Weekly review

The stock market entered the second quarter with turbulent price movements, following a robust beginning to the year. Ultimately, major indices saw moderate declines, with the Dow Jones Industrial Average and Russell 2000 both experiencing drops of over 2.0%, while the S&P 500 and Nasdaq Composite fell by 1.0% and 0.8% respectively.

The downward trend was attributed to a sharp rise in market rates prompted by positive economic data and persistent inflation indicators. The 10-year note yield surged by 12 basis points to 4.33%, accompanied by a 10 basis points increase in the 2-year note yield to 4.72%.

Recent economic reports, including the February Personal Spending and Income report, revealed persistent inflation pressures through the PCE Price Indexes. While data such as the March ISM Manufacturing Index and the March employment report indicated continued economic strength, there were signs of softening in the March ISM Non-Manufacturing PMI and weekly jobless claims report.

Market sentiment regarding rate cuts shifted following this week's data and comments from Federal Reserve officials, notably Minneapolis Fed President Kashkari, who suggested the possibility of no rate cuts this year if inflation progress stalls. The likelihood of a rate cut in June decreased to 52.4% from 60.4% a week earlier.

Heightened geopolitical tensions in the Middle East, particularly concerns about potential retaliation by Iran against Israel, also contributed to the week's negative sentiment, alongside consolidation efforts after the market's strong performance earlier in the year.

The majority of sectors experienced declines, with nine of the 11 S&P 500 sectors ending lower. The health care sector saw the most significant drop of 3.1%, driven by the CMS decision to maintain its proposed payment rate increase for Medicare Advantage plans unchanged at 3.70%, contrary to expectations. Real estate and consumer staples sectors also showed notable weakness.

Conversely, the energy and communication services sectors stood out with gains at the end of the week, rising by 3.9% and 2.5% respectively.

On Monday, the stock market exhibited predominantly negative sentiment, marking the first trading day of the new quarter following a strong performance earlier in the year. This sentiment was reflected in the ratio of declining issues surpassing advancing ones by approximately 2-to-1 at both the NYSE and Nasdaq. While the Russell 2000 experienced a 1.0% decline, the S&P 500 and Dow Jones Industrial Average fell by 0.2% and 0.6% respectively. In contrast, the Nasdaq Composite managed to secure a marginal 0.1% gain, attributed to the performance of certain mega-cap stocks and strength in the semiconductor sector, with the PHLX Semiconductor Index (SOX) rising by 1.2%. The downward pressure observed across the market was influenced by a notable increase in market rates, with Treasuries reacting to economic data that did not align with market expectations regarding potential rate cuts by the FOMC.

Tuesday saw further weakness in the stock market, with the S&P 500 (-0.7%), Dow Jones Industrial Average (-1.0%), and Russell 2000 (-1.8%) extending losses from the previous day. The Nasdaq Composite relinquished Monday's modest gain and recorded a 1.0% slide. While the major indices closed off their session lows, no specific catalyst drove the afternoon improvement. The day's selling was attributed to routine consolidation activity following the market's strong performance earlier in the year, alongside another rise in market rates as investors reconsidered expectations for rate cuts amidst solid economic data and persistent inflation figures. Notably, losses in health insurers were accentuated after the CMS maintained its proposed payment rate increase for Medicare Advantage plans, contrary to expectations for an upward revision. Retailers also faced challenges following disappointing quarterly results and outlook from PVH Corp (PVH), raising concerns about consumer spending activity. In terms of economic data for Tuesday, February Factory Orders exceeded expectations at 1.4% (consensus 1.0%), with a notable increase in new orders for durable and nondurable goods, indicating sustained demand levels. Additionally, February JOLT - Job Openings stood at 8.756 million, with a minor revision from the previous figure.

