Weekly Market Commentary March 30th to April 3rd
Despite a shortened holiday week, news came at investors faster than a rabbit late for an Easter brunch. The week brought a full slate of economic updates and headline breaking news, including employment data, insights into consumer health from confidence surveys and Retail Sales, and the latest read on manufacturing activity.
Employment data delivered a largely encouraging message, highlighted by a strong March Employment Report. Payrolls increased by 178,000, exceeding expectations, while the Unemployment Rate edged lower to 4.3%, underscoring continued labor market resilience. Health care drove much of the strength, adding 76,000 jobs and has been a notable area of strength over the past year while financial services was one of the few private sector areas to see modest job losses.
The ADP Employment Report showed that private employers added 62,000 jobs in March, signaling selective hiring activity. Job gains were concentrated in health care and education, underscoring their role as consistent drivers of labor market growth. By contrast, the weakest signal came from the Bureau of Labor Statistics’ Job Openings report, which showed openings declined in February to 6.9 million from 7.2 million, pointing to a gradual easing in labor demand.
Manufacturing activity expanded for a third straight month in March, rising to 52.7 and beating expectations, though manufacturing employment continued to contract. Meanwhile, U.S. Retail Sales rebounded in February, up 0.6% for the month and above estimates, signaling renewed consumer momentum, though the data largely predates late February energy price pressures, which may weigh on spending in coming months.
Throughout the week, markets contended with a steady stream of headline risk from the war in Iran, swinging between speculation about diplomatic progress and the prospect of continued military strikes. Ultimately, the economic implications most relevant to our analysis remain the impact of rising oil prices on consumers and inflation. WTI crude has surged roughly 70% year to date to $112 per barrel, reaching its highest level since June 2022, when Russia’s invasion of Ukraine triggered a similar price shock.
U.S. stock indexes finished the volatile, holiday shortened week higher amid tentative signs of a deescalating conflict in the Middle East. The S&P 500 rose 3.4%, the Dow Jones gained 3.0%, and the Nasdaq rebounded 4.4%, snapping the S&P 500’s five week losing streak. Bond markets reflected the improving risk tone, with the 10 Year U.S. Treasury yield falling 8 basis points to 4.35%.
Next week’s important economic releases include Durable Goods, Personal Consumption Expenditures (PCE) and the Consumer Price Index (CPI).
