publishing a SEP, "this would be a good one, because we just don't know” what will happen.
Despite these uncertainties, Powell noted that the projections still reflected an economy expanding at a solid pace, forcing the Fed to balance both sides of its dual mandate, where the labor market remained relatively strong, but inflation was not coming down as quickly as hoped.
While our committee members expect inflation pressures to pick up in the near term due to rising oil prices, other economic data around manufacturing and job creation have portrayed continued economic resiliency. As shown below, the most recent ISM Manufacturing PMI rose to a 43-month high of 52.7 in March, extending its expansionary streak to 3 months.