Wednesday's trading session saw a predominantly positive trajectory after a slow start, with buying activity intensifying at 10:00 ET following the release of a softer than anticipated ISM Services PMI for March. This positive momentum was bolstered by a buy-the-dip mentality following the week's initial weakness, which was primarily driven by the surge in market rates as investors adjusted their rate cut expectations amidst ongoing robust economic data and persistent inflation figures. Additionally, Treasuries responded positively to Wednesday morning's softer data, further contributing to the upward trend. Some strength in the semiconductor sector also lent support to the positive sentiment. In terms of economic data for Wednesday, the Weekly MBA Mortgage Applications Index showed a marginal decline of 0.6%, while March ADP Employment Change exceeded expectations at 184K (consensus 150K). The March S&P Global US Services PMI - Final figure came in at 51.7, signaling a slight slowdown from the previous reading. Furthermore, the March ISM Non-Manufacturing PMI recorded a lower-than-expected figure of 51.4% (consensus 52.6%), indicating a deceleration in the expansion of the services sector, corroborated by a slowdown in the growth of prices and new orders.

Thursday began with a rally in the stock market but ended with significant losses. Some attributed the afternoon downturn to comments from Minneapolis Fed President Kashkari, suggesting that the Fed might refrain from rate cuts if inflation progress stalls. Others pointed to heightened geopolitical tensions in the Middle East, particularly concerns about potential retaliation by Iran against Israel, as the primary driver of the sell-off. This concern also led to afternoon gains in oil prices and defense-related stocks. WTI crude oil futures rose by 1.3% to $86.57/bbl, with Lockheed Martin (LMT) and RTX (RTX) standing out as winners from the defense sector. Overall, there was a lingering sentiment among some market participants that stocks were overdue for a significant pullback after their impressive performance earlier in the year, contributing to the afternoon retreat. Regarding economic data for Thursday, initial jobless claims for the week ending March 30 increased slightly to 221,000 (consensus 214,000), while continuing jobless claims decreased to 1.791 million. Additionally, the trade deficit in February widened to $68.9 billion (consensus -$66.0 billion), driven by increases in both exports and imports, reflecting a pickup in global trade. Weekly EIA Natural Gas Inventories showed a draw of 37 bcf, compared to a draw of 36 bcf the previous week.

Friday saw the stock market concluding the week on a positive trajectory, buoyed by a buy-the-dip mentality following a tumultuous start to the second quarter. This optimistic sentiment was further fueled by the release of the March employment report on Friday morning, indicating ongoing robustness in the labor market. The report's highlights included a substantial increase in nonfarm payrolls by 303,000, a decrease in the unemployment rate to 3.8%, a 0.3% rise in average hourly earnings, and an increase in the average workweek to 34.4 hours. These positive indicators suggest a favorable outlook for corporate earnings and future prospects. While gains were widespread across various sectors, the performance of mega-cap stocks and semiconductor stocks notably influenced index movements. Overall, the report supported a positive earnings growth outlook, although it did not necessarily align with expectations for imminent rate cuts by the Federal Reserve.

In the week ending, the TSX edged up by 0.4%, marking a year-to-date (YTD) increase of 6.2%. Conversely, the Dow Jones Industrial Average saw a decline of 2.3%, with a YTD increase of 3.2%. The S&P 500 Index and NASDAQ also experienced slight decreases of 1.0% and 0.8% respectively, yet maintained YTD increases of 9.1% and 8.2% respectively. MSCI EAFE saw a YTD increase of 4.9%. Treasury yields for both the 10-year Treasury and the 10-year GoC experienced modest upticks of 0.2% and 0.1% respectively, with YTD increases of 0.5% each. Oil prices surged by 4.3%, marking a significant YTD increase of 21.0%. Bonds saw a decrease of 1.3%, resulting in a YTD decrease of 1.2%. Conversely, Canada Investment Grade Bonds experienced a decrease of 0.7%, leading to a YTD decrease of 2.0%. Additionally, the Canadian/USD Exchange rate fell by 0.5%, with a YTD decrease of 3.1%.

Previous update:

This week saw little movement in major indices, except for the Russell 2000, which surged by 2.5%, extending its recent streak of outperformance. Despite solid gains last week, there was neither a significant push to buy nor a rush to sell this week. The S&P 500 reached another record high close on Thursday, marking the end of the first quarter, contributing to subdued activity as many stocks hover around or near all-time highs. Although bond and equity markets were closed on Friday for Good Friday, economic data including the February Personal Income and Spending report and various trade and inventory figures were released. Weakness in mega-cap and semiconductor sectors limited index-level movements, with some consolidation observed in these areas after significant gains earlier in the year. The Vanguard Mega Cap Growth ETF declined by 0.8%, and the PHLX Semiconductor Index fell by 0.1% amid news that China would not permit AMD and Intel chips in government computers. Conversely, the equal-weighted S&P 500 rose by 1.6% this week, with utilities, real estate, and energy sectors leading the gains. In corporate developments, Boeing announced CEO Dave Calhoun's intention to step down at the end of 2024.

