April 13, 2026
The Economy Takes Multiple Shocks in Stride
Jeffrey Roach, PhD, Chief Economist, LPL Financial
Outside of energy commodities, capital markets posted a downbeat March as cross-asset volatility spiked in response to the outbreak of hostilities in the Mideast, and kicked off April in similar, choppy fashion before posting a swift bounce following last Wednesday’s two-week ceasefire agreement. While a positive breakthrough, it may still be a little too early to sound the ‘all clear’ as the flow of oil through the Strait of Hormuz remains constrained. Don’t forget, behind today’s headlines, the economy is still dealing with negative trade and immigration shocks and a positive artificial intelligence (AI) shock.
As we discussed in the latest Economic Navigator, whether volatility becomes lasting is ultimately an economic question. Persistent market stress tends to follow when risks transmit into the real economy through slower growth, shifting inflation dynamics, weakening labor markets, or tighter financing conditions. If volatility remains contained — without a sustained tightening in financial conditions or a measurable deterioration in economic indicators — the macro impact is usually limited. The focus, therefore, should be on monitoring the transmission mechanism from risk to economic activity, not the catalyst itself.
2025 Market Outlook - LPL Financial
