Stocks Extend Rally on Cooling Inflation and Renewed Tech Strength

Stocks continued to rally for the most part last week, fueled by cautious investor optimism that U.S. involvement in the Middle East may be nearing an end. In addition, cooler inflation data along with the start of what is hoped to be a resilient earnings season also contributed to the rally. A resurgence in mega-cap tech shares helped push the NASDAQ to a 10-day winning streak, its longest in several years. The S&P 500 finished just shy of its January record high. The Dow and the Global Dow each ticked lower, while the small caps of the Russell 2000 edged higher. Information Technology, Energy and Consumer Staples led the market sectors, while Health Care and Financials lagged. Gold and silver prices slipped, as oil prices and the dollar gained strength.

Consumer Spending Accelerates as Retail Sales Rise Sharply

Retail sales rose 1.7% in March from the previous month. Since March 2025, retail sales increased 4.0%. Retail trade sales were up 1.9% from February 2026 and 4.2% from last year. Nonstore (online) retail sales were up 10.1% from last year, while sales at food services and drinking places rose 2.4% from March 2025.

Eye on the Week Ahead

The first estimate of gross domestic product for the first quarter of 2026 is available this week. GDP advanced a mere 0.5% in the fourth quarter. The report on Personal Income and Outlays is also out this week. Within that report is the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred measure of inflation. According to the last report, inflation rose 0.4% in February and 2.8% for the year.