📊 Weekly Market Recap
S&P 500 return Year-to-date were approximately -4.95%
S&P 500 3 month return were approximately -5.4%
S&P 500 return over the past 5 days were approximately -1.5%
This Week in the Markets – 3 Things to Know
The Big Three Controlling the Market: Oil, Inflation & Interest Rates– Right now, the market is being driven by a powerful chain reaction starting with oil. The surge in energy prices has brought inflation back into focus, forcing central banks to rethink their next moves. Just weeks ago, investors were confident rate cuts were coming, but now those expectations are quickly fading. Higher inflation means higher-for-longer interest rates, which puts pressure on stocks, especially our much- loved high-growth names. It also increases borrowing costs, slowing both business expansion and consumer spending. In simple terms, the market is reacting to one core cycle by the three most powerful movers in the market right now. There’s a lot of uncertainty right now, and investors are looking for real data to confirm where things are heading.
The Electric Surge- In a market where most sectors are struggling, energy is clearly standing out as the winner. Rising oil and gas prices are directly boosting profits for energy companies, attracting strong investor interest. At the same time, broader markets are pulling back as investors shift toward more defensive and cash-flow-focused positions. This creates a clear divide, with energy stocks pushing higher while most other sectors lag. For now, energy is acting as one of the few safe havens in an otherwise uncertain market. (Check the Sector Snapshot chart we include at the end of this email; Energy is the one in all green.)
When it Ends, What It Means- When the conflict winds down, the economic outcome really comes down to timing and damage already done. If energy prices fall quickly, that would ease inflation and give central banks room to cut rates, creating a strong setup for equities to rebound and potentially push toward new highs. But if high oil prices have already slowed growth too much, the lag effect could still tip the economy into a mild recession even after tensions ease. Markets could rally first on relief, then reassess based on actual economic data like jobs and earnings. In other words, you could see a short-term surge followed by a more fundamental reality check. So the end of the war isn’t a guaranteed outcome. It opens the door to both a recovery rally or a delayed economic slowdown, depending on how much damage was truly done.
The Economy at a Crossroads: Stability or Slowdown?
The Fed is still the main force driving the market, and right now the message is simple: no rush to cut rates. Inflation hasn’t cooled enough for policymakers to pivot, so rates are likely staying higher for longer. That’s keeping pressure on valuations and making markets more sensitive to every new data release. You’re seeing constant repricing based on expectations, not just fundamentals. Until inflation clearly trends down, the Fed isn’t stepping in to support markets. Even though rates have started to come down slightly from their peak, the decline has been gradual, signaling that policy is easing very slowly rather than shifting aggressively. This tells markets the Fed is still in control and not ready to fully support risk assets yet.
At the same time, the consumer is holding up, which is a big reason the economy hasn’t slowed more. Spending is still solid, supported by jobs and wages, but it’s definitely becoming more selective. Higher rates are starting to bite, especially in areas like housing and big purchases. This isn’t a collapse in demand, but more of a gradual cooling. If the consumer weakens meaningfully, that’s when the broader market starts to feel it. Credit usage is also rising, which suggests consumers are starting to lean more on borrowing. That becomes more important in a higher-rate environment, where debt is more expensive and harder to sustain.
If inflation improves and the Fed can ease later this year, markets have room to move higher. If not, and rates stay elevated while growth slows, you could see more pressure on equities. Right now, it’s a data-driven market with both upside and downside still very much in play. The gradual decline in rates suggests the Fed is trying to ease without losing control of inflation, which keeps both scenarios possible. The next phase of the market will depend on whether that balance holds or breaks.
S&P 500 SECTOR SNAPSHOT – Past Week
