Categories:
Key areas of focus
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It’s another busy week for macro, with the first April regional business surveys (Empire and Philly Fed), along with Existing Home Sales and the NAHB Housing Index. We’ll also get updates on the Producer Price Index (PPI), Industrial Production, and small business sentiment, providing a broad read on growth, inflation, and demand trends.
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Earnings season ramps up this week, led by the big banks. According to FactSet, earnings expectations have been trimmed slightly, with S&P 500 earnings growth now expected at around 12.6%, down from 13.2% a week prior. Even with these lower revisions, that would still mark a sixth straight quarter of double-digit earnings growth.
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Markets will be watching geopolitical developments closely following the lack of a U.S.–Iran agreement over the weekend. Oil pulled back sharply last week on easing tensions, but remains elevated. The key question is whether prices stabilize or reaccelerate depending on new geopolitical developments.
Week in review
Equities finished the week higher, driven largely by a temporary ceasefire between the U.S. and Iran and optimism around energy supply conditions through the Strait of Hormuz. Markets started the week on a positive note, with the ISM Services Index showing resilient activity despite early signs of softening in the employment and inflation components. Tuesday reversed some of those gains ahead of the start of earnings season, while durable goods data pointed to continued volatility in manufacturing, largely driven by transportation. The tone shifted midweek following the ceasefire announcement, with equities and bonds moving higher, volatility declining, and oil prices falling significantly. Thursday brought a busy macro backdrop, including softer Q4 2025 GDP revisions, February PCE inflation accelerating at the fastest pace since January 2022, and mixed labor data, with continuing jobless claims falling to their lowest level since May 2024. On Friday, equities moved higher again as CPI came in softer than expected. However, consumer sentiment deteriorated, with inflation expectations rising.
Spotlight
The April 7 ceasefire has provided some temporary relief to the market, but underlying tensions remain unresolved. Key questions around nuclear policy and control of the Strait of Hormuz still need to be addressed. Unfortunately, some of the economic damage is already done, including infrastructure destruction across key energy assets such as Qatar’s Ras Laffan LNG complex and multiple Gulf refineries. These impacts cannot be reversed by a ceasefire and will take time to repair. The knock-on effects on inflation and supply chains will also take time to work through. Shipping disruptions remain a key pressure point, with over 1,000 vessels still stranded in the Gulf, and any normalization in flows will likely be measured in weeks, not days. Meanwhile, the energy shock is feeding into inflation and pushing back expectations for rate cuts. Probabilities for at least one rate cut sat at 36.3% on Friday compared to 96.13% at the end of February. The path forward depends on whether the truce holds and how quickly tanker traffic resumes.
Markets
Sectors
Style & Market Cap
Sources
Institute for Supply Management, Institute for Supply Management (ISM) Purchasing Managers Index (PMI) Services Report, retrieved from ISM, https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/services/march/
2. Durable Goods Orders
United States Census Bureau, Monthly Advance Report on Durable Goods Manufacturers' Shipments Inventories and Orders, retrieved from U.S. Census, https://www.census.gov/manufacturing/m3/adv/current/index.html
3. 4th Quarter GDP (Third Estimate)
Bureau of Economic Analysis, Gross Domestic Product, GDP (Third Estimate), Industries, Corporate Profits, State GDP, and State Personal Income, 4th Quarter and Year 2025, retrieved from BEA, https://www.bea.gov/news/2026/gdp-third-estimate-industries-corporate-profits-state-gdp-and-state-personal-income-4th
4. Personal Consumption Expenditures Price Index (PCE)
Bureau of Economic Analysis, Personal Consumption Expenditures Price Index, retrieved from BEA, https://www.bea.gov/data/personal-consumption-expenditures-price-index
5. Jobless Claims
U.S. Department of Labor, Unemployment Insurance Weekly Claims, retrieved from U.S. Department of Labor; https://www.dol.gov/ui/data.pdf
6. Consumer Price Index (CPI) – Inflation
U.S. Bureau of Labor Statistics, Consumer Price Index Summary, retrieved from U.S. Bureau of Labor Statistics; https://www.bls.gov/news.release/cpi.nr0.htm
7. Consumer Sentiment
Surveys of Consumers, University of Michigan Consumer Sentiment Index Summary, retrieved from University of Michigan, https://www.sca.isr.umich.edu/
8. CME FedWatch Tool
CME Group, FedWatch, retrieved from CME Group; https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
9. FactSet Earnings
FactSet Earnings Insight, retrieved from FactSet, https://insight.factset.com/topic/earnings
Market Data
Morningstar Direct using Morningstar Indices
Authors:
Anthony Silva, CFA®
Senior Director of Strategy Management
World Investment Advisors, LLC