Tech Rally Lifts Markets Despite Rising Geopolitical and Fiscal Uncertainty

The U.S. stock market was closed last week on Good Friday. Wall Street enjoyed a tech-led rally despite the escalation of the conflict with Iran and a pivot in fiscal policy following President Trump’s request that Congress approve a $1.5 trillion total defense budget for 2026, funded, in part, by a 22.6% cut in domestic discretionary programs. Each of the major benchmark indexes posted solid gains last week on a better-than-expected jobs report and a surge in AI and tech shares. Among the market sectors, Information Technology and Communication Services stood out, while energy fell despite high crude oil prices. Gold continued its historic run as a hedge against Middle East instability and potential stagflation.

March Jobs Report Surprises to the Upside Despite Mixed Labor Signals

Employment grew by 178,000 in March, far exceeding expectations and well above the February estimate, which saw a decrease of 133,000 (revised). The unemployment rate dipped 0.1 percentage point to 4.3%. While the March figure was positive, it was offset somewhat by a downward revision of 7,000 for January and February combined. In March, the total number of unemployed declined by 332,000 to 7.2 million. The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.8 million in March but was up by 322,000 over the year. The long-term unemployed accounted for 25.4% of all unemployed people in March.

Eye on the Week Ahead

Three potentially market-moving reports will be released this week. The final estimate of gross domestic product for the fourth quarter is available. The previous estimate showed the economy expanded by 0.7%. Also out this week is the report on Personal Income and Outlays, which includes the Personal Consumption Expenditures Price Index (PCE Price Index) for March. February saw prices rise 0.3%, while core prices increased 0.4%. Along with the PCE Price Index, is the release of the Consumer Price Index (CPI) for March. The CPI rose 0.3% in February and 2.4% for the year.