Tuesday, 4/21/2026 a.m.

  • Stocks edge higher on strong consumer spending – U.S. equity markets are trading higher on Tuesday following a better-than-expected retail-sales report for March. Overseas, Asian markets moved higher overnight, while European markets are little changed even as the euro area ZEW economic expectations survey fell to its lowest level since 2022, reflecting concern over the economic consequences of the war in Iran. On the geopolitical front, the U.S. and Iran are expected to resume peace talks this week, with the two-week ceasefire agreed to earlier this month set to expire on Wednesday. Bond yields are modestly higher, with the 10-year Treasury yield rising to 4.27% and the 2-year yield at 3.76%. In commodity markets, oil prices are trading slightly lower as investors await further updates on U.S.-Iran negotiations, with crude oil opening around $87 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 – Later this morning, investors will hear from Kevin Warsh, President Trump’s nominee to be the next chair of the Federal Reserve, as he delivers 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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