Major Indexes Advance as U.S.-Iran Ceasefire Eases Oil Prices and Boosts Sentiment

Major Indexes Advance as U.S.-Iran Ceasefire Eases Oil Prices and Boosts Sentiment

Global equity indexes recorded solid gains for a second consecutive week, as signs of de-escalating conflict in the Middle East and a pullback in oil prices lifted investor sentiment, while continued enthusiasm around artificial intelligence-related stocks provided additional support. Global equities, as measured by the MSCI ACWI, advanced 4.24% for the week, while domestic large-cap stocks, measured by the S&P 500, gained more than 3.5%. Emerging markets were the standout performers, with the MSCI Emerging Markets Index rising nearly 8% for the week.

Inflation Heats Up

Inflation accelerated in March, as the Bureau of Labor Statistics reported that consumer prices rose 3.3% year over year, up from 2.4% in February and marking the fastest pace since May 2024, largely driven by higher gasoline prices. Core inflation, which excludes food and energy, remained more contained, rising 2.6% year over year, a modest increase from the prior month.

Mixed Signals Persist

Markets digested mixed U.S. economic signals as core PCE inflation eased to 3.0% year over year and personal income ticked lower by 0.1%, while the BEA revised Q4 2025 GDP growth down to 0.5%, reflecting softer investment; investors kept a close eye on the Federal Reserve’s policy path and geopolitical tensions in Iran, which continue to pose upside risks to energy prices and near-term inflation expectations.

Consumer Sentiment Fell Sharply

The University of Michigan’s preliminary Index of Consumer Sentiment fell sharply to 47.6 in April, down 5.7 points from March, as all components declined and sentiment weakened across all demographic groups; consumers cited heightened concerns about high prices and falling asset values, while one-year inflation expectations surged to 4.8%, up a full percentage point from the prior month.

The Institute for Supply Management (ISM) reported that its Services PMI slipped 2.1 points to 54 in March, missing expectations of around 55 but marking the 21st straight month of expansion; business activity and new orders remained strong, while rising oil and fuel costs pushed the prices index to its highest level since October 2022.

Looking Ahead

Looking ahead, markets will focus on producer price inflation (PPI), with the March PPI report due Tuesday and expected to show whether upstream price pressures are continuing to build, alongside key March home sales data, including existing-home sales, which will give further insight into the housing sector’s response to higher rates and affordability constraints.

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.