A look back
- Stocks plunged last week as the conflict in the Persian Gulf raged on with the S&P 500 falling 1.9%, which was its fourth straight weekly decline. International developed markets fell 2.1% and emerging markets ended 0.4% lower.
- U.S. Treasury yields rose across the curve as the curve flattened, reflecting expectations for fewer Federal Reserve (Fed) rate cuts ahead. The 2-year U.S. Treasury yield rose 0.16% to 3.89%, while the 10-year rose 0.11% to 4.38%.
- As widely expected, the Fed held rates steady at its rate-setting meeting while deferring judgment on policy implications of the Iran conflict. It did, however, lift near-term growth and inflation projections.
A look ahead
- In a relatively quiet week for U.S. economic data releases, the focus for markets will continue to be squarely on the Middle East tensions as the situation remains fluid.
- Investors will also pay close attention to various Fed official’s speaking engagements for clues on the likely policy response to price increases in products affected by the closure of the Strait of Hormuz waterway – a major shipping lane for many energy, chemical, and agricultural products.
- Economic releases: March S&P Manufacturing and Services PMIs, Final Q4 Productivity, University of Michigan Final March Consumer Sentiment
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