Monday marked a subdued start to the week for the stock market, following the previous week's upward trend. A late-afternoon downturn without any specific catalyst left the S&P 500 near its lowest point of the day, down by 0.3%. While some normal consolidation was evident, the downside movements remained relatively modest. Weakness in certain mega-cap and semiconductor stocks further influenced the negative sentiment, particularly due to news that China would not permit the use of chips from AMD and Intel in government computers. Additionally, Boeing announced CEO Dave Calhoun's intention to step down at the end of 2024. Rising Treasury yields added to the headwinds facing stocks. Economic data for Monday included February New Home Sales, which showed a largely unchanged level of sales compared to January, alongside a decrease in the median selling price, offering potential benefits for prospective buyers.

Tuesday saw major indices closing near session lows, moving away from recent record highs. Despite starting the day with gains, selling pressure intensified in the late afternoon, with the S&P 500 closing just above the 5,200 level, down 0.3% from Monday. The downturn coincided with losses in mega-cap names and chipmakers, contributing to the overall negative tone. However, the downside movements remained moderate, indicative of normal consolidation after recent gains. Economic data for Tuesday included an above-consensus Durable Orders report for February and a slightly weaker than expected Consumer Confidence Index for March, which showed little change from the revised February reading. The Durable Orders report highlighted a rebound in business spending after a decline in January, particularly in nondefense capital goods orders, which increased by 4.4%.

Wednesday's trading session leaned towards positivity, with advancers outnumbering decliners by a significant margin at both the NYSE and Nasdaq. This upbeat sentiment stemmed from a continued willingness to buy on weakness following Tuesday's downturn. Although early gains were tempered by consolidation in heavily-weighted stocks, many shares rallied towards the end of the day, propelling major indices sharply higher, with the S&P 500 reaching a fresh all-time high. Economic data for Wednesday included a slight decline in the Weekly MBA Mortgage Applications Index, with both purchase and refinance applications falling. Meanwhile, Weekly EIA Crude Oil Inventories showed a build of 3.17 million barrels, contrasting with the prior week's draw.

Thursday's market activity was mixed, with the S&P 500 and Dow Jones Industrial Average posting slight gains while the Nasdaq Composite edged lower. The Russell 2000 continued its recent outperformance, gaining 0.5%. Despite a late rally around 3:00 ET, which lacked specific news catalysts, indices retreated from their highs by the close. With light participation ahead of the holiday weekend, market movements remained muted. Notably, losses in some heavily-weighted names dampened overall index performance, with the Vanguard Mega Cap Growth ETF closing lower. Economic data for Thursday included Weekly Initial Claims, which came in slightly below expectations, reinforcing the belief in favorable employment conditions. Additionally, Q4 GDP figures showed stronger-than-expected growth and a lower GDP deflator, while March Chicago PMI and University of Michigan Consumer Sentiment readings indicated improved sentiment despite inflation concerns. February Pending Home Sales saw a 1.6% increase, falling short of consensus expectations.

