• Markets take a breather after reaching all-time highs – Equity markets were modestly lower on Thursday after the S&P 500 and Nasdaq notched new closing highs on Wednesday. The technology-heavy Nasdaq lagged the broader S&P 500. Nonetheless, for the full year, all major U.S. indexes are higher, with the S&P up about 4% and the Nasdaq up about 5% this year so far. On a sector basis, energy, materials, and industrials have led the way higher in 2026, all up over 10%, while financials and health care have lagged, both down about 5% year-to-date. More broadly, recent market action suggests investors have been rapidly repricing away worst-case outcomes as oil prices remain below recent peaks, rates stabilize, and corporate earnings remain resilient—key supports behind the swift rebound to new highs.
   
• U.S.-Iran ceasefire extended - President Trump extended the ceasefire with Iran this week, reducing near-term geopolitical risk and allowing more time for diplomacy. Despite this development, energy markets reflect continued stress. WTI oil prices moved higher as the Strait of Hormuz remains disrupted and the U.S. blockade on ships from Iranian ports continues. Brent crude oil is back above $105, while WTI crude hovers around $96, both up over 65% this year alone. Importantly, however, energy futures markets are reflecting expectations for the disruptions to be short-lived, pointing to crude prices moving back toward the mid-$70s by year-end. If realized, falling oil prices should help ease headline inflation and help reduce pressure on energy-intensive sectors, in our view.
   
• Broadening of market leadership theme may re-emerge – Looking ahead, we do not think investors should assume the market is completely out of the woods. The narrative around the conflict remains fluid, and while the probability of the most adverse outcomes appears to have diminished, considerable uncertainty remains around the duration and resolution of energy supply disruptions. Historically, V‑shaped rebounds have shown a mixed record in sustaining momentum. There have been periods such as the tariff‑induced correction in April 2025 when markets not only recovered quickly but were followed by strong performance. In other instances, equities moved sideways as gains were digested. And in episodes like early 2000 and late 2007, sharp rebounds ultimately marked major market peaks. In the current environment, a pause and sideways phase appear likely, in our view, particularly until oil supplies normalize and physical shortages ease more decisively. If the path toward de‑escalation remains intact, we would expect markets to gravitate back toward the themes that defined performance earlier in the year, with prior leaders reasserting themselves. This would likely entail cyclical sectors regaining leadership over defensives, U.S. small‑ and mid‑caps sustaining relative momentum versus large-caps, and emerging‑market equities continuing to outperform domestic stocks.

Mona Mahajan ;
Investment Strategy

^{Source for all data: Bloomberg.} 

• Markets close higher as U.S.-Iran ceasefire extended – Equity markets advanced on Wednesday, with the S&P 500 and Nasdaq notching new closing highs, as investors appear increasingly willing to look through geopolitical uncertainty and refocus on growth and earnings. Technology and communications led gains, reinforcing the market's risk-on tone. Bond yields edged lower, with the 10-year Treasury yield at 4.30%. Internationally, Asian markets finished mixed overnight as Japan's Nikkei index reached a record high, closing in on 60,000. The U.S. dollar strengthened against major international currencies.
   
• U.S.-Iran ceasefire extended - President Trump extended the ceasefire with Iran, reducing near-term geopolitical risk and allowing more time for diplomacy. Despite this development, energy markets reflect continued stress. WTI oil prices moved higher as the Strait of Hormuz remains disrupted and the U.S. blockade on ships from Iranian ports continues. Importantly, energy futures markets are reflecting expectations for the disruptions to be short-lived, pointing to crude prices moving back toward the mid-$70s by year-end. If realized, falling oil prices should help ease headline inflation and help reduce pressure on energy-intensive sectors, in our view.
   
