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Markets Rise in U.S. Holiday-Shortened Week as Middle East Tensions Ease
Global equity markets finished the week higher as easing tensions in the Middle East supported sentiment, though the path was volatile. After a weak start on Monday, equities rallied sharply midweek as U.S. President Donald Trump signaled a willingness to scale back U.S. military involvement in Iran. Global equities, as measured by the MSCI ACWI, advanced 2.85% for the week, while domestic large-cap stocks, measured by the S&P 500, gained more than 3%. Despite the weekly rebound, March was a challenging month for markets, with all major indexes finishing lower, led by international equities, which declined by double digits.
Labor Market Cooling Gradually
Labor market data during the week was mixed but pointed to a gradual cooling trend. ADP reported that private employers added 62,000 jobs in March, slightly below February’s revised 66,000 but above expectations, while initial jobless claims declined to 202,000, coming in better than forecast. However, continuing claims rose to 1.841 million, and separate data from the Bureau of Labor Statistics showed job openings falling to 6.9 million and hiring declining to the lowest level since 2020, signaling softer labor demand.
Consumer Confidence Up, Caution Remains
Consumer confidence edged higher in March, as the Conference Board reported that its Consumer Confidence Index rose 0.8 points to 91.8, with improved views on current conditions offsetting a more cautious outlook for the future. This marked the second consecutive monthly increase, though the broader trend in sentiment has remained downward since 2021, even as consumers continue to navigate higher costs tied to tariffs and ongoing geopolitical tensions.
Manufacturing Grows, Jobs Lag
U.S. manufacturing activity expanded for a third consecutive month in March, as the Institute for Supply Management reported its Manufacturing PMI rose to 52.7, exceeding expectations and supported by gains in new orders and production. However, the report highlighted ongoing weakness in the labor market, with employment contracting for a 30th straight month, while price pressures increased to their highest level since June 2022.
Looking Ahead
For the week ahead, key economic data releases include the ISM Services PMI and the March Consumer Price Index inflation report.
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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