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- The S&P 500 reached a new high last week after a rapid rebound, with historical patterns and solid fundamentals pointing to continued market strength.
- Early bank earnings beat expectations and pointed to broad-based profit growth, supporting a balanced outlook for markets.
- Softer producer price data last week suggested easing inflation pressures and supported expectations for a cautious but steady Fed policy path.
1. Stocks Break Records as Momentum Rebuilds
Equity markets moved back into record territory last Wednesday, with the S&P 500 Index closing above 7,000 for the first time.1 The rally fully erased the roughly 9% decline that followed the escalation of the conflict in Iran, with the index returning to new highs from its late-March low in just 16 days.1 The rebound was supported by a ceasefire agreement and improving expectations for the resumption of oil shipments through the Strait of Hormuz, both of which helped stabilize investor sentiment.2
Historically, when the market quickly recovers and reaches new highs after a drawdown of at least 8%, the pattern going forward is typically positive.1 During these periods, the S&P 500 has returned an average of 5.5% over the six months following a new all-time high.1 While past performance does not ensure similar outcomes, the current environment of steady economic activity and resilient earnings growth supports the case for continued growth through the remainder of the year.
2. Strong Bank Results Set the Tone for Earnings Season
Earnings season began last week with early results from Bank of America and Morgan Stanley, both of which reported first-quarter earnings above expectations.2 The reports provided an encouraging first look at corporate performance. Commentary from Bank of America highlighted steady client activity, resilient consumer spending, and stable asset quality, all of which indicate that the economy remains on solid footing.3
Across the broader market, based on current projections, earnings for S&P 500 companies are expected to grow about 12.5% from a year earlier.1 Growth is anticipated to be led once again by the technology sector, with additional contributions from materials and financials. Importantly, the strength is expected to extend beyond a narrow group of companies, with most sectors projected to deliver year-over-year earnings gains.
This broader earnings participation supports the case for more even market performance and reinforces the importance of maintaining diversified portfolios as the year progresses.
3. Producer Prices Show Signs of Cooling
Producer price data released last week came in below expectations, offering a measure of relief on the inflation front. Headline producer prices rose 0.5% in March, well under the anticipated 1.1% increase.4 Core producer prices, which exclude food and energy, edged up just 0.1%.4 Within that, core goods prices increased 0.2%, marking the slowest monthly pace in four months and suggesting that tariff-related cost pressures may be starting to ease.4 Services prices were unchanged after several firmer readings, pointing to a broader cooling trend across categories.
While a single report does not necessarily signify a lasting pattern, the combination of softer producer prices and contained consumer inflation indicated that upstream price pressures remained manageable. Market expectations continue to center on the Federal Reserve holding rates steady at its late-April meeting, with policymakers likely to remain cautious.2 If inflation stays controlled and external risks subside, there may be room for a rate cut in late 2026 or early 2027.
Oil Prices Decline as Shipping Routes Reopen
Oil prices moved lower last week after Iran signaled that the Strait of Hormuz had reopened to commercial traffic, easing immediate concerns about global energy supply disruptions.2 The announcement followed the start of a ceasefire between Israel and Lebanon, which appeared to hold through its first day. The agreement marked a pause after several weeks of conflict involving Israeli forces and Hezbollah, helping to stabilize sentiment across energy markets.2
Iranian officials indicated that the reopening of the shipping lane would remain in place for the duration of the ceasefire, supporting expectations for a near-term increase in oil flows. At the same time, broader negotiations remained uncertain.2 Iran signaled that it would seek a more permanent resolution to regional tensions, while discussions involving the United States and regional actors were expected to continue.2
Although risks have not fully dissipated, the combination of improving geopolitical conditions and restored access to a critical trade route contributed to a pullback in oil prices and reduced immediate inflationary pressure tied to energy markets.
For the period ending 4/17/26.
* Small-cap stocks are represented by the Russell 2000® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.
Sources
1 FactSet
2 Bloomberg
3 Bank of America
4 U.S. Bureau of Labor Statistics
Disclosures
Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein.
Cary Street Partners and its affiliates are broker-dealers and registered investment advisers and do not provide tax or legal advice; no one should act upon any tax or legal information contained herein without consulting a tax professional or an attorney.
We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
A Composite PMI is a single index that tracks economic activity by combining the performance of both the manufacturing and services sectors, providing a comprehensive overview of overall business conditions.
Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment-related services. It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable.
The Consumer Price Index (CPI) measures the monthly change in prices paid by U.S. consumers. The Bureau of Labor Statistics (BLS) calculates the CPI as a weighted average of prices for a basket of goods and services representative of aggregate U.S. consumer spending. The CPI is a measure of inflation and deflation. The CPI report uses a different survey methodology, price samples, and index weights than the producer price index (PPI).
Additional Disclosures: International and Foreign Securities, Fixed Income Investments, the Consumer Price Index, the Producer Price Index.
Comparative Index Descriptions: The Standard & Poor’s (S&P) 500 Index, The Russell 2000® Index, The NASDAQ Composite Index, The MSCI EAFE Index, Dow Jones Industrial Average® (Dow Jones or DJIA), The Bloomberg Barclays US Aggregate Bond Index (US Agg Bond), The CBOE Volatility Index (VIX). CSP2026001_16
