Equities Closed Higher in Volatile Week

A late-week rally helped push stocks higher to close a turbulent week on a favorable note. Last week began with stocks mixed as investors tried to gauge President Trump’s on-again, off-again tariff policy. Ten-year Treasury yields jumped nearly 20 basis points to 4.20% last Monday, rebounding from the previous week’s six-month low. Stocks retreated last Tuesday following the administration’s threat of a 104% tariff on China, effective the following day. However, investors returned to risk after President Trump announced a 90-day pause on many of his new tariffs. The market enjoyed its best day in several years as the S&P 500 gained 9.5%, the Dow rose 7.9% and the Nasdaq climbed 12.2%. Wall Street reversed course on Thursday, cutting into most of the prior day’s gains. Investors re-focused their attention on the likelihood of a trade war with China. Typical of the volatile week, stocks rebounded to close out the week as optimism grew over a possible trade deal between the U.S. and China. Market sector performance was mixed, with information technology, communication services and consumer discretionary outperforming, while real estate, financials and energy lagged.

Inflation Slowed in March

Inflation trended lower in March, according to the latest Consumer Price Index, which fell 0.1% last month after increasing 0.2% in February. Over the last 12 months, the CPI rose 2.4% after increasing 2.8% for the 12 months ended in February. Prices for energy fell 2.4%, largely on the heels of a 6.3% decline in gasoline prices, which offset increases in prices for electricity and natural gas. Prices for food, on the other hand, rose 0.4% in March. Core prices, less food and energy, rose 0.1% last month following a 0.2% increase in February. Core prices rose 2.8% over the last 12 months, the smallest 12-month increase since the period ended March 2021.

Eye on the Week Ahead

The latest data on sales at the retail level is available this week. February saw retail sales tick up 0.2% for the month. Also out this week is the estimate of industrial production for March. Industrial production rose 0.7% in February, while manufacturing output increased 0.9%.