Category Archives: Market Outlook

Friday’s announcement that Iran had reopened the Strait of Hormuz delivered one of the most dramatic single-day moves in recent memory. The S&P 500 surged to a new all-time high of 7,126, oil plunged, and virtually every asset class participated — equities, credit, commodities, and international markets all closed sharply higher on the week. Then, by Saturday morning, Iran reversed course, re-closed the strait, and fired on vessels attempting to transit. Markets head into Monday holding gains built on a single day’s headlines that may already be obsolete.

Q1 earnings season opened on a constructive note, with major financial institutions beating reduced expectations — though Netflix dropped nearly 10% on disappointing Q2 guidance. Small-cap and value equities continued to lead on a year-to-date basis, while gold extended its position as the top-performing asset class at +12.5% YTD. With a ceasefire set to expire within days and negotiations in Islamabad unresolved, the durability of this week’s gains is the question that matters most.

The week markets had been bracing for finally arrived. March CPI — the first inflation reading to fully capture the energy shock that began February 28 — landed Thursday morning at 3.2% year-over-year, above the prior month’s 2.4% and at the high end of consensus. Combined with last week’s strong +178,000 payrolls print, it leaves the Federal Reserve with no near-term exit: inflation is re-accelerating, the labor market is resilient, and oil is still near 5. The first rate cut is not arriving in June.

Equity markets absorbed the CPI print with more composure than expected. The real action was in fixed income — the 2-year Treasury yield moved sharply higher as the market repriced the first cut deeper into 2026. The Strait of Hormuz remains the single most important variable for everything that follows.

Markets had a quiet but broadly positive four-day week heading into the holiday. The S&P 500 gained +1.65%, global equities did even better, and Gold surged +7.18% — its best week in recent memory. High-yield bonds rallied +1.21%, a sign that credit spreads tightened and risk appetite returned, at least for a few days. Bonds were up across the board. For a week that could have been ugly, it simply wasn’t.

Then Friday morning arrived — markets closed for Good Friday — and the Bureau of Labor Statistics released the March payrolls report on schedule: +178,000 jobs, a strong rebound from February’s revised –133,000 and a significant beat above the Street’s ~+55K consensus. Unemployment edged down to 4.3%. Markets respond Monday.

Oil went from $67 to nearly $100 a barrel in under thirty days. That single price movement — set in motion by the launch of Operation Epic Fury on February 28 — defined the quarter. The S&P 500 fell 4.3%, its worst start to a year since 2022. The Nasdaq fell 7.1%. The Magnificent Seven shed 13%.

But the headline numbers obscure the more important story: diversification worked. Small Cap Value gained 5.0%. International developed markets fell only 1.2%. Gold rose 8.6%. Core bonds returned exactly 0.0% while equities fell. The portfolios that felt worst were the ones most concentrated in what had worked for three straight years.