David McNamara: Markets rally amid hopes of end to Middle East war

The overarching theme is one of investors pricing in the end of the conflict

US vice president JD Vance in Pakistan for talks. Markets have seen a relief rally over the past week, as investors price in the end of the current Middle East conflict. Picture: AP Photo/Jacquelyn Martin

Mon, 20 Apr, 2026 - 15:39

David McNamara: British economy is stuck in stagnation

David McNamara is the Group Chief Economist at AIB responsible for leading the bank's macroeconomic analysis and provide insights for both national and international stakeholders.

Markets have seen a relief rally over the past week, as investors price in the end of the current Middle East conflict. Central bankers have also been mollifying their outlook for rates, following the initial burst of hawkish comments when the conflict began.

The ‘risk-on’ mode has been further bolstered by news of a ceasefire between Israel and Lebanon. European equities have gained nearly 2% on the week, with much larger gains on Wall Street, with the S&P 500 up around 4% to 5%. The dollar has also fallen further as the tail risks around the conflict diminish further. Negative developments in the Strait of Hormuz over the weekend has seen these market gains being somewhat undone in early trading this week, but the overarching theme is one of investors pricing in the end of the current conflict.