Weekly Market Watch

Tenuous Truce

Following the April 7 announcement of a two-week ceasefire in the Middle East conflict, global equities rallied for a second consecutive week, led by emerging markets. The S&P 500^® also climbed back above its 200-day moving average on investor optimism. The day after the announcement, West Texas Intermediate crude oil experienced its largest one-day percentage decline since April 2020; however, daily price movements remain volatile and reflect continued uncertainty. The 10-year U.S. Treasury yield continues to find support at 4.25%, as the headline Consumer Price Index (CPI) report came in slightly below consensus expectations despite the March jump in oil prices.

Market Outlook

Although we expect continued sensitivity to geopolitical headlines, current conditions provide investors the opportunity to refocus on fundamentals. Higher energy costs are impacting U.S. consumers, as evidenced by the CPI report, but fiscal stimulus from tax returns should help to offset those near-term costs, in our view. First-quarter earnings season begins this week, with strong results expected. We believe resilient economic data, paired with solid earnings results, should provide a healthy backdrop for diversified equity exposure.

Chart of the Week

The U.S.-Iran ceasefire agreement triggered an equity market rally last week, and laggards became leaders.

Artificial intelligence-related stocks experienced a rebound, and earnings trends remain favorable.

Last week’s best and worst performers depict a reversal from the past month and underscore the importance of diversified portfolios, in our view.

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