Several Major Indexes Hit Record Highs Amid Signs of De-Escalation in the Middle East

Several Major Indexes Hit Record Highs Amid Signs of De-Escalation in the Middle East

Several major indexes notched record highs during the week amid signs of de-escalating conflict in the Middle East, upbeat earnings results, and generally positive economic data. Global equities, as measured by the MSCI ACWI, advanced more than 2.5%, while domestic large-cap stocks, measured by the S&P 500, gained over 3.0%. Domestic small caps and the technology-focused Nasdaq were the strongest performers, returning 3.16% and 4.86%, respectively.

Producer Price inflation Cools

Producer price inflation came in cooler than expected in March, as the Bureau of Labor Statistics reported that PPI rose 0.5% month over month, below forecasts near 1% and in line with February’s revised reading. The softer result was driven by flat services inflation, partially offset by higher energy prices lifting goods inflation, while core PPI, which excludes food and energy, rose just 0.1%, down from 0.3% in February and below expectations.

Bank Earnings Beat Expectations

Early earnings results from major U.S. banks came in stronger than expected, supported by robust trading revenue, helping lift the start of the reporting season. As of Friday, financial sector earnings were projected to rise 19.7% in the first quarter, above the 15.1% growth expected at the start of the week, reflecting improving profit momentum across the group.

Larger Tax Refunds Offsetting Increasing Prices

Consumers are benefiting from larger tax refunds, with the average refund around $3,500, up 11% from last year. In total, household stimulus is expected to reach roughly $200 billion in 2026, more than offsetting the estimated $80 to $100 billion increase in gasoline and other fuel-related spending driven by higher oil prices.

Oil Pricing Update

Comments from Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz would remain open during the truce helped ease concerns over disruptions to global energy flows and supported a more constructive tone in markets. Oil prices extended their recent decline, with U.S. crude falling to around $83 per barrel on Friday, down from about $96 the prior week and a recent peak near $113 in early April, though prices remain up more than 40% year to date.

Looking Ahead

Looking ahead, markets will focus on the health of the U.S. consumer and early signs of April activity, with March retail sales, jobless claims, and flash PMIs helping to clarify whether growth is cooling or simply normalizing. Housing data, including pending home sales, and the final University of Michigan consumer sentiment reading will add color on how higher rates and sticky inflation are shaping demand, all against a busy stretch of earnings that is likely to drive much of the day‑to‑day market narrative.

As Always

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.