• Earnings season check-in – Tesla, the first of the "Magnificent 7" to report this cycle, is set to release results after the closing bell today. Consensus estimates point to earnings per share (EPS) of $0.36 — a 30% year-over-year increase — on about $22 billion of revenue. More broadly, the early read on first-quarter earnings is encouraging: With 17% of S&P 500 companies reporting, 84% have beaten EPS estimates by an average upside surprise of 13%. Forecasted EPS growth for the quarter has been revised up to over 12%, which, if achieved, would mark the sixth straight quarter of double-digit earnings growth. Technology is expected to lead by a wide margin, with earnings gains of more than 40% year-over-year, followed by materials and financials. Importantly, the breadth of growth is expected to be strong, as eight of the 11 sectors are projected to post year-over-year EPS gains. We believe wide earnings growth should help support more balanced market performance across sectors and help strengthen the case for portfolio diversification.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data: FactSet.}

• Stocks edge lower on geopolitical uncertainty – U.S. equity markets closed lower on Tuesday as renewed geopolitical uncertainty outweighed a better-than-expected March retail-sales report. After opening in positive territory, stocks reversed course and finished the day lower following reports that U.S.-Iran negotiations had been paused, with the two-week ceasefire set to expire tomorrow evening. Overseas, Asian markets moved higher overnight, while European markets ended lower in response to the pause in talks between the U.S. and Iran. In addition, the eurozone’s ZEW economic expectations survey fell to its lowest level since 2022, reflecting growing concern about the economic consequences from the war in Iran in Europe. Treasury yields rose, with the 10-year yield climbing to 4.31% and the 2-year yield closing at 3.80%. In commodity markets, oil prices also moved higher, with WTI crude settling at around $92 per barrel.
   
• Consumer check-in – Retail-sales data for March showed that consumer spending remained resilient despite rising oil prices. Headline retail sales rose 1.7% in March, up from 0.7% in February and above expectations for a 1.6% gain. The increase in headline sales was driven in part by a 15.5% surge in spending at gasoline stations amid the spike in oil prices following the war in Iran. However, looking beyond gasoline spending suggests that consumption was strong more broadly. Control-group retail sales — which exclude spending at gas stations, motor vehicle and parts dealers, building materials and garden equipment, and food services — rose a solid 0.7%, above expectations for a 0.2% gain. Additionally, the preliminary ADP employment report showed that private employers added roughly 55,000 jobs in the four weeks ending April 4, marking the fifth consecutive week of acceleration and pointing to stability in the labor market. In our view, stabilizing labor-market conditions and steady household spending should continue to support economic activity over the balance of the year.
   
• All eyes on the next Fed chair – Investors heard from Kevin Warsh on Tuesday morning, President Trump’s nominee to be the next chair of the Federal Reserve, as he delivered remarks before the Senate Banking Committee. Warsh was nominated in late January to succeed current Chair Jerome Powell, whose term runs through May 15. Confirmation appears likely, though the timing remains uncertain after Senator Thom Tillis said he would not vote to confirm any Fed nominees until the investigation into Powell over Fed renovation costs is concluded. Powell has previously said he will remain chair until his successor is confirmed. From a policy perspective, Warsh has argued that interest rates should be lower and has been a vocal critic of the Fed’s balance sheet. While the Fed chair is a highly visible role, the Fed’s structure limits any one member’s influence. Specifically, the Federal Open Market Committee, which votes on monetary policy, gives equal votes to all 12 voting members, and dissents have been common in recent meetings. The bottom line, in our view, is that Warsh likely represents a dovish shift in the Fed chair role on interest rates, but the overall impact should be limited. We continue to believe the Fed’s easing cycle remains intact, with the Fed likely to deliver one or two additional rate cuts this cycle.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.}

• Stocks tick lower with geopolitical tensions back in focus – U.S. equity markets closed modestly lower on Monday as investors digested weekend news that Iran has again declared the Strait of Hormuz closed in response to the U.S. naval blockade of Iranian ships. The market reaction was contained, with the S&P 500 and Nasdaq only modestly lower, which, in our view, likely reflects investor expectations that the broader trajectory of the conflict remains one of de-escalation. Further supporting this view, the Russell 2000 small-cap index traded higher on the day. Overseas, equity markets in Asia closed higher overnight, while European markets traded lower. Bond yields were flat on Monday, with the 10-year Treasury yield closing around 4.26% and the 2-year yield at 3.72%. In commodity markets, oil prices were up roughly 5% following the weekend developments, rising to around $87 per barrel.
   
