April Economic Update

Market Summary

March brought heightened volatility to financial markets as investors reacted to a combination of weaker labor data, persistent inflation concerns, and ongoing geopolitical tensions in the Middle East. Equity markets experienced uneven performance throughout the month, with early declines followed by partial recoveries as investors reassessed the path of monetary policy. For the month, the S&P 500 lost -5.13%, the Nasdaq 100 pulled back -5.01%, and the Russell 2000 retreated -6.01%. (1)

Iran War

Geopolitical tensions were the key driver of market sentiment during March. Ongoing instability in the Middle East continued to influence energy markets, keeping oil prices elevated and contributing to inflation concerns. The largest impact to the markets centers around the Strait of Hormuz and the almost complete halt to shipping traffic impacting commodities such as oil, natural gas, and fertilizer, raising concerns around inflation, consumer confidence, slowing economic growth, and the path moving forward that the Federal Reserve will take regarding interest rates.

As of the writing of this newsletter, Iran has a matter of hours before President Trump’s deadline for an agreement for a ceasefire and to reopen the Strait of Hormuz. As a threat to Iran, Trump is claiming that he will bomb Iran’s infrastructure if an agreement is not made by the deadline; a move that experts claim would be a war crime committed by the United States since it would directly be attacking the wellbeing of Iran’s citizens rather than targeting Iranian military assets. Given that, it is hard to believe that Trump will carry out these threats but we won’t know for certain until the deadline passes.

Economic News & Releases

Economic releases in March reinforced the narrative of a moderating - but not yet contracting - economy. The Consumer Price Index (CPI) increased 2.4% year-over-year in February, according to the U.S. Bureau of Labor Statistics. This, of course, does not factor in the recent gas price increase seen in March. Economic activity indicators were mixed. Retail sales rebounded modestly after January’s weakness, suggesting consumers remain engaged, though more selective in spending. Meanwhile, the ISM Manufacturing Index hovered near the neutral 50 level, signaling stabilization but limited expansion in the industrial sector. (2,3)

Looking Forward…

The next month will largely be dictated by what happens with the Iranian war, so we expect more short-term volatility. However, if a cease fire does occur, we could see a fast and furious rally. Only time will tell.

Annual Firm Disclosures

Each year as part of our annual regulatory requirements, we must deliver to each client an updated ADV Part 2A & 2B, also known as the Firm Brochure. Please find enclosed our Brochure which discloses, amongst other items, any material changes (Item 2). Also enclosed is a copy of our current Privacy Policy which we are also required to annually deliver. Please contact us if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account.

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Monthly Financial Tip:

Take time to review your asset allocation relative to your risk tolerance. Market movements can shift portfolio weightings over time, and periodic rebalancing helps ensure your investments remain aligned with your long-term financial goals.

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Citations:

1. Schwab Feb 27, 2026

2. Reuters April 1, 2026

3. Institute for Supply Management March 2, 2026

Disclaimers:

This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

March Economic Update

Market Summary

February brought another month of volatility within roughly the same trading ranges as investors balanced moderating inflation data with rising geopolitical risks and growing concerns about the labor market. Equity markets moved unevenly during the month, with technology stocks facing periodic selling pressure while energy shares rallied alongside rising oil prices. Markets were also influenced by a combination of economic releases and Federal Reserve commentary suggesting policy may remain restrictive for longer than previously expected. The S&P lost -0.86% for the month, the Nasdaq was hit the hardest losing -2.32 %, while the Russell 2000 actually posted a modest gain of 0.71%. (1)

Middle East Tensions

The biggest news worldwide to come out of February was the beginning of the Iran war. The biggest risks for the markets will likely be longer term and mainly focuses on inflation. Oil prices have risen more than 30% since the war began. This dramatically raises the cost of shipping meaning the rise in the price of oil impacts virtually all shipped goods across the world. These prices are generally pushed onto the consumer. Another factor is shipping restrictions within the region being altered. Of course, the main underlying factor will be how long the war continues, which is unclear at the moment.

