The U.S. blockade of the Strait of Hormuz triggered a familiar market response initially — higher crude prices and a rise in bond yields. However, this time, the reaction has been relatively muted outside of oil, as quoted on CNBC. Benchmark U.S. treasury bond yields rose from 4.29% on April 9 to 4.31% on April 10, while the same fell to 4.30% on April 13.
Brent crude-based fund United States Brent Oil Fund LP BNO gained 3.9% on April 13 while the equities ETF State Street SPDR S&P 500 ETF Trust SPY added about 1% on the day. This suggests that equity investors have largely priced in geopolitical risks and are becoming less sensitive to such developments.
Investor Sentiment: Peak Uncertainty?
Market participants appear to view recent developments as part of broader negotiation tactics rather than a lasting escalation, as mentioned in the same CNBC article. This shift in perception has reduced the intensity of market reactions compared to the earlier phases of the conflict.
Despite near-term volatility, many analysts expect oil prices to eventually decline as geopolitical tensions ease. A possible resolution between the United States and Iran could quickly relax the current risk premium in energy markets, as quoted in the same CNBC article.
Equities Poised for Recovery
The current scenario indicates that equities are likely to rebound if the situation does not worsen materially. Overall, markets are entering a mixed phase – where geopolitical concerns linger but no longer trigger extreme reactions, as mentioned in the above-mentioned CNBC article.
Low P/E High-Momentum ETFs in Focus
We have seen that several ETFs have added smart gains over the past week (as of April 13, 2026), thanks to cues of easing geopolitical shocks. But then risks are still around. Hence, it is wise to bet on low price-earnings (P/E) ETFs as these are undervalued at the current level.
Below, we mention some ETFs with low P/E ratios of less than 20X. These ETFs gained at least 5% over the past week (as of April 13, 2026). In comparison, the S&P 500 traded at a P/E of 25.45X on April 10, 2026, per WSJ. State Street SPDR S&P 500 ETF Trust (SPY) has added about 4.4% over the past week.
iShares U.S. Digital Infrastructure and Real Estate ETF IDGT
The underlying S&P Data Centre, Tower REIT and Communications Equipment Index comprises U.S.-listed companies engaged in the owning, operating, developing, or providing of infrastructure for the storage, processing, transmission and access of digital data and services.
P/E Ratio: 16.21X
One-week price performance: Up 7.8%
Expense Ratio: 0.39%
Zacks Rank: #1 (Strong Buy)
iShares Russell 2000 ETF IWM
The underlying Russell 2000 Index measures the performance of the small capitalization sector of the U.S. equity market (read: A Few Reasons Why Small-Cap ETFs Are Good Bets Now).
P/E Ratio: 17.94X
One-week price performance: Up 5.0%
Expense Ratio: 0.19%
Zacks Rank: #2 (Buy)
Invesco KBW Bank ETF KBWB
The underlying KBW Nasdaq Bank index is a modified market capitalization-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly traded in the United States.
P/E Ratio: 13.40X
One-week price performance: Up 5.8%
Expense Ratio: 0.35%
Zacks Rank: #2
First Trust Rising Dividend Achievers ETF RDVY
The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.
P/E Ratio: 19.20X
One-week price performance: Up 5.1%
Expense Ratio: 0.47%
Zacks Rank: #2
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State Street SPDR S&P 500 ETF Trust (SPY): ETF Research Reports
iShares Russell 2000 ETF (IWM): ETF Research Reports
United States Brent Oil ETF (BNO): ETF Research Reports
Invesco KBW Bank ETF (KBWB): ETF Research Reports
First Trust Rising Dividend Achievers ETF (RDVY): ETF Research Reports
iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).