• Geopolitical tensions back in focus – Geopolitical tensions returned to the forefront over the weekend following reports that Iran had again declared the Strait of Hormuz closed in response to the U.S. naval blockade of Iranian ships entering and leaving port. Despite the escalation, market reaction has been orderly, with U.S. equity markets modestly lower and oil prices higher, though still below $90 per barrel. Additionally, equity markets in Asia—regions that are especially sensitive to higher oil prices—closed higher overnight. In our view, this suggests that markets continue to believe the most likely path forward is de-escalation, particularly as the U.S. sends officials to the Middle East for another round of negotiations this week. In our view, markets are likely to remain sensitive to headlines surrounding the conflict in the days and weeks ahead. Even so, we believe strong corporate earnings growth and healthy economic activity should create attractive opportunities in equity markets over the balance of the year. As part of our opportunistic asset-allocation guidance, we recommend that investors take a global approach to overweighting equities relative to bonds. Specifically, we see attractive opportunities in U.S. large- and mid-cap stocks, as well as international developed small- and mid-cap equities and emerging-market equities.
   
• Earnings season ramps up – First-quarter earnings season will pick up this week, with nearly 20% of S&P 500 companies scheduled to report. Last week, several of the largest U.S. financial services companies reported better-than-expected earnings, and S&P 500 earnings per share are expected to grow 12% in the first quarter. For the full year, S&P 500 earnings are expected to grow 18%, which, if achieved, would mark the third straight year of double-digit earnings growth. Since the start of the conflict, sectors such as industrials, consumer staples, and consumer discretionary have seen modest downward revisions to 2026 earnings estimates, as higher oil prices could pressure profits in these industries. However, upward revisions in the energy, technology, and materials sectors have more than offset weakness elsewhere in the market. In addition, full-year earnings growth is expected to be broad-based, with all 11 sectors of the S&P 500 projected to post positive growth. Against this backdrop, we recommend a cyclical tilt within our opportunistic equity sector guidance, favoring consumer discretionary and industrials while underweighting utilities and consumer staples and maintaining neutral allocations across all other sectors.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.}

• Markets finish the week higher as Iran declares Strait of Hormuz open – The S&P 500 and Nasdaq reached new record highs on Friday as Iran announced that the Strait of Hormuz is open to commercial shipping during the 10-day Israel-Lebanon ceasefire. Consumer discretionary and industrials led the advance, as fuel-intensive sectors rebounded sharply. Bond yields moved lower, with the 10-year Treasury yield at 4.24%. Internationally, Asian markets finished lower overnight, while Europe traded higher. The U.S. dollar softened against major international currencies, consistent with a modest unwinding of safe-haven demand for the world's reserve currency amid today's risk-on tone.
   
• Oil prices pull back - In energy markets, WTI oil prices fell roughly 9% as some of the geopolitical risk premium was removed with the reopening of the Strait of Hormuz, the narrow waterway that normally handles about 20% of global oil and gas flows. While U.S. restrictions on Iranian ports remain in place, oil futures markets also retreated, now implying crude prices could move back toward the low-$70s by year-end. If realized, falling oil prices should help ease headline inflation and help reduce pressure on energy-intensive sectors.
   
• Earnings season off to a solid start – Earnings season kicked off this week on a positive note, with the six largest U.S. banks delivering better-than-expected earnings per share (EPS). More broadly, the first-quarter S&P 500 earnings outlook has improved. EPS growth has been revised up to roughly 12%, which, if achieved, would mark the sixth straight quarter of double-digit earnings growth. Technology is again expected to lead by a wide margin, with earnings gains of more than 40% year-over-year, followed by materials and financials. Importantly, the breadth of growth is expected to be strong, as eight of the 11 sectors are projected to post year-over-year EPS gains. We believe wide earnings growth should help support more balanced market performance across sectors and help strengthen the case for portfolio diversification.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data: FactSet.}