By Thierry Hasse, Chief Investment Officer
Elevage Partners | April 14, 2026
Last week, financial markets exhaled. A ceasefire between Iran and the United States sent the S&P 500 surging, erasing its year-to-date deficit in days. The VIX (a broad measure of market anxiety) retreated sharply. Investors appeared ready to move on. By Sunday, peace talks in Islamabad had collapsed. By Monday morning, the U.S. Navy had begun a blockade of Iranian ports, oil had crossed back above $100 per barrel, and the brief window of relief had closed. The title we gave this piece last week turned out to be more accurate than we intended.
None of this changes how we’re managing portfolios. It confirms why we’ve been managing them the way we have.
What Just Happened
They were wrong, and they corrected fast. Weekend negotiations in Islamabad broke down on April 12. The U.S. launched a naval blockade of Iranian ports on the morning of April 13, with explicit warnings that Iranian vessels approaching the blockade would be eliminated. Oil crossed $100 per barrel the same day. What looked like resolution was a pause.
What This Confirms
The structural vulnerabilities we described last week have not only persisted; they are now the active story. The U.S. blockade is focused on ships traveling to and from Iranian ports, with U.S. Central Command, the military authority overseeing the region, clarifying that it will not impede freedom of navigation for vessels transiting the Strait of Hormuz to non-Iranian ports. That distinction matters, but it doesn’t resolve the underlying fragility. Concentrated tanker traffic through one of the world’s most critical chokepoints, years of underinvestment in conventional energy infrastructure, and limited spare production capacity among major producers — these were risk factors before the ceasefire and they remain risk factors now. Energy markets have already repriced accordingly.
Those elevated energy costs feed directly into inflation, and the bond market has been saying so for weeks. Long-term Treasury yields continue to embed a higher inflation premium than at the start of the year. The ten-year yield remains above levels consistent with the Fed’s 2% inflation target being achieved on any near-term timeline, reflecting genuine skepticism that this conflict resolves cleanly into disinflation. Real yields, which strip out inflation expectations from the stated rate, have barely moved. Oil back above $100 gives the bond market’s caution additional weight.
This is one of the reasons we’ve maintained emphasis on government-driven industries, including defense and energy, as a core structural position in portfolios we manage. The thesis wasn’t built on a specific geopolitical scenario. It was built on the recognition that certain industries are shaped by forces governments can’t fully control and can’t afford to ignore.
Where We’re Focused
A separate, slower-moving disruption continues to reshape the technology sector in ways the geopolitical noise tends to obscure. Companies at the center of AI infrastructure and development are benefiting from accelerating demand. A different picture is forming beneath them. Software businesses that relied on workflow tools with limited competitive differentiation are losing ground as AI alternatives reduce switching costs and erode pricing power. The divide runs within technology itself, between companies shaping the AI transition and those being reshaped by it.
That divide is most consequential in private markets. Private credit firms that financed highly leveraged software businesses during the 2021-22 peak are now confronting deteriorating credit quality. Flexible loan structures that allowed companies to defer cash interest payments obscured the underlying stress for several quarters. Slowing revenue growth, rising debt costs, and compressed exit valuations are now forcing a reckoning. For clients who hold private credit exposure through other channels, this is worth watching carefully.
What We’re Watching Now
The ceasefire technically remains in place through April 22. Whether it holds alongside an active blockade, and whether a negotiated path forward emerges before that date, are the questions that will define the next several weeks. We are not making portfolio changes based on the day-to-day progression of events. We are watching whether the conflict produces a durable structural shift in energy supply, inflation expectations, or credit conditions that would warrant reassessing how portfolios are positioned.
Our current assessment: the positioning we’ve maintained across portfolios we manage reflects exactly the environment we’re now in. Emphasis on companies that benefit from the ongoing concentration of wealth, on government-driven industries in defense and healthcare, and on the platforms and infrastructure at the center of the AI transition. That isn’t a reactive call made this week. It’s a framework built for conditions like these.
We’ll continue to communicate as the picture develops. If this raises questions about how a well-constructed portfolio is positioned for what comes next, write to us at info@elevagepartners.com.