At the close of the week, the Dow Jones Industrial Average stood at 39,807, reflecting a 0.8% increase for the week and a year-to-date growth of 5.6%. Similarly, the S&P 500 Index closed at 5,254, marking a 0.4% weekly gain and a year-to-date rise of 10.2%. In contrast, the NASDAQ ended the week at 16,379, experiencing a slight decline of 0.3% for the week while showing a year-to-date increase of 9.1%. The MSCI EAFE recorded a modest 0.2% weekly rise, with a year-to-date growth of 5.3%. The 10-year Treasury Yield remained stable at 4.20%, with no change for the week and a slight increase of 0.3% year-to-date. Oil prices saw a notable increase, reaching $83.00 per barrel, reflecting a weekly surge of 2.9% and a year-to-date growth of 15.8%. Bonds closed at $97.93, registering a marginal 0.1% weekly increase but showing a year-to-date decrease of -0.6%. In Canada, the TSX concluded the week at 22,167, with a weekly gain of 0.8% and a year-to-date growth of 5.8%. Canadian Investment Grade Bonds experienced a 0.2% weekly rise but showed a year-to-date decline of -1.4%. The 10-year GoC Yield remained unchanged at 3.47%, with a 0.4% year-to-date increase. The Canadian/USD Exchange stood at $0.74, representing a weekly rise of 0.5%, although showing a year-to-date decrease of -2.6%.

Previous update:

This week saw robust performance in the stock market, propelling all three major indices to new record highs. Notably, the S&P 500 closed above 5,200 for the first time, marking a 2.3% increase for the week. Similarly, the Nasdaq Composite surged by 2.9%, while the Dow Jones Industrial Average experienced a gain of 2.0%. The driving force behind these gains was primarily the Federal Open Market Committee (FOMC) policy announcement. Although the committee maintained the fed funds rate within the expected range of 5.25-5.50%, it was the updated Summary of Economic Projections (SEP), particularly the dot plot, that garnered attention. Despite recent inflation data surpassing expectations, the dot plot still indicates the likelihood of three rate cuts this year. Federal Reserve Chair Powell's remarks during the press conference, where he reiterated the need for further evidence of inflation reaching the 2% target before considering rate cuts, did not dissuade investors. Expectations for rate cuts in June rose significantly, reaching 75.4% according to the CME FedWatch Tool, up from 58.8% the previous week. Additionally, the movement in Treasury yields, with the 2-year note declining by 12 basis points and the 10-year note falling by eight basis points, further buoyed market sentiment. Mega cap stocks, particularly reflected in the Vanguard Mega Cap Growth ETF (MGK), had a notable impact on index gains. Despite some sectoral variations, including a decline in real estate, sectors like communication services, industrials, information technology, and consumer discretionary witnessed significant gains.

Monday saw a cautious market atmosphere, understandable given the pending Bank of Japan policy decision and the imminent release of the Fed's dot plot later in the week. Investor focus leaned towards mega-cap stocks, with the Vanguard Mega-Cap Growth ETF (MGK) closing up by 0.9%. However, banks faced pressure following a downgrade of New York Community Bank (NYCB) by Raymond James Financial, causing the SPDR S&P Regional Banking ETF (KRE) to fall by 0.7%. On a positive note, the consumer staples sector performed well, boosted by PepsiCo's (PEP) upgrade to Overweight from Equal Weight at Morgan Stanley. Economic data for Monday revealed the March NAHB Housing Market Index surpassing expectations at 51 compared to February's 48.

Tuesday started with a downward trend in the stock market, which reversed later in the day, largely influenced by NVIDIA (NVDA). The company's stock initially dropped by 3.9% in response to the introduction of the Blackwell AI platform at its GTC Conference but later rebounded, aiding the broader market's recovery. The S&P 500 reached a new record high, supported by short-covering activities and the fear of missing out on potential gains. Despite strong housing starts and building permits reports for February and the Bank of Japan's policy adjustments, Treasury yields fell. The yen depreciated against the dollar as traders noted the BOJ's commitment to maintaining an accommodative stance despite policy changes. Economic data for Tuesday showed housing starts increasing by 10.7% month-over-month and building permits rising by 1.9% month-over-month, indicating a rebound in housing activity after January's weather-related slowdown.

Wednesday marked another strong finish for the stock market, propelling major indices to new record highs. The S&P 500 closed above 5,200 for the first time, the Dow Jones Industrial Average surged by 400 points, and the Nasdaq Composite gained 1.3%. Investors reacted positively to the FOMC policy announcement, which maintained the fed funds rate within the expected range and reiterated the anticipation of three rate cuts despite higher-than-expected inflation. Fed Chair Powell's press conference, where he emphasized the need for further evidence before rate cuts and hinted at slowing asset runoff, didn't deter buying activity. Nearly all sectors participated in the afternoon rally.

