Markets Slide as Uncertainty Persists; Bonds Follow
Good morning,
The Dow (-2.1%), NASDAQ (-2.1%), S&P 500 (-1.9%), and EAFE [int'l] (-2.1%) all fell for the week. Taxable bonds also declined 0.5%, and tax-free municipal bonds fell 0.5%. The 10-year Treasury gained 0.09%, finishing the week at 4.39%.
The conflict in the Middle East continues to be a primary source of market volatility, with increasing concerns that it may last longer than initially anticipated. An extended conflict in the region could lead to higher inflation, driven by rising energy prices.
The Producer Price Index (PPI) for February was released on Wednesday, showing wholesale prices rising 3.4% year-over-year, the highest reading since February 2025. This came in well above expectations and has increased concerns about a potential Fed rate hike down the road if elevated inflation persists.
Also on Wednesday, the Federal Reserve met and decided to keep interest rates steady. In his accompanying statement, Chairman Powell indicated that he believes the recent rise in inflation is temporary, driven in part by tariffs and the conflict in the Middle East. A Dot Plot was also released following the meeting, projecting one rate cut in 2026.
Uncertainty continues to drive the markets, with both the Middle East conflict and future inflation concerns weighing on sentiment. With that being said, many believe the conflict will be short-lived, and that inflation will ease over time.
Have a great day and terrific week!
Source: Yahoo Finance
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
