• Stocks end mixed, capping a strong week - U.S. equities finished mixed on Friday, bringing to a close a strong week overall. Geopolitics remained front and center as the recent relief rally paused, though optimism persisted that the fragile ceasefire could open a path toward a broader Iran peace deal. The U.S. and Iran are set to hold talks on Saturday, with investors watching to see whether Tuesday’s two‑week ceasefire agreement can be extended into something more durable. In commodities, WTI crude slipped to around $96 per barrel and posted a sharp 13% decline for the week. On the macroeconomic front, today’s U.S. inflation data reflected last month’s surge in energy prices, but core inflation rose less than feared, offering some reassurance to markets. Away from geopolitics, mega‑cap technology stocks, particularly semiconductors, extended this week’s outperformance. Taiwan Semiconductor Manufacturing reported another quarter of record revenue, driven by continued strong demand for AI‑related chips. Elsewhere, the U.S. dollar weakened, while government bond yields ended the day slightly higher.
   
• Consumer prices jump, but core inflation rises less than expected - The first inflation reading following the start of the conflict reflected a sharp rise in energy prices, with the energy index posting its largest increase since 2005. Headline CPI rose to 3.3% in March from 2.4%, as the gasoline index surged 21% month-over-month, the largest increase since data collection began in 1967. Encouragingly, core inflation rose less than anticipated, increasing 2.6% year-over-year. The supercore index—which tracks services inflation excluding housing and is used to gauge underlying labor‑intensive services inflation—slowed to its weakest monthly pace in eight months. While there will likely be a lag before elevated energy prices filter through various sectors of the economy, we believe today’s data pushes back against the Fed’s rate‑hike narrative. Under our base‑case scenario where oil prices start to slowly normalize, we expect the Fed to cut rates once in the back half of the year, which should help reinforce recent stabilization in bond yields.
   
• A positive earnings season may support the rebound in stocks - Despite the fragile ceasefire and still‑elevated geopolitical risks, stocks are now within 2% of their all‑time highs. We believe this reflects not only optimism around potential de‑escalation of the conflict, but also strong support from rapidly rising corporate profits. U.S. banks kick off the first‑quarter earnings season next week. Consensus expects S&P 500 revenue to grow nearly 10% year-over-year and earnings to rise 13%. If realized, this would mark the strongest sales growth since 2022 and the fifth consecutive quarter of double‑digit earnings growth. Investor focus will be on management commentary, particularly regarding the impact of high energy prices. Encouragingly, the primary drivers of S&P 500 earnings are not the sectors most negatively exposed to oil prices. Technology, in particular, has seen the largest increase in expected earnings since December 31, with first‑quarter earnings growth now estimated at 44%. Strength in technology has been sufficient to offset weakness in health care and consumer discretionary. Additionally, the energy sector’s earnings sensitivity to oil prices may help offset cost pressures elsewhere in the market, helping provide further support to aggregate earnings growth.

Angelo Kourkafas, CFA ;
Investment Strategy

^{Source for all data: FactSet, Bloomberg.} 

• Markets close higher as investors monitor U.S.-Iran ceasefire – Equity markets advanced on Thursday, with the consumer discretionary and industrial sectors leading gains. Bond yields moved higher, with the 10-year Treasury yield at 4.29%. In international markets, sentiment was weaker, with Asia declining overnight and Europe trading lower. The U.S. dollar weakened against major currencies. In energy markets, WTI oil rebounded toward $99 per barrel as disruptions persist in the Strait of Hormuz amid disputes over the terms of the U.S.-Iran ceasefire. However, futures pricing still reflects the view that this disruption could be temporary, implying that WTI could drift back toward the mid-$70 range by year-end.
   
• Fed's preferred inflation measure in line with estimates – Headline personal consumption expenditure (PCE) inflation held steady at 2.8% annualized in February, matching forecasts. A modest pickup in goods inflation to 1.8% year over year was offset by continued improvement in services inflation, which slowed to 3.3%, the lowest reading in five years. Importantly, housing inflation eased to 3.1%, a key driver in moderating services inflation. Core PCE, which excludes more-volatile food and energy prices, edged down to 3.0%, a positive step, though still well above the Fed's 2% target. Inflation is widely expected to reaccelerate as higher oil prices feed through, at least temporarily. As a result, we expect the Fed to maintain its recent pause on rate cuts. We think the stabilizing labor market should give policymakers room to be patient to confirm that higher inflation does not become persistent.
   