Thursday continued the market's momentum, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average reaching fresh all-time highs, while the Russell 2000 outperformed with a 1.1% gain. However, declines in Apple shares following an antitrust lawsuit and a sharp drop in Accenture's earnings limited gains in the information technology sector. Strength in semiconductor stocks, driven by positive earnings and guidance from Micron and an upgrade for Broadcom, provided some support. Economic data for Thursday included weekly initial claims, which showed no significant weakening in the labor market, encouraging the Fed's hawkish stance. Additionally, reports on the current account balance, manufacturing and services PMI, existing home sales, leading economic index, Philadelphia Fed index, and natural gas inventories were released. Notably, existing home sales approached peak levels despite increased mortgage rates, indicating resilience in the housing market.

Friday concluded the week with a mixed performance in the stock market. While the Nasdaq Composite reached a new all-time high, rising by 0.2% with support from mega-cap stocks, the S&P 500 and Dow Jones Industrial Average closed with losses of 0.1% and 0.8% respectively. Notably, shares of lululemon athletica (LULU) and NIKE (NKE) experienced significant declines, attributing to their disappointing guidance, making them the poorest performers in the S&P 500. Tesla (TSLA) also struggled after announcing reduced production at its China plant due to slowing electric vehicle sales, as reported by Bloomberg. On a positive note, FedEx (FDX) emerged as the top performer in the S&P 500, surpassing expectations with its earnings report and announcing a new $5 billion share repurchase program. No significant U.S. economic data was released on

The Dow Jones Industrial Average closed the week at 39,476, marking a 2.0% increase for the week and a year-to-date (YTD) gain of 4.7%. Similarly, the S&P 500 Index ended the week at 5,234, reflecting a weekly gain of 2.3% and a YTD increase of 9.7%. The NASDAQ closed at 16,429, rising by 2.9% for the week with a YTD gain of 9.4%. The MSCI EAFE closed at 2,356, showing a weekly increase of 1.3% and a YTD growth of 5.4%. The 10-year Treasury yield was at 4.20%, experiencing a slight decrease of 0.1% for the week while showing a YTD increase of 0.3%. Oil prices settled at $80.82 per barrel, marking a 0.3% decline for the week but showing a substantial YTD increase of 12.8%. Bonds were at $97.81, showing a 0.7% increase for the week but a YTD decrease of -1.2%. The TSX closed at 21,986, reflecting a weekly gain of 0.6% and a YTD increase of 4.9%. Canada Investment Grade Bonds showed a 0.2% increase for the week but a YTD decrease of -2.0%. The 10-year Government of Canada (GoC) yield was at 3.44%, experiencing a slight decrease of 0.1% for the week and a YTD increase of 0.3%. Finally, the Canadian/USD Exchange rate stood at $0.74, marking a 0.5% decrease for the week and a YTD decrease of -3.0%.

Previous update:

This week saw the major stock indices experiencing modest declines in their values. The Dow Jones Industrial Average remained stable compared to the previous week, while the S&P 500 saw a slight decrease of 0.1%, and the Nasdaq Composite faced a loss of 0.7%. In contrast, the Russell 2000 exhibited weaker performance, dropping by 2.1%.

Concerns over inflation persisted as both the Consumer Price Index (CPI) and Producer Price Index (PPI) for February surpassed expectations, indicating lingering price pressures. Despite these worrisome signals, the stock market reacted with relative composure. In fact, the S&P 500 even achieved a new record high on Tuesday following the release of the hot CPI reading. Investors seemed unfazed by this report, attributing the increase largely to factors like the index for shelter, which is anticipated to diminish in the coming months.

Market sentiment was also influenced by anticipation surrounding the Federal Reserve's policy decision scheduled for Wednesday, with investors hoping for clarity on how these inflation reports might influence the Fed's stance. Conversely, the Treasury market witnessed more pronounced movements in response to the data, with the 10-year note yield rising by 21 basis points to 4.30%, and the 2-year note yield increasing by 23 basis points to 4.72%.

Additional data points included a February retail sales report, which although slightly weaker than expected, still demonstrated positive growth compared to the previous month. Jobless claims data further underscored the strength of the labor market.

