Weekly Market Watch

OPEC Minus

Despite the ongoing Iran conflict, global equities rose broadly last week. In the U.S., the S&P 500® and Nasdaq indices hit record highs in response to strong artificial intelligence (AI)-related earnings reports from technology companies and solid economic data. The Federal Reserve (Fed) left interest rates unchanged despite four committee member dissents — the most since 1992 — although only one of the dissents was to the policy decision itself.

Following news that the United Arab Emirates is leaving the Organization of the Petroleum Exporting Countries (OPEC), West Texas Intermediate crude oil prices crossed above $100 per barrel for the first time in three weeks. Oil prices and bond yields continued to move in tandem — a pattern since the Iran conflict began — reinforcing our view of potential near-term inflation passthrough.

Market Outlook

First-quarter earnings season reports showed continued strength, driven by the Magnificent 7 companies. Hyperscaler reports revealed that the AI infrastructure buildout is accelerating, with major technology companies increasing capital expenditure (capex) guidance for 2026. With the Fed in transition, but firmly on hold, and U.S. consumers absorbing high gasoline prices, we expect business investment to remain a major market driver — supporting our tilt toward equities.

Table of the Week

Following a busy week of earnings, with 63% of S&P 500 constituents having reported, the blended earnings growth rate had a significant improvement of 1,200 basis points from the prior week.

Earnings growth was widespread across all sectors, led by strong results from the Magnificent 7 companies, with technology companies reporting robust cloud demand and elevated capex to support AI and data-center needs.

If the blended growth rate holds for the first quarter, it would mark the highest year-over-year growth in 17 quarters.

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