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US Stocks Grind Higher as Q1 Earnings Season Ramps Up
Indexes were mixed for the week, but the S&P 500 and Nasdaq both finished higher as Q1 earnings season ramped up, supported by upbeat corporate results and several positive economic data points released throughout the week. Global equities, as measured by the MSCI ACWI, were mainly flat for the week, slipping about 0.2%, while domestic large‑cap stocks, represented by the S&P 500, gained a little over 0.5%. The technology‑focused Nasdaq and emerging‑markets stocks were the strongest performers, returning approximately 1.51% and 0.85%, respectively.
Earnings Momentum Builds
As we noted earlier, earnings season gained momentum last week, with close to 20% of S&P 500 companies releasing results. Based on data from FactSet, roughly 84% of those reporters are exceeding earnings expectations, and aggregate profits are running about 15% above last year’s levels—putting the index on track for a sixth straight quarter of double‑digit earnings growth. Investors continued to focus on themes like AI‑driven demand and the build‑out of related infrastructure, the durability of consumer spending, and how effectively companies are offsetting higher input and labor costs.
Spending Beats Expectations
U.S. retail sales climbed 1.7% in March, marking the strongest monthly gain since early 2023 and boosted in large part by a 15.5% jump in gas station receipts. Excluding gasoline, sales still advanced a solid 0.6%, and the control group category that feeds directly into GDP rose 0.7%. Upward revisions to both February and January suggest consumer activity and the broader U.S. economy were firmer in the first quarter than earlier estimates implied.
Consumer Sentiment Falls
The University of Michigan’s April Index of Consumer Sentiment fell 3.5 points to 49.8, signaling that confidence remains subdued even though the final figure improved from the preliminary estimate after the U.S.–Iran ceasefire announcement. Inflation expectations moved higher, with one‑year expectations rising to 4.7% and long‑run expectations increasing to 3.5%, the highest level since October 2025.
Looking Ahead
Looking ahead, markets will turn their attention to a busy economic calendar for the week. The main focus will be the conclusion of the Federal Reserve’s two‑day policy meeting on Wednesday. Other key releases include the advance estimate of first‑quarter GDP, the Personal Consumption Expenditures (PCE) Price Index, and weekly unemployment claims.
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.
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