Upside Engine Is Weakening, but Don’t Fight the Rally Yet

What to Watch Before the US Stock Market Opens on April 16, 2026

1) Trump Says Deal Before End-April Is Highly Likely

Investor expectations for easing tensions in the Iran war held steady on April 16. President Donald Trump said the chances were very high that an agreement would be reached before King Charles III visits the US on April 27. Defense Secretary Pete Hegseth said the US could keep the blockade in place and restart military operations if Iran fails to make a wise choice. At the same time, he said Iran’s command-and-control capabilities had been destroyed, giving it a strong incentive to maintain the ceasefire.

2) Labor Market Cools as Price Pressures Build

US initial jobless claims fell from a week earlier, while continuing claims increased. The data added to signs that the labor market is losing momentum in a period of low layoffs and low hiring. Meanwhile, the Philadelphia Fed’s manufacturing index for April rose far more than expected, suggesting economic activity remained resilient despite the fallout from the Iran war. The employment index, however, turned negative and the prices index rose again from the previous month. The figures complicate the Fed’s policy outlook.

3) ‘Upside Momentum Is Fading, but Don’t Fight the Rally Yet’

With the S&P 500 and Nasdaq both closing at fresh records, Goldman Sachs’ trading desk said the prevailing market view is that upside is limited. It set a near-term ceiling of 7,100 for the S&P 500 and advised investors to stay with the rally while managing risk. Nomura strategist Charlie McElligott also said investors should not rush to bet against the stock-market advance. He pointed to a potential energy supply shortfall and higher bond yields as risks that could eventually halt further gains.

4) ‘Strong Conviction in the AI Semiconductor Megatrend’

Strength in AI hardware continues. TSMC issued second-quarter guidance that topped market expectations and effectively raised its outlook for capital spending this year. The company said it has strong conviction in the AI megatrend and plans to sharply increase capital expenditures over the next three years. Tesla Chief Executive Officer Elon Musk is also accelerating the Terafab project, a massive factory designed for large-scale production of the company’s own AI chips. JPMorgan said AI infrastructure spending remains the main growth driver for technology stocks, while noting that valuations for some optical companies have become excessive.

5) On a Wartime Footing, US Moves to Bolster Defense, Critical Minerals and Nuclear Power

The Wall Street Journal reported that the Pentagon is considering bringing civilian automakers including General Motors and Ford into weapons production to replenish stockpiles depleted by the war. The move suggests a broader push to run much of the manufacturing sector on what amounts to a wartime footing. The US also plans to strengthen supply chains for critical minerals needed for military production. The White House formally announced a space nuclear power initiative aimed at countering the space ambitions of China and Russia and securing a technological edge.

Bin Nan-sae, New York correspondent, Hankyung.com binthere@hankyung.com