Markets Rally Sharply as Oil Prices Fall and Investor Confidence Rebounds

Stocks surged last week with the easing of geopolitical tensions that had weighed on equities for weeks. The S&P 500 crossed the 7,000 point barrier, while the NASDAQ achieved its longest winning streak (12 straight sessions) since 1992. Investor optimism was fueled by the ceasefire announced last week and the reopening of the Strait of Hormuz. Large-cap stocks enjoyed a strong performance. Along with the S&P 500 reaching a record high last week, the Dow jumped more than 800 points on Friday alone. Demand for AI and tech shares was also reignited following a period of investor trepidation. Among the market sectors, Information Technology climbed nearly 8.5%, followed by Consumer Discretionary and Communication Services. Utilities, Energy and Consumer Staples lagged. Crude oil prices fell nearly $13.00 per barrel, or more than 13.0%, by the end of last week, hitting a five-week low. Gold and silver prices remained stable but saw some profit taking as investors rotated back to equities.

Rising Energy Costs Drive Increase in March Producer Prices

Prices at the producer level rose 0.5% in March following increases of 0.5% and 0.6% in February and January, respectively. Producer prices rose 4.0% for the 12 months ended in March, the largest 12-month advance since February 2023. A 1.6% increase in prices for goods accounted for the overall gain in producer prices in March. Prices for services were unchanged last month. Nearly half of the March advance in prices for goods was attributable to a 15.7% rise in gasoline prices. Producer prices less food and energy rose 0.1% last month and 3.8% for the year.

Eye on the Week Ahead

There’s very little in the way of economic data released this week. The most noteworthy report available is the retail sales report for March. Retail sales jumped 0.6% in February and may be in line for a reduction in sales in the March report.