Weekly Market Insights

Stocks fell for a third straight week, as Fed Chair Jerome Powell’s mixed but upbeat message could not offset the anxiety caused by the Middle East conflict.

Stocks Retreat

Markets began the week rattled by further escalation in the Middle East over the weekend. A bit of good news punctuated an otherwise sour Monday, as a stronger-than-expected retail sales report showed consumers were spending despite rising inflation.^1,2

On Tuesday, remarks from Fed Chair Jerome Powell indicated a shift in thinking—from being confident to not-so-confident about interest rate cuts in 2024. He said rates might need to stay higher until the Fed meets their 2% inflation target.^3,4

On Friday, the markets saw further declines, but investors were somewhat reassured by the perception that Thursday’s retaliatory actions in the Middle East were restricted in scope.⁵

Footnotes and Sources

1. ^{The Wall Street Journal, April 19, 2024}
2. ^{CNBC.com, April 15, 2024}
3. ^{The Wall Street Journal, April 16, 2024}
4. ^{CNBC.com, April 16, 2024}
5. ^{CNBC.com, April 19, 2024}

On Wednesday, the March Consumer Price Index (CPI) report rattled markets, revealing that inflation accelerated slightly more than expected. Bond yields rose, and stocks retreated in response, as investors feared the news could influence the Fed’s rate decision. The 10-year Treasury yield had its highest intraday jump in three years.^1,2,3

Markets rallied Thursday as investors were encouraged by the Producer Price Index (PPI) report, which measures inflation at the producer level. Unlike CPI, PPI rose less than expected, which sparked a tech-focused rally. Markets opened lower on Friday as investors wrestled with the conflicting inflation reports.

Fears of an escalating Middle East conflict also weighed on stocks during the week. Concerns about a potential weekend event led some investors to end the week in a risk-off position.⁴

Footnotes and Sources

1. ^{The Wall Street Journal, April 12, 2024}
2. ^{CNBC.com, April 10, 2024}
3. ^{The Wall Street Journal, April 11, 2024}
4. ^{CNBC.com, April 12, 2024}

Stocks dropped last week as investors focused on “what’s next” for interest rates after mixed comments from multiple Fed officials.

Fed Officials Weigh In                                      

Stocks struggled out of the gate again last week, ending Monday and Tuesday in the red on concerns that recent economic data could derail the Fed’s plan for short-term rates.

The markets recovered Wednesday through Thursday morning when weekly jobless claims were better than expected. But stocks fell broadly Thursday afternoon following mixed comments from multiple Fed officials. All three averages ended the day down more than 1 percent for the first time in a month.^1,2

On Friday, a strong jobs report gave investors much-needed confidence. The U.S. economy created 303,000 jobs in March—higher than economists’ expectations—while unemployment dropped slightly to 3.8 percent. Markets rallied after the news, but not enough to recoup all weekly losses.³

Footnotes And Sources

1. ^{The Wall Street Journal, April 5, 2024}
2. ^{The Wall Street Journal, April 4, 2024}
3. ^{The Wall Street Journal, April 5, 2024}