Amidst this backdrop, some market participants expressed a growing belief that stocks were overdue for a correction. Reflecting this sentiment, the Invesco S&P 500 Equal Weight ETF (RSP) experienced a decline of 0.7% over the week.

Within the S&P 500, six of the eleven sectors recorded declines, with the real estate sector being the poorest performer, dropping by 3.1%. The consumer discretionary sector followed suit with a decline of 1.2%. Conversely, the energy sector witnessed the most significant increase, jumping by 3.7%, while the materials sector registered a gain of 1.5%.

On Monday, the stock market had a lackluster beginning to the week, following declines related to consolidation on Friday. Market sentiment appeared indecisive ahead of Tuesday's release of the February Consumer Price Index (CPI). The Dow Jones Industrial Average and the equal-weighted S&P 500 managed to achieve slight gains of 0.1%, whereas the market-cap weighted S&P 500 experienced a minor decline of 0.1%, and the Nasdaq Composite fell by 0.4%. While market breadth was negative at the Nasdaq, the disparity was modest, with decliners aligning with advancers at the NYSE. Continued selling pressure in certain mega-cap and semiconductor-related stocks acted as a restraining factor for the market. Notably, Boeing (BA) faced losses due to news concerning a criminal investigation by the Justice Department into a door plug issue, as reported by The Wall Street Journal. No significant US economic data was reported on Monday.

Tuesday marked a more robust performance for the stock market. Both the Nasdaq Composite and the Dow Jones Industrial Average surged by over 200 points, with gains of 1.5% and 0.6%, respectively, while the S&P 500 reached a new record high with a 1.1% increase. The rise was propelled by strength in mega-cap and semiconductor sectors, with the PHLX Semiconductor Index (SOX) climbing 2.1%, and the Vanguard Mega Cap Growth ETF (MGK) advancing by 1.8%. The positive bias was partly attributed to the February Consumer Price Index (CPI), which, although slightly higher than expected, did not disrupt expectations for potential rate cuts, particularly considering the anticipation of a decrease in the shelter index in the coming months. The information technology sector notably led the gains, rising by 2.5%, driven by its mega-cap constituents and significant earnings-related gains in Oracle (ORCL), which emerged as the top performer in the S&P 500. Regarding economic data released on Tuesday, the February NFIB Small Business Optimism Index came in at 89.4, slightly lower than the previous month's figure. The CPI for February showed a 0.4% increase, in line with expectations, while the Core CPI also rose by 0.4%, slightly exceeding consensus forecasts. The Treasury Budget for February revealed a deficit of $296.3 billion, primarily due to outlays exceeding receipts, reflecting ongoing challenges related to higher interest rates and increased government borrowing to cover budget shortfalls.

Wednesday saw a mixed performance in the stock market, with the Dow Jones Industrial Average and Russell 2000 posting gains of 0.1% and 0.3%, respectively, while the S&P 500 and Nasdaq Composite experienced declines of 0.2% and 0.5%. In the afternoon, all major indices experienced a sudden drop without any clear catalyst, likely due to a sell program, resulting in a broad pullback across most sectors before stabilizing. Towards the end of the trading session, many stocks managed to recover some lost ground, with the Invesco S&P 500 Equal Weight ETF (RSP) ending the day with a 0.1% gain. Among the sectors that closed higher, the consumer staples sector recorded the smallest gain, influenced partly by an earnings-related decline in Dollar Tree (DLTR).

Thursday brought a downbeat mood to the stock market, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closing lower, although they recovered slightly from session lows in the final 30 minutes of trading. The Russell 2000 underperformed significantly, dropping by 2.0%. The focus shifted to the Treasury market, where yields approached their February highs, with the 2-year note yield rising by seven basis points to 4.69% and the 10-year note yield increasing by 11 basis points to 4.30%. This movement was largely in response to the February Producer Price Index report, which surpassed expectations. Additionally, other data, including a February retail sales report that fell slightly short of expectations but still showed improvement compared to the previous month, and initial and continuing jobless claims data indicating ongoing strength in the labor market, contributed to selling pressure. Despite growing concerns among some participants about a potential stock market pullback, downside moves remained relatively modest.

