U.S. equity markets posted gains of +0.5%/+2.1% last week, highlighted by the Dow Jones reaching a new record close at 50,579 points, while the S&P 500 had its eighth consecutive weekly gain. The first quarter earnings season was notably robust, with 81% of companies beating estimates and 27% profit growth compared to the prior year. NVIDIA's results stood out, with an 85% year-over-year revenue increase, demonstrating that investments in AI infrastructure remain strong.
In the fixed income market, Treasury yields experienced high volatility, with the 10-year rate reaching 4.69%, the highest in nearly a year, before stabilizing around 4.50%, while the 30-year bond traded at 5.18%, the highest level in 20 years. Given the potential shock to inflation from energy prices, the market repriced monetary policy expectations in a more hawkish direction, now anticipating potential tightening of around 35 bps in 2027.
Attention remains focused on geopolitical uncertainty involving the conflict with Iran and control of the Strait of Hormuz. Brent crude oil oscillated between $100 and $112 per barrel, driving both the energy sector's performance and inflation concerns. For the upcoming week, the focus will be on new economic data, including U.S. Q1 2026 GDP, as well as Fed members' speeches and developments in the Middle East.