• Jobless claims rise modestly – Initial jobless claims increased to 219,000 this past week, above the 210,000 consensus estimate. Continuing claims — reflecting the total number of people receiving benefits — fell more than expected to 1.79 million, suggesting more workers are finding new employment. Taken together, we think these figures are consistent with other recent data pointing to a stabilizing labor market. Slower job creation alongside a moderate pace of layoffs should help keep wage gains running modestly above inflation, in our view. However, price pressures could pick up due to energy costs, potentially raising the bar for real wage gains.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Markets rally on U.S.-Iran ceasefire – U.S. equity markets traded firmly higher on Wednesday following Tuesday’s announcement that the U.S. and Iran have agreed to a two-week ceasefire, contingent on the reopening of the Strait of Hormuz. Equity markets rallied sharply in response, with the S&P 500 up 2.5% and the Nasdaq gaining 2.8%. Overseas, Asian equities posted strong overnight gains, with Japan’s Nikkei rising more than 5%, while South Korea’s KOSPI Index surged nearly 7%. European equity markets followed suit, closing higher by roughly 5% on Wednesday. Government bond yields moved lower globally as investors reassess expectations for central-bank monetary policy. The 10-year U.S. Treasury yield declined to around 4.29%, while the 2-year yield closed near 3.79%. Oil prices were sharply lower, with WTI crude down roughly 15% and closing around $96 per barrel. Easing geopolitical tensions also weighed on the dollar, with the greenback down nearly 1% against a basket of developed-market currencies.
   
• U.S.-Iran ceasefire provides boost to global equity markets – The two-week ceasefire announced yesterday evening drove strong gains across global equity markets, while oil prices and global government bond yields declined. We expect markets to remain sensitive to headlines in the coming weeks, particularly as negotiations progress during the ceasefire period. That said, we view yesterday’s announcement as a constructive step toward a more durable resolution, especially if tanker traffic through the Strait of Hormuz is able to resume. We continue to see attractive opportunities in global equity markets, and we recommend that investors consider an overweight to equities relative to bonds. In the U.S., we believe opportunities are attractive in large- and mid-cap stocks, which stand to benefit from sustained AI-related investment and steady economic growth. Overseas, we see attractive opportunities in international developed small- and mid-cap equities, where valuations appear compelling, as well as in emerging-market equities, which could benefit from continued enthusiasm around AI.
   
• Decline in oil prices a welcome development for inflation, though normalization will take time — Oil prices are sharply lower on Wednesday following the ceasefire announcement, with WTI crude down roughly 15% to around $96 per barrel. While uncertainty remains elevated, we view the ceasefire as a constructive step toward ending the conflict in Iran and restoring crude oil flows through the Strait of Hormuz. That said, even if traffic resumes, we expect global oil supply normalization to take time, with prices likely to remain elevated relative to pre-conflict levels in the months ahead. Consistent with this view, futures markets currently expect crude oil prices to end the year at around $75 per barrel—little changed from prior to the ceasefire announcement, and well above the sub-$60 levels seen at the start of the year. Persistently elevated oil prices are likely to put upward pressure on headline inflation and may also feed into core inflation as businesses seek to pass through higher energy costs. The key takeaway, however, is that should a durable resolution to the conflict be achieved, we believe the Federal Reserve will be more inclined to look through any resulting inflationary pressures as a one-off increase. Thus, while rate cuts may be delayed, we continue to expect one to two additional Fed interest-rate cuts over the remainder of this cycle.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Markets edge higher ahead of deadline for U.S.-Iran deal – Equity markets closed higher on Tuesday, with communications and energy stocks leading gains. President Trump has set an 8:00 p.m. ET deadline this evening for a deal between the U.S. and Iran, although this timeline could still shift. Bond yields fell, with the 10-year Treasury yield at 4.30%. In international markets, Asia was mixed overnight, while Europe was broadly lower. The U.S. dollar weakened against major currencies. In energy markets, WTI oil finished lower after briefly reaching $117 per barrel, its highest price since 2022. Despite the recent rise, energy futures continue to imply WTI may retreat toward the mid-$70s by year-end.
   
