Will there be a confrontation at the Fed?

What to look out for today

Companies reporting on Friday, 17 April: Fifth Third Bancorp, State Street, Truist Financial

Key data to move markets today

UK: A speech by BoE Deputy Governor for Financial Stability Sarah Breeden

US: Speeches by San Francisco Fed President Mary Daly and Fed Governor Christopher Waller

GLOBAL: IMF and World Bank Spring Meeting

Global Macro Updates

Initial jobless claims fall, easing pressure on Fed as President threatens Fed chair. Jobless claims fell last week, suggesting labour market conditions remained stable. Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 207,000 for the week ended 11 April, according to Labor Department data released on Thursday. This marked the biggest one-week drop since February. Claims remained in the 201,000-230,000 range for this year. The number of people continuing to receive unemployment benefits, a proxy for hiring, increased 31,000 to a seasonally adjusted 1.818 million during the week ended 4 April. While layoffs remain low, the US-Israel-led war with Iran could be limiting hiring as businesses remain cautious about the economy. However, the Federal Reserve’s Beige Book survey of regional business contacts also showed most districts recently described labour demand as “stable” with minimal layoffs. The continuing labour market stability may provide the Federal Reserve with enough room to hold interest rates for some time while policymakers monitor the inflation fallout from the US-Israel-led war with Iran and the consequent surge in energy prices. The prospect of higher for longer rates will likely upset President Trump, who has repeatedly called for interest rates to be cut.

On Wednesday President Trump once again threatened to fire US Federal Reserve chair Jay Powell if he doesn’t step down as chair when his term ends on 15 May. However, there is no guarantee that the Senate confirmation hearing for Fed chief nominee Kevin Warsh, set for 21 April, will see Warsh approved as a key Republican senator, Thom Tillis of North Carolina, has vowed to block Warsh confirmation until the probe against Powell is dropped, something President Trump is refusing to do. Powell has said he will continue to serve as the "pro tem" chair of the Fed's seven-member Board of Governors if Warsh is not confirmed by 15 May because "that is what the law calls for" and that is what the central bank has done previously. 

Former Fed chair Janet Yellen warned on Wednesday that she has “never seen a threat of this level to the Fed before.” At a conference in Hong Kong she said, “How often does the president of a developed country express the view that the interest rate should be set to reduce the debt service cost? This is what you hear in a banana republic.”

US Stock Indices

Dow Jones Industrial Average +0.24%
Nasdaq 100 +0.49%
S&P 500 +0.26%, with 7 of the 11 sectors of the S&P 500 up

The S&P 500 and Nasdaq Composite climbed to fresh record highs after President Trump said Israel and Lebanon reached a 10-day cease-fire agreement set to begin at 5 pm ET on Thursday and that the US might hold discussions with Iran in Pakistan this weekend.

The S&P 500 was +0.26% or 18.33 points to 7,041.28, the Dow Jones Industrial Average was +0.24% or 115 points to 48,578.72 and the Nasdaq Composite Index rose +0.36% or 86.69 points to 24,102.70.

In corporate news, Taiwan Semiconductor Manufacturing Co. saw a 58% surge in profit in Q1 and hit a fresh record as demand for artificial intelligence chips stayed strong. President and CEO of TSMC, C.C. Wei, said in an earnings call Thursday that “AI-related demand continues to be extremely robust and advances in AI are driving increased computation and, thus, demand.”

UK budget airline EasyJet’s shares fell the most since 2022 after it warned of a loss in the first half of this fiscal year because of disruptions from the Iran war.

Netflix co-founder and chair, Reed Hastings, announced he will step down from the company he co-founded in 1997. The stock fell in after-hours trading after Netflix announced Hastings’ plans to leave the board in June and a weaker than expected financial forecast.

S&P 500 Best performing sector

Energy +1.55%, with APA +3.55%, EQT +2.87% and Valero Energy +2.87%

S&P 500 Worst performing sector

Health Care -0.77%, with Abbott Laboratories -6.00%, Revvity -3.63% and IQVIA Holdings -3.45%

Mega Caps

Alphabet -0.33%, Amazon +0.48%, Apple -1.14%, Meta Platforms +0.79%, Microsoft +2.20%, Nvidia -0.26% and Tesla -0.78%

Information Technology

Best performer: ON Semiconductor +10.35%
Worst performer: Leidos Holdings -1.62%

Materials and Mining

Best performer: Albemarle +16.31%
Worst performer: Vulcan Materials -1.88%

Corporate Earnings Reports

Posted on Thursday, 16 April

Netflix +16% quarterly revenue to $12.25 bn vs $12.18 bn estimate

EPS at $1.23 vs $0.76 estimate

Co-CEOs Ted Sarandos and Greg Peters highlighted strong organic growth, a significant boost from a terminated acquisition, and the continued expansion of their advertising business. Peters noted, "Our Q1 results demonstrate our ability to execute on our strategic initiatives despite external challenges," and added that the company is "confident in our growth trajectory and our ability to deliver value to shareholders."— see report.

