US Stock Weekly Report

2026-04-06

Previous Week’s Market Review & Analysis

Macroeconomic Landscape: The geopolitical landscape, particularly the ongoing Iran conflict, continued to dominate market sentiment, driving oil prices higher. Brent crude was reported around $114 on March 30, with US WTI exceeding $105. Elevated energy costs are expected to exacerbate inflationary pressures and constrain global economic growth. Federal Reserve Chair Jerome Powell's comments on March 30 suggested a 2026 rate hike was unlikely, contributing to a bond market rally. The Federal Funds Effective Rate for March stood at 3.64%. Inflation concerns intensified as the Fed subtly revised its 2026 inflation forecast upward from 2.4% to 2.7%, and core inflation from 2.5% to 2.7%, primarily due to energy prices. The February CPI year-over-year was 2.4%. On April 3, the March jobs report showed robust growth, with nonfarm payroll employment increasing by 178,000, surpassing expectations, and the unemployment rate slightly decreasing to 4.3%. Job gains were prominent in healthcare, construction, and transportation and warehousing sectors. Average hourly earnings modestly rose 0.2% in March and 3.5% year-over-year. Consumer sentiment, as indicated by the University of Michigan, declined by late March, influenced by the Iran conflict, especially among higher-income households. Conversely, The Conference Board's index reported an improvement in US consumer confidence in March, reaching 91.8 from 91 in February. US manufacturing expanded for the third consecutive month, with the ISM Manufacturing PMI climbing to 52.7%, its highest since August 2022. By April 5, the average 30-year fixed-rate mortgage rate decreased to 6.20% APR, 26 basis points lower than the previous week.

Market Performance Overview: US equities experienced considerable volatility. The S&P 500 continued its downward trend, marking a fifth consecutive weekly loss, its longest since early 2022, and ended March 30 down 0.4%, bringing its year-to-date decline to 7.3%. For the month of March, the S&P 500 plunged 5%. The Nasdaq Composite slid 0.7% on March 30, falling deeper into correction territory with a 10.5% year-to-date decline and a 3.2% loss for the week, impacted by weakness in technology and chip stocks, alongside renewed AI valuation jitters. The Dow Jones Industrial Average posted a marginal 0.1% gain on March 30 but recorded a 0.9% weekly decline and was in correction territory, down 5.9% year-to-date. The Russell 2000 also fell 1.5% on March 30. Sector-wise, energy and consumer staples showed strength on March 30, as investors moved into defensive, oil-linked blue chips. Technology and communication services were laggards.

Key Events Analysis: The release of the stronger-than-expected March jobs report on April 3 was a key economic event. No significant corporate earnings impacting the broad market were reported this week.

Flows & Sentiment: Market sentiment remained risk-off, driven by escalating oil prices and geopolitical tensions. The CBOE Volatility Index (VIX) stayed elevated above 30, reflecting investor anxiety. Investors maintained a cautious stance amidst global macroeconomic uncertainty and rising energy concerns.

Overall Assessment: The past week was characterized by market volatility and bearish sentiment, largely stemming from geopolitical developments and their inflationary implications. Major indices were either in or approaching correction territory. While the March jobs report was positive, it did not fully alleviate inflation concerns fueled by surging energy costs.

Next Week’s key market drivers & Investment Outlook

Upcoming Events: The coming week features several critical US economic data releases. These include the ISM Services Purchasing Managers' Index on Monday, April 6; the release of FOMC minutes from the March meeting on Wednesday, April 8; the US Personal Consumption Expenditures (PCE) index on Thursday, April 9; and both the US CPI data and the University of Michigan's preliminary Consumer Sentiment Index on Friday, April 10. Trading volumes in some international markets may be lower on Monday due to Easter Monday.

Market Logic Projection: The market will continue to closely monitor upcoming inflation data, specifically the CPI and PCE, to assess the impact of elevated energy prices and its potential influence on future Federal Reserve policy decisions. The FOMC minutes will be scrutinized for further indications regarding the Fed's stance on interest rate adjustments. Geopolitical developments are anticipated to remain a significant factor influencing market sentiment.

Strategy & Allocation Recommendations: Investors are advised to maintain a cautious approach given the persistent geopolitical uncertainty and inflationary pressures. Consideration should be given to defensive sectors and those with less exposure to fluctuating energy costs. Close attention to forthcoming inflation data is crucial for identifying any shifts in trend.

Risk Alerts: An escalation of the Iran conflict or further significant increases in oil prices present substantial upside risks to inflation and downside risks to economic growth. Should inflation prove more persistent than currently anticipated, the Federal Reserve could adopt a more hawkish stance, potentially surprising markets. Overall, the market remains highly susceptible to geopolitical headlines.