Weekly Wrap Up March 31, 2026
Recapping Last Week
• U.S. Equities Sold Off:
• Nasdaq Composite fell over 3%; S&P 500 declined 2%.
• Russell 2000 outperformed, edging slightly higher.
• Geopolitical Tensions & Oil:
• Little progress toward ending the Iran war kept markets on edge.
• Crude oil initially plunged on de escalation hopes, then rebounded to finish the week higher.
• Sector Performance:
• Strong gains in Energy (+5%) and Basic Materials (+4%).
• Sharp declines in Technology (-4%) and Communication Services (-4.5%), pressured by legal rulings against Meta and Alphabet over social media addiction.
• Rates & Bonds:
• Rising energy prices fueled inflation concerns.
• 10 year Treasury yield hit an eight month high near 4.48%, up almost 50 bps this month.
• Weak demand at Treasury auctions added pressure to bond prices.
• Mortgage Rates:
• 30 year fixed mortgage rate rose for a third straight week to 6.43%.
• Market Volatility:
• Investor skepticism persisted despite a deadline extension on the Strait of Hormuz and reports of potential talks.
• VIX jumped back above 30.
• Federal Reserve & U.S. Data:
• Fed officials voiced growing concern over growth and inflation risks.
• PMI data showed business activity slowing to an 11 month low while input and output prices rose.
• Import prices jumped 0.5% MoM, the largest increase in nearly four years.
• Consumer sentiment fell to 53.3; one year inflation expectations rose to 3.8%.
• International Developments:
• UK and Eurozone private sector growth stalled as manufacturers raised prices rapidly.
• ECB President Lagarde warned of potential “forceful” action if inflation stays above target.
• Japan’s new core CPI measure showed 2.2% YoY inflation; BOJ minutes revealed a hawkish tilt.
• China–U.S. Trade:
• China launched multiple investigations into U.S. trade practices in response to earlier U.S. actions.
The Week Ahead
• Quarter-End Weakness:
• Q1 ends with the S&P 500 down roughly 7%, reflecting mounting investor unease.
• Key Market Drivers:
• Ongoing Iran conflict, disruption from artificial intelligence, and concerns around private credit markets have shaken confidence after three strong years of gains.
• Labor Market Focus:
• March non farm payrolls report due Friday (Good Friday, with U.S. markets closed).
• Expected rebound of +50,000 jobs after February’s surprise loss of 92,000.
• Earlier in the week: JOLTS job openings, Challenger job cuts, and ADP private payrolls.
• Federal Reserve Outlook:
• Rising energy prices have shifted Fed focus from employment to inflation.
• Fed funds futures now price no rate cuts in 2025 and imply a small chance of a rate hike.
• Other U.S. Economic Data:
• ISM manufacturing PMI, retail sales, and consumer confidence reports due.
• Europe & UK:
• Energy dependence on the Middle East raises risk of multiple rate hikes to combat inflation.
• Germany and Eurozone release February (pre-war) inflation data.
• Japan:
• Highly reliant on Middle Eastern energy imports.
• Tokyo-area CPI for March released Monday evening, offering an early inflation signal.
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