Last week, US equities staged a sharp rebound, with the S&P 500, Nasdaq, and Dow Jones all closing 3–5% higher — marking a second consecutive week of gains and bringing the S&P 500 to within 2% of its all-time high. The primary catalyst was the two-week ceasefire between the US and Iran, which eased fears of a broader conflict in the Middle East. Strong March employment data and better than expected manufacturing sector data further reinforced bullish sentiment.
Fixed income markets were stable, with the 10-year Treasury yield tightening 3 basis points to around 4.32%, as investors weighed the inflation implications of volatile energy prices. High-yield credit spreads also tightened, reflecting improved risk appetite and a recovery in corporate credit following March's volatility. Meanwhile, gold and silver saw initial spikes on conflict fears before stabilizing alongside retreating oil prices, while crypto-linked assets advanced as overall investor sentiment improved — with Bitcoin posting a +5.5% gain on the week.
Despite last week's optimism, several risks remain on the radar. Over the weekend, ceasefire talks appeared to break down, with renewed threats of a Strait of Hormuz blockade sending equity futures 1% lower. Meanwhile, the Q1 2026 earnings season is kicking off with high expectations of roughly 15% profit growth for the S&P 500, with initial focus on the banking sector.
