Last week delivered a classic “growth with inflation pressure” backdrop for markets. The Federal Reserve kept policy rates unchanged, as expected, while U.S. Q1 GDP held near trend, durable goods improved, consumer sentiment stabilized, and manufacturing remained resilient.

U.S. equity markets paused last week following a strong April rally, with most major indices finishing flat and the S&P 500 still up nearly 12% from its late-March lows.

Markets extended their rally for a third consecutive week, driven largely by a rapid de-escalation in Middle East tensions and a sharp reversal in energy prices.

U.S. equities extended their rally for a second straight week as investors responded favorably to the two-week U.S.-Iran ceasefire and the sharp pullback in crude prices. The S&P 500 gained 3.6%, the Nasdaq Composite surged 4.7%, and the Russell 2000 advanced 4.0%, underscoring a broad risk-on move across the market.

Global markets closed the week reflecting a growing tension between resilient economic activity and rising geopolitical and inflation risks.

Markets faced a volatile week as inflation concerns and geopolitical risks took center stage, pressuring both equities and fixed income. The Federal Reserve held rates steady as expected, but stronger-than-anticipated producer price data reinforced concerns that inflation may remain sticky, particularly as energy prices surge.

Geopolitics, energy, and data converged to deliver a turbulent week for markets, reminding investors that risk is rarely linear.

Volatility returned to global markets last week as a mix of geopolitical tension, inflation surprises, and shifting policy signals kept investors on edge.

Economic data last week painted a mixed picture. ISM manufacturing moved back into expansion, services held steady, and consumer sentiment improved slightly, even as weaker job openings and claims data suggested labor market cooling. The delayed January employment report, paused by a brief government shutdown, will soon offer additional clarity.