Friday marked the end of the quarterly options expiration day on a somber note for the stock market, with above-average trading volume at the NYSE. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all closed with losses of -0.5%, -0.6%, and -1.0%, respectively, although they managed to recover slightly from their lowest points of the day. The selling pressure observed was partly attributed to routine consolidation efforts, which resulted in declines across many stocks. The equal-weighted S&P 500 experienced a 0.2% drop, with 23 out of the 30 Dow components ending the day in negative territory. Despite these declines, the market displayed resilience against selling pressures, consistent with its behavior throughout 2024. Notably, sharp earnings-related declines in Jabil (JBL) and Adobe (ADBE) contributed to the underperformance of the information technology sector. Regarding economic data released on Friday, February's import and export prices showed mixed results, with import prices rising by 0.3% and export prices increasing by 0.8%. The March NY Fed Empire Manufacturing Index posted a significant decline, indicating pessimism in manufacturing conditions. However, February's industrial production showed a modest uptick of 0.1%, signaling improvement compared to the previous month. Additionally, the preliminary March University of Michigan Consumer Sentiment Index came in slightly lower than expected, indicating relatively stable sentiment levels in 2024, which remain between the lows of June 2022 and pre-pandemic highs.

The Dow Jones Industrial Average closed the week unchanged, with a year-to-date (YTD) increase of 2.7%. The S&P 500 Index experienced a slight decline of 0.1% for the week but showed a YTD growth of 7.3%. The NASDAQ saw a decrease of 0.7% over the week, while its YTD performance stood at 6.4%. The MSCI EAFE dropped by 1.0% during the week but maintained a YTD gain of 4.4%. The 10-year Treasury Yield rose to 4.31%, marking a 0.2% increase for the week and a 0.4% rise YTD. Oil prices surged by 3.9% to $81.02 per barrel, contributing to a YTD increase of 13.1%. Bonds fell by 1.2% to $97.10, resulting in a YTD decrease of -1.6%. The TSX index in Canada recorded a 0.5% increase for the week, with a YTD growth of 4.2%. Canadian Investment Grade Bonds saw a decline of 1.2% during the week and a YTD decrease of -2.1%. The 10-year GoC Yield rose by 0.2% to 3.54%, with a YTD increase of 0.4%. The Canadian/USD Exchange rate experienced a 0.6% decrease, leading to a YTD decline of -2.6%.

Previous update:

Throughout the past week, various significant events influenced market dynamics and price movements across indices. Earnings reports from major retailers such as Target and Costco, along with Broadcom, were key highlights. Additionally, attention was drawn to economic indicators like the ISM Non-Manufacturing Index for February and the Jobs Report released later in the week. Federal Reserve Chair Powell's testimony before Congress, emphasizing the Fed's cautious approach towards rate cuts, garnered attention but had a relatively muted impact compared to other events. Positive speculation arose regarding potential rate cuts by the European Central Bank, aligning with expectations for the Fed. Economic data throughout the week reinforced market sentiments regarding potential rate adjustments and signaled a trajectory towards a soft landing. Notably, while business activity and order growth improved according to the ISM Non-Manufacturing Index, the Employment Index indicated a contraction for the second time in three months. The Jobs Report revealed mixed figures, with nonfarm payrolls exceeding expectations but accompanied by a rise in the unemployment rate and smaller-than-anticipated wage growth. Market movements were also influenced by consolidation activities following a period of significant gains, particularly among mega-cap and semiconductor-related stocks, which experienced profit-taking. Sector-wise, tech stocks and mega caps underperformed, with consumer discretionary and information technology sectors seeing notable declines. Conversely, sectors such as utilities, materials, real estate, and energy recorded gains. Treasury yields reflected market sentiments, with declines observed across the board, indicating market digestion of economic data and implications of Fed Chair Powell's testimony on rate adjustments.