Economic News & Releases

Inflation data released during February showed modest improvement but continued to indicate that price pressures remain above the Federal Reserve’s long-term target. The January Consumer Price Index rose slightly less than economists expected, suggesting progress on inflation, though underlying price pressures in services remain persistent. At the same time, market participants continued to focus on the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, which remains elevated relative to the Fed’s 2% target. (2)

Business activity data also provided mixed signals. While certain sectors continued to show resilience, economists noted that employment growth has slowed considerably compared with the decade preceding the pandemic, suggesting the economy may be entering a slower expansion phase. (3)

Labor Market

One of the bigger headlines for the markets occurred last Friday. The most recent labor data showed Nonfarm payrolls decreased 92,000 in February with almost all areas of employment declining and the unemployment rate rose to 4.4%, marking one of the largest monthly employment declines since the pandemic. Economists noted broader weakness in several sectors including information services, transportation, and construction. While a single month of data does not establish a trend, the report highlighted the delicate balance policymakers face as they attempt to slow inflation without significantly weakening the labor market. (4)

Looking Forward…

Overall, February reflected a market environment still searching for direction as investors weighed slowing economic momentum against the possibility of monetary policy easing later in the year. We continue to believe this market will be headline-driven with intraday and overnight volatility remaining high into this spring.

Citations:

1. Schwab Feb 27, 2026

2. Reuters Feb 13, 2026

3. Reuters Feb 09, 2026

4. Reuters Mar 06, 2026

Disclaimers:

This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

February Economic Update

Market Summary

January saw U.S. equities rebound modestly despite bouts of volatility tied to economic data delays, policy expectations, and geopolitical headlines. Markets were choppy mid-month after tariff-related headlines triggered selling in technology stocks, but sentiment recovered late as rate expectations stabilized. On a full-month basis, the S&P 500 gained 1.34%, the Nasdaq 1.19%, and the Russell 200 5.36%. Investors rotated away from mega-cap tech and toward cyclicals, energy, and materials. (1)

Economic Releases & Data

December’s Consumer Price Index — released in mid-January — showed inflation moderating modestly but still elevated relative to the Fed’s 2% objective. Core CPI edged lower than forecasts, easing some pressure on markets but underscoring persistent stickiness in services and shelter costs. (2)

Other sentiment indicators offered mixed signals. Business activity surveys showed the overall private sector continuing to expand modestly, even as new orders growth slowed marginally and export demand softened. Consumer spending softened following a strong holiday season, with real retail sales showing a modest pullback as households appeared more selective in discretionary purchases. At the same time, consumer expectations around inflation and job prospects shifted lower in Federal Reserve regional surveys, suggesting that inflation expectations may be becoming more anchored even as consumer confidence remained well below historical averages.

Finally, housing data remained mixed. Mortgage rates drifted slightly lower during the month, providing marginal relief for affordability, yet existing home sales stayed subdued and new construction activity showed limited momentum. Home prices continued to rise modestly in many regions, keeping housing inflation elevated even as broader price pressures cooled. Housing remains a key variable for both inflation and growth in 2026, and a clearer recovery may depend on further easing in financial conditions.

Federal Reserve Announcement

In late January, the Federal Reserve held interest rates unchanged at 3.50–3.75%, reflecting a “data-dependent” stance as inflation slowly moderates and labor dynamics evolve. Policymakers signaled that future cuts are possible but not imminent, emphasizing uncertainty and the need for clearer inflation progress. (3)

Fed officials underscored that achieving a sustained decline in inflation remains the priority, but that the timing and magnitude of any additional easing will depend heavily on incoming data — especially jobs and CPI figures slated for release in February.

Looking Forward…

Investors enter February weighing mixed signals: Inflation data and postponed jobs figures will heavily influence expectations for the Fed’s next move, while tariff policy and geopolitical developments continue to shape risk sentiment. Although the broad-based US indices have been trading mostly sideways lately, volatility with both moves up and down has increased on an intraday and overnight-basis. Headline risk is ever persistent as earnings, geopolitical, and tariff news swing the markets rapidly. We expect more of the same for February with some key technical levels and indicators being tested at the moment.

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Monthly Financial Tip:

Consider consolidating old retirement accounts when it makes sense. Rolling former employer plans into a single IRA can simplify management, improve investment oversight, and reduce the risk of losing track of accounts over time.

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Citations:

1. Schwab, Jan 30, 2026

2. Investopedia, Feb 09, 2026

3. Federal Reserve Jan 28, 2026

Disclaimers:

This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.