Tuesday, 4/21/2026 p.m.

  • 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.

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