Pepsico +8.5% quarterly revenue $19.44 bn vs $18.94 bn estimate 

Adjusted EPS at $1.61 vs. $1.55 estimate

Chairman and CEO, Ramon Laguarta said, “We are pleased with our first-quarter results, which featured an acceleration in both net revenue and organic revenue growth – with a notable improvement in convenient foods organic volume. An extensive commercial agenda, which includes the restaging of large global brands, innovation activity and certain affordability initiatives, is being executed well and business performance improved. We are encouraged with the resilience of the International business while North America continued to make progress in the first quarter.” — see report.

European Stock Indices

CAC 40 -0.14%
DAX +0.36%
FTSE 100 +0.29%

Commodities

Gold spot -0.27% to $4,785.40 an ounce
Silver spot -0.96% to $78.71 an ounce
West Texas Intermediate +3.7% to $94.69 a barrel
Brent crude +4.7% to $99.39 a barrel

Gold prices fell on Thursday with Spot gold -0.27% to $4785.40 ounce. US gold futures settled -0.3% lower at $4,808.30.

Spot silver fell -0.96% to $78.71 an ounce. As noted by Reuters, the silver market is heading for a sixth year of structural deficit, with 762 million troy ounces drawn from stocks since 2021, raising the risk of a renewed liquidity squeeze despite weaker demand expectations, the Silver Institute and consultancy Metals Focus said on Wednesday.

Oil prices rose on Thursday as traders remain sceptical about the actual resolution of the US-Israeli-led war with Iran. 

Brent crude futures rose $4.46, or +4.7%, to settle at $99.39 a barrel. US WTI crude futures climbed $3.40, or +3.7%, to settle at $94.69 a barrel.

The US-Israeli -led war with Iran stands as the largest-ever disruption of global oil and gas supplies due to Iran's interruption of traffic through the Strait of Hormuz. It appears that the US and Iran are now seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters on Thursday. A source briefed by Tehran told Reuters that Iran could consider allowing ships to sail freely through the Omani side of the Strait of Hormuz in the event of a deal. 

Note: As of 4 pm EDT 16 April 2026

Currencies

EUR -0.1% to $1.1782
GBP -0.2% to $1.3534
Bitcoin +0.8% to $75,474.38
Ethereum +0.6% to $2,370.89

On Thursday, the dollar climbed against major currencies, retracing some of its recent losses, as investors awaited news about a possible US-Iran peace deal and after data showed initial jobless claims dropped 11,000 to a seasonally adjusted 207,000 for the week ended 11 April.

President Donald Trump said the US-Israeli-led war with Iran was "close to over," while the White House said more in-person talks would likely take place in Pakistan over the weekend. However, Iranian officials said big splits remained. 

The dollar index had its best day in two weeks, ending an eight session loss and rising +0.2% to 98.19 after earlier falling to its lowest level since late February.

In afternoon trading, the euro fell from a seven-week high against the dollar of $1.1823 to end the day down -0.1% at $1.1782.

Sterling hit its lowest point since mid-February but recovered after data from the Office for National Statistics showed UK GDP grew 0.5% in February, after an upwardly revised 0.1% reading the previous month. It was the strongest monthly reading since January 2024 and beat expectations of a 0.2% decline. The British pound ended the day -0.2% to $1.3534. 

The dollar advanced +0.2% to ¥ 159.21 yen. The move followed news that Japan's Finance Minister Satsuki Katayama said Japan and the US agreed to intensify communication on exchange rates after she met with USTreasury Secretary Scott Bessent on Wednesday.

Fixed Income

US 10-year Bond +2.9 basis points to 4.309%
German 10-year Bund -1.5 basis points to 3.026%
UK 10-year gilt +10.2 basis points to 4.815%

US Treasuries fell on Thursday as rising oil prices and the impact from trade tariffs increased inflation fears as price growth remains well above the Fe’s 2% target rate.

The yield on the 10-year Treasury note rose +2.9 bps to 4.309%, while the 30-year yield was +3.9 bps to 4.932%. At the shorter end of the yield curve, the 2-year Treasury yield, closely tied to expectations for the Fed funds rate, +1.3 bps to 3.777%.

According to CME Group's FedWatch Tool, Fed funds futures traders are now pricing in a 0.5% probability of a 25 bps rate hike at the 29 April FOMC meeting, compared to last week’s 2.1% probability.

On Thursday, Eurostat released revised eurozone inflation data for March. Headline inflation was revised to 2.6% from an initial estimate of 2.5%. The gauges for core and services inflation came in at 2.3% and 3.2%, respectively. However, traders were more optimistic about an end to the war with Iran which would help relieve inflationary pressures.

Germany’s 10-year government bond yield fell -0.40 bps to 3.026%, the German two-year bond yield, sensitive to ECB policy rate expectations, was +1.1 bps to 2.525%, while at the longer end, the German 30-year yield edged down -0.1 bps to 3.589%.

Italy’s 10-year BTP yields dropped -1.9 bps to 3.813%. The yield spread between Italian BTPs and German Bunds stood at 78.7 bps.

The French spread of 10-year OATs reached 64 bps, with the French 10-year yield trading +0.2 bps at 3.666%. 

Market participants are currently pricing in two, 25-basis point ECB rate hikes this year, down from three just a few weeks ago. However, they are only pricing a 20% chance of a rate hike at the ECB's meeting this month. 

Note: As of 4 pm EDT 16 April 2026

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