• Employment report points to firmer job growth – U.S. private employers added an average of 26,000 jobs per week for the four weeks ending March 21, marking the third straight weekly improvement and the strongest pace since the weekly ADP series began in September 2025. While the recent rise in energy prices poses downside risks to both the economy and labor market, the pace of hiring remains broadly consistent with our expectation for monthly job growth in the 50,000 to 100,000 range this year. We think this modest pace should be enough to sustain near-full employment, given slower population growth tied to tighter immigration enforcement and an aging workforce. As a result, we expect the labor market to remain characterized by slower hiring but limited layoffs, which should keep the unemployment rate contained near 4.5%.
   
• Durable goods orders fall more than expected – New orders for manufactured durable goods — those meant to last three years or more — declined 1.4% in February to $315 billion, a weaker-than-expected result and the third consecutive monthly decline. Transportation equipment was the main drag, down 5.4%, with nondefense aircraft orders especially weak*. Excluding the volatile transportation sector, new orders increased 0.8% month-over-month, ahead of estimates, suggesting underlying demand remains firmer than the headline figure implies. We also expect AI infrastructure buildout and business investment incentives in the One Big Beautiful Bill Act to help support continued demand.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. Source for data cited: *U.S. Census Bureau}

• Markets edge higher to begin the week – U.S. equity markets closed modestly higher on Monday as investors continued to monitor developments in the Middle East. Over the weekend, the U.S. administration indicated that strikes on Iranian energy infrastructure could begin as early as Tuesday evening if negotiations fail to yield an agreement. Subsequent reports suggest that discussions regarding a potential ceasefire remain ongoing, although the prospects for a durable resolution appear uncertain. On the economic front, the ISM Services PMI remained in expansion territory in March at 54; however, the prices index rose to its highest level since October 2022, potentially signaling upside risks to inflation. Treasury yields moved modestly higher on Monday, with the 10-year Treasury yield at 4.34% and the 2-year yield around 3.85%. Oil prices also edged higher on Monday, with crude settling at approximately $112 per barrel.
   
• March employment data points to resilience – Last Friday’s March jobs report provided further evidence of underlying resilience in the U.S. labor market. Nonfarm payrolls increased by 178,000, significantly above expectations for a gain of 60,000. Although payroll growth in the prior two months was revised modestly lower by a combined 7,000, the solid March increase brought the three-month average gain in nonfarm payrolls to 68,000, consistent with our expectation entering the year for monthly job growth in the 50,000 to 100,000 range. Job gains in March were broad-based. Goods-producing sectors, including manufacturing and construction, posted solid employment gains, while service-providing industries such as health care saw strong job growth as well. In addition, the unemployment rate declined to 4.3%. While the current energy shock presents downside risks to both economic activity and labor-market conditions, we believe the March employment report remains consistent with a stable labor market. Although hiring has slowed relative to the immediate post-pandemic period, we think a more moderate pace of job growth is likely sufficient to sustain full employment, given slower population growth associated with tighter immigration policy. As a result, we expect the labor market to remain characterized by slower hiring but limited layoffs, with job growth averaging 50,000 to 100,000 per month in 2026 and the unemployment rate holding near 4.5%.
   
• Price check ahead – Friday’s release of the March Consumer Price Index (CPI) will provide the first indication of how the recent energy shock is affecting consumer prices. Economists expect headline CPI to rise 3.1% year-over-year, up from 2.4% in February. The increase in energy prices is likely the primary driver, as WTI crude oil averaged roughly $90 per barrel in March, compared with $64 per barrel in February, pointing to meaningful upside pressure on the energy component of the index. Core CPI, which excludes food and energy, is also expected to firm, with consensus estimates calling for a 2.7% annual increase, up from 2.5% in the prior month. From the Federal Reserve’s perspective, we believe these upside inflation risks support a wait-and-see approach to any additional interest-rate cuts. Consistent with that view, futures markets are pricing in the Fed remaining on hold throughout 2026. That said, our base case remains that the Fed’s easing cycle, while potentially delayed, is still intact, with the Fed ultimately delivering one to two additional rate cuts over the course of this cycle.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.}