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Good Morning!
Before we jump in, a quick reminder that we have new stock alerts coming next week. Keep an eye on your inbox.
Now let’s break down what actually moved markets this past week and what to watch next.
Market Recap
The biggest story this week was the continued surge in oil prices driven by the Middle East conflict.
Oil spiked sharply, with U.S. crude jumping over 11% in a single session and trading above $110 per barrel during the week.
This is one of the fastest moves in years and has become the primary driver of market volatility.
That surge is feeding directly into inflation concerns. Gasoline prices have already moved above $4 per gallon, and markets are now expecting higher inflation readings in the near term.
As a result, expectations for Federal Reserve rate cuts have been pushed further out, since higher inflation reduces the urgency for the Fed to ease policy.
Stocks struggled under this pressure.
Markets have been dealing with multiple weeks of weakness, and this week continued that trend as rising oil and inflation fears weighed on sentiment. Investors are increasingly concerned about a potential “stagflation” setup, where growth slows while prices rise.
Volatility remained high throughout the week, with markets reacting quickly to every new headline tied to the conflict.
The labor market was another major focus late in the week.
The March jobs report came in stronger than expected, with about 178,000 jobs added and unemployment falling to around 4.3%.
That shows the economy is still holding up, but it also makes things more complicated for the Fed. A strong labor market gives policymakers less reason to cut rates, especially with inflation risks rising.
At the same time, wage growth remained relatively modest and the labor force shrank, pointing to some underlying softness beneath the headline numbers.
It’s also important to note this was a shortened trading week.
U.S. stock markets were closed Friday for Good Friday, which reduced trading volume and can amplify earlier moves in the week.
Overall, the market is being driven by a clear chain reaction:
geopolitics → higher oil → inflation fears → delayed rate cuts → pressure on stocks.
What’s Coming Next Week
Next week will be critical as markets look for direction.
First, inflation data (CPI) will be the biggest catalyst.
Markets expect a noticeable increase, partly driven by the recent surge in oil prices.
If inflation comes in hot, it could push rate cut expectations even further out.
Second, earnings season begins. Early reports will give insight into how companies are handling higher costs and economic uncertainty. Analysts are still expecting solid earnings growth overall, which could help stabilize sentiment if results come in strong.
Third, bond yields will remain a key driver. Rising yields have been closely tied to inflation expectations. If yields continue moving higher, stocks could remain under pressure. If they stabilize, markets may attempt a rebound.
Finally, investors will continue watching developments in the Middle East.
This remains the single biggest variable. Any escalation or de escalation could quickly move oil prices and shift overall market direction.
As we head into next week, the market is being driven by one dominant force: oil and inflation.
Until that stabilizes, expect continued volatility across stocks, bonds, and commodities.
We will continue monitoring these developments closely and keep you updated with new opportunities as they emerge.
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See you soon!
SmallCapStocks Team
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