MARKET COMMENTARY
Last week’s momentary optimism following Trump’s announcement to pause attacks on Iran was short-lived, leading to another week of declines across the S&P 500, along with the NASDAQ hitting its worst week since Liberation Day. Likewise, 3-month crude oil futures remain elevated and at their highest level since the conflict began, indicating a market pricing in an extended period of high oil prices. While headlines continue swinging back and forth, swaying sentiment, hope that the war with Iran would be resolved quickly is deteriorating.
We’ll have a busy week ahead, with economic data providing insight into the manufacturing industry and how it is navigating the impacts of the war. As we continue creeping further into a stagflationary environment, the ISM manufacturing index should paint a clearer picture of business sentiment, as well as where prices and expected growth are headed. Then on Friday, we’ll receive U.S. unemployment data, which will further illustrate the state and direction of the economy. Since May of last year, job data has been steadily choppy, with increases and decreases in payrolls alternating each month. After February numbers reflected a steep decline, forecasters expect an increase of 50,000 nonfarm payroll jobs for March. While this may be an improvement compared to last month, the unemployment rate is still expected to tick up to 4.5%. That said, the slowdown in GDP growth we’ve seen, combined with inflation pressures caused by oil disruptions and a lack of improvement in unemployment, means stagflation will likely remain a concern.
The first quarter of 2026 has been rocky, with few sectors experiencing any gains. As more investors move to a risk-off stance, active managers equity exposure continues sinking toward levels last seen about a year ago. With market breadth worsening, it’s becoming harder to find areas of the market to deploy capital, as well as areas to preserve it, leaving the market sitting in oversold territory with declining relative strength. Despite intense selling pressure across the market, it’s difficult to determine whether this drought will continue or if it is a good time to buy the dip ahead of a rebound.
Economic Releases This Week
Monday: None
Tuesday: Job Openings
Wednesday: U.S. Retail Sales, ISM Manufacturing
Thursday: Initial Jobless Claims
Friday: US Unemployment Report
Stories to Start the Week
Trump appears to relax oil blockade on Cuba as Russian tanker arrives
Eli Lilly reaches $2.75 billion deal with Insilico to bring AI-developed drugs to the global market
Powell says Fed can look past oil shock, but warns patience has limits
Trump weighs military operation to extract Iran’s uranium
NASA is just days away from historic Artemis II moon launch
Disclousure:
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