The indexes posted their best weekly performances since November, as the U.S. and Iran agreed to a two week cease-fire, contingent on the reopening of the Strait of Hormuz.
The S&P 500 added about 3.6% last week, and the Nasdaq rose about 4.7% in the period. The Dow, meanwhile, gained 3% on the week.
U.S. bond yields edged slightly higher following an ease in Middle Eastern conflict concerns.
Oil prices seesawed as concerns around the strait’s reopening hovered over the market. West Texas Intermediate crude futures experienced the biggest price drop in nearly 6 years, to settle at $96.57 a barrel, and the international benchmark Brent crude closed at $95.20.
March’s Consumer Price Index report showed that inflation was in line with expectations, at 0.9% for the month and 3.3% on an annual basis. That incorporated a 10.9% jump in energy costs due to the conflict.
When excluding energy prices, however, the report revealed inflation was tame last month. Core CPI increased just 0.2% for the month and 2.6% compared with a year ago, coming in below expectations.
February’s Personal Consumption Expenditures (PCE) data showed stronger consumer spending and relatively stable inflation; however, durable goods orders declined more than survey expectations.
The minutes from the Federal Open Market Committee leaned hawkish, as consumer sentiment from the University of Michigan hit a record low with fears of a prolonged conflict and energy price concerns.
First-quarter earning season is underway, with the information technology sector having expected earnings growth of 41.5% followed by materials with 24.9%.
Corporate confessions expected this week include: Goldman Sachs today; WellsFargo, JP Morgan and Johnson & Johnson report Tuesday; PNC Financial, Bank of America and Morgan Stanley report Wednesday; Thursday we hear from Netflix, PepsiCo, Charles Schwab and Abbott Laboratories; on Friday, State Street Corporation and Truist Financial disclose.
Looking ahead to this week, investors can expect a light economic load with the release of housing and labor market data. Other updates will include the Producer Price Index, industrial production data, and the leading index for February.
Week in review: April 6-10
Economic news
- CPI inflation for March rose modestly following energy-related supply side cost increases.
- CPI inflation rose 0.9% month-over-month and 3.3% year-over-year. The core CPI came in below expectations with a stable 0.2% month-over-month and 2.6% year-over-year.
- Gasoline rose 21.2% month-over-month, the largest monthly increase since the index began in 1967.
- PCE inflation data for February increased, ahead of potential war-related pressures.
- The headline measure rose 0.4% month-over-month and 2.8% year-over-year, while the core measure also rose 0.4% M/M and 3.0% Y/Y, all of which aligned with consensus expectations.
- Fourth-quarter Gross Domestic Product (GDP) was revised downward to an annualized 0.5% from 0.7% with the decline attributed to lower capital expenditures.
- The revision marks the U.S. economy at an annual growth rate of about 2.1% for 2025.
- Consumer sentiment for April declined from 53.3 to 47.6 due to a sharp spike in inflation expectations.
- A double digit percentage jump for energy prices took the front seat.
- One-year inflation expectations Rose to 4.8% from 3.8%, while longer-term expectations Rose to 3.4%.
- The March Institute for Supply Management services Purchasing Managers’ Index registered 54.0, a decrease from February’s 56.1, showing signs of slower momentum while remaining in expansionary territory for the 21st consecutive month.
- The February durable goods order is declined 1.3% M/M, underperforming survey expectations.
- The decline was driven by transportation equipment falling 5.4%, while new orders rose by 0.8%.
Looking Ahead to this week, April 13-17
U.S.
- The highlight of the week, after bank earnings, will be supplementary inflation, data, with the March Producer Price Index on Tuesday and both Import and Export Price Index is on Wednesday. Other releases, capturing attention include the Federal Reserve’s (Fed’s) Beige Book survey of regional economic conditions, March industrial production, and, tentatively, the February leaning index.
- Also on tap: March existing home sales and small business optimism, along with April Home builder sentiment
- Rounding out the docket are April measures of economic activity from the regional fed banks
- Investors will also be watching for any developments in the negotiations for an enduring end to the Iran war.
Asia
- In China, the focus will be on Q1 GDP and March’s industrial production, retail sales, trade balance, home prices, fixed asset investment, and surveyed jobless rate.
- From Japan, look for March‘s money supply, department store sales, along with February’s core machine orders, and capacity utilization.
- Elsewhere in the region, South Korea’s March export price index and unemployment rate hit the tape, in addition to Australia’s April, consumer confidence, March business, confidence, and March labor market data.
Europe
- In Europe, the highlight will be the finalized March CPI readings, along with the euros zones, February industrial production, and trade balance.
- From the UK, watch for the monthly GDP reading, industrial production, index of services, and trade balance.
