US sharemarket – Despite the Middle East war and higher oil prices, the S&P 500 is near a winning streak. The disconnect with everyday Australia is growing—profits, demand, and sentiment all show strain.
April 16, 2026 — 3:30pm
For many people, it feels impossible: a war is ongoing, oil remains elevated, and yet US sharemarkets are pressing toward new highs.
The headline number is the S&P 500, edging up 0.8% overnight and up 10.7% since the start of April.. That momentum matters because it suggests investors aren’t simply reacting to the latest headlines about conflict—they’re actively deciding what those headlines mean for future inflation. corporate profits. and risk.
The puzzle deepens when you remember what higher oil typically does.. Elevated fuel prices ripple through transport, food, manufacturing, and everyday household budgets.. In the past. that mix often translated into pressure on consumer demand and costs. which then forced markets to re-rate earnings expectations.. Yet this time. the US market seems to be looking past the immediate damage and focusing on signals that the political narrative around the conflict could be changing.
Investors are “deciphering” Donald Trump language—according to Misryoum’s reading of how the market is behaving—trying to extract whether the war is likely to intensify or whether US policy will cool.. The logic is blunt but familiar: if investors believe the conflict becomes less likely to worsen. then the inflation shock tied to oil prices should ease.. That, in turn, reduces the market’s fear of tighter financial conditions.
There’s also a second layer to the strength: technology stocks are leading the charge.. When growth and high-beta sectors outperform during a period of macro uncertainty. it usually signals that investors are becoming less risk-averse than the news flow suggests.. In other words. optimism isn’t just present—it’s concentrated in parts of the market that tend to benefit when future economic conditions look less threatening.
Misryoum believes the most important driver behind the disconnect is timing.. Markets move on expectations.. Households and many businesses move on invoices, delivered fuel, maintenance cycles, and contracts.. That difference can create a gap that feels irrational from the “Main Street” perspective—especially when oil is still doing real harm.
Back in Australia, that real-world impact isn’t abstract.. An Asian tour aimed at shoring up fuel supplies comes while a fire at Geelong’s Viva oil refinery facility highlights how vulnerable supply chains can be.. For consumers and businesses. those events turn the idea of “higher oil prices” into something immediate: higher costs. tighter margins. and fewer choices.
The second wave of pain is already showing up in corporate guidance.. Misryoum has seen hints of profit downgrades starting to trickle through. including in aviation and among major players such as Westpac. which flagged risks for industries heavily dependent on diesel and fertiliser.. That isn’t just a sector story—it’s a signal that higher energy costs are working their way into earnings models with a lag.. The market may be waiting for the full picture, but companies can’t delay their accounting.
Over the coming weeks, Misryoum expects more downgrades as the impacts become fully measurable.. Once firms can quantify how higher oil prices translate into demand changes—whether through reduced discretionary spending or altered travel patterns—investors will have more concrete numbers to react to.. In the meantime. the early signs are visible: consumers redirect money toward essentials like fuel and away from discretionary services such as holiday travel and eating out.
The strain also spreads into the broader economy.. Vehicle sales in Australia are now expected to go backwards in 2026. according to Misryoum’s reading of market outlook updates. reflecting how households often postpone big purchases when costs rise.. And when central bank officials talk plainly about the trade-off—higher inflation. low activity. and fewer good outcomes—it reinforces the sense that the “upside” story is limited for households. even if markets remain buoyant.
One reason the contrast with the US matters is psychological: when investors believe bad news is temporary. they can buy ahead of the evidence.. But households can’t “price” away the higher cost of living in the same way.. Even when the Australian sharemarket manages to rebound—recovering much of the war-led decline—the underlying economy can still be adjusting. which often takes longer than price charts.
Misryoum also points out a subtler channel of impact: sentiment and tourism.. War ripples are reaching luxury brands struggling without sales tied to major Middle Eastern shopping destinations. as tourists avoid the region.. That’s a reminder that conflict doesn’t only hit energy—it disrupts movement. consumer confidence. and the global spending patterns businesses rely on.
So what’s likely next?. If oil stays elevated and corporate earnings deteriorate. Australian markets may face a more cautious re-pricing even if the US continues to surge.. The big question is whether the US optimism—anchored in the idea that the conflict could de-escalate—translates into lower inflation expectations fast enough to outpace the earnings lag.. Markets can rally on narrative shifts; economies respond to cost realities.. For Misryoum. the growing divide is the warning—and the opportunity—for investors and everyday Australians to watch not just headlines. but the timing of how those headlines land in profits. wages. and demand.
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