Stocks posted their second straight weekly gain as an Iran ceasefire lifted sentiment
U.S. stocks closed out the week on a mixed note Today as investors weighed a fragile two-week ceasefire between the United States and Iran against a March inflation report that confirmed energy costs have already begun reshaping the economic outlook.
The S&P 500 slipped 0.12% to close at 6,816.89. The Dow Jones Industrial Average fell 269 points, or 0.56%, finishing at 47,916.57. The Nasdaq Composite bucked the trend and gained 0.35%, closing at 22,902.89, supported by strength in semiconductor stocks.
The single-day dip did little to undercut what was otherwise a strong week for S&P 500. The S&P 500 rose roughly 3.6% over the five-day period, the Nasdaq surged more than 4%, and the Dow added about 3%. All three indexes posted their best weekly performances since November. The Dow also crossed back into positive territory for the year on Thursday, while the S&P 500 and Nasdaq remain off less than 1% year to date.
Inflation hit hard in March
Today’s consumer price index report confirmed what energy markets had already been signaling for weeks. Headline inflation rose 0.9% in March and 3.3% on an annual basis, the largest monthly increase since 2022 and the highest annual reading since April 2024. Energy costs drove the surge, climbing 10.9% as the U.S.-Iran conflict sent gasoline prices sharply higher.
Core inflation, which strips out food and energy, told a quieter story. Prices rose just 0.2% for the month and 2.6% year over year, both slightly below expectations, suggesting that underlying inflation pressure remains relatively contained for now.
The more unsettling number came from a University of Michigan consumer survey released the same day. Consumers expect inflation to reach 4.8% over the next year, a full percentage point higher than they anticipated in March. Inflation had been running near 3% before the Iran conflict began roughly six weeks ago.
Tim Holland, chief investment officer at Orion, said the Federal Reserve will likely look past the March and April data as long as there is a credible path toward de-escalation in the Middle East. He added that the situation becomes considerably more concerning for the economy if West Texas Intermediate crude is still trading near $100 a barrel by early to mid-June. At that point, he described the combination of already depressed consumer sentiment and rapidly rising inflation expectations as a difficult position for both the economy and the Fed.
Oil fell but the strait remains uncertain
Oil prices swung through the session before settling lower. WTI crude futures declined to $96.57 a barrel and Brent crude fell to $95.20. Traffic through the Strait of Hormuz, the critical chokepoint for global energy supply, remains thin despite the ceasefire agreement. President Trump publicly pressured Iran to lift its blockade of the strait and accused Iranian leadership of attempting short-term extortion of global markets through its control of international waterways. Iran has not signaled any immediate intention to comply.
Investors are now watching closely for results from weekend talks between U.S. and Iranian representatives, looking for any indication the two-week truce could lead to a longer and more durable arrangement. The outcome of those talks is expected to shape how markets open next week.
Today’s individual movers
Nvidia rose 2.62% to close at $188.73, and Broadcom gained 4.69% to settle at $371.57, giving the Nasdaq its foothold in positive territory. Amazon added 2.02% to finish at $238.38. On the losing side, Verizon dropped 3.64%, Salesforce fell 3.45% to a three-year low and Nike slid 3.14% to a five-year low. Fair Isaac fell 13.99% to a 52-week low of $922.37, and ServiceNow dropped 7.59% to a three-year low of $83.00.
Super Micro Computer led the S&P 500 with an 8.79% gain. On the Nasdaq, a handful of small-cap names posted dramatic moves driven by volume rather than news.
The CBOE Volatility Index closed at 19.23, down 1.33% on the day and at its lowest level in a month, suggesting that despite the geopolitical uncertainty, near-term fear in the options market has eased.
The week ahead
First quarter earnings season begins in earnest next week, with major money center banks and the two largest investment banks reporting. Oil price direction will also remain central to how investors read the inflation picture going forward. From Monday’s open to Friday’s close this week, oil fell roughly 10%, a meaningful tailwind for stocks that helped power the weekly rally. Whether the S&P 500 trend continues depends heavily on what emerges from this weekend’s ceasefire talks.