Monday saw a tepid start for stocks, with the S&P 500 experiencing minimal fluctuations, ending with a slight 0.1% decline amid a cautious atmosphere ahead of a busy week. While the S&P 500 and Nasdaq briefly rose above previous closing levels, they retreated following movements in mega-cap stocks like Meta Platforms, Amazon, and Microsoft, which initially climbed but eventually settled lower. Tesla faced a significant drop following reports of a 19% year-over-year decline in shipments from its China factory. Despite losses in heavyweight constituents, the broader market managed to hold steady, with the Invesco S&P 500 Equal Weight ETF posting a modest 0.2% gain. Market sentiment remained cautious awaiting earnings reports from major retailers and Broadcom, along with key economic data such as the February ISM Non-Manufacturing Index and the Jobs Report later in the week. Federal Reserve Chair Powell's upcoming testimony was anticipated to reinforce the Fed's stance on rate cuts, with no significant US economic data released on Monday.

Tuesday witnessed a downturn in the stock market, with major indices all dropping by over 1.0%, led by tech stocks. The decline, though more subdued in the first half, accelerated in afternoon trading as part of routine consolidation activity following recent highs. Stocks that had driven the market's upswing experienced heightened selling compared to the broader market. The Vanguard Mega Cap Growth ETF and the PHLX Semiconductor Index faced notable declines but maintained yearly gains. Meanwhile, the Invesco S&P 500 Equal Weight ETF saw a smaller drop, with a lesser year-to-date increase compared to the market-cap weighted S&P 500. Economic data for the day showed mixed results, with business activity and order growth improving in February, but the Employment Index indicating a contraction for the second time in three months, underscoring concerns about employment trends.

Wednesday witnessed a rebound in the stock market following Tuesday's downturn, with major indices posting gains ranging from 0.2% to 0.7%, although they pulled back from their highs in afternoon trading. This positive momentum was fueled by a 'buy-the-dip' mentality prevalent among investors since the beginning of the year. Additionally, renewed buying interest in growth stocks and the tech sector, propelled by strong earnings and outlook from cybersecurity software provider CrowdStrike, contributed to the upward movement. The rally was broad-based, with many stocks participating. Market participants also focused on the first day of Fed Chair Powell's semiannual monetary policy testimony before the House Financial Services Committee, where Powell hinted at the possibility of lowering the fed funds rate range later in the year. In other news, New York Community Bancorp saw a rally following an over $1 billion equity investment announcement, offsetting initial losses spurred by reports of capital raising efforts. Economic data for the day included mixed results, such as weekly MBA Mortgage Applications showing growth, while January Wholesale Inventories declined.

Thursday brought forth a notably positive sentiment in trading, as the S&P 500 and Nasdaq Composite surged to all-time highs, spurred by a broad-based advance. The momentum was partly carried over from Wednesday's rally, with additional support from strong performances in mega-cap and semiconductor-related stocks. The prospect of rate cuts, reiterated by Fed Chair Powell's remarks before the Senate Banking Committee, further buoyed market confidence. Economic data for the day largely supported a favorable outlook for the economy, contributing to the positive bias. Initial jobless claims remained steady, indicating a stable labor market, while Q4 productivity growth remained unchanged, reflecting a robust labor market. However, the widening of the January trade deficit raised some concerns despite signs of increased global trade activity. Additionally, weekly EIA Natural Gas Inventories showed a draw, reflecting ongoing fluctuations in energy markets.

Friday saw the stock market open with widespread buying activity, building on gains from Thursday, driven by continued strength in mega-cap stocks and relief stemming from the February employment report aligning with the narrative of a soft landing. However, this positive momentum was short-lived as major indices quickly reversed course, influenced by profit-taking in mega-cap names and weakness in the semiconductor sector. While the rest of the market fared better initially, many stocks ended the day lower as selling intensified in the afternoon. Despite concerns of an impending pullback with indices and individual stocks trading near all-time highs, selling remained relatively restrained, with the NYSE's advance-decline line staying positive. Economic data for the day included February Nonfarm Payrolls exceeding expectations, alongside revisions to prior data, supporting the narrative of a soft landing scenario conducive to positive earnings growth outlooks and validating the market's ascent to record highs.

The Dow Jones Industrial Average closed at 38,723, reflecting a decrease of 0.9% for the week but still showing a year-to-date increase of 2.7%. Similarly, the S&P 500 Index closed at 5,124, down 0.3% for the week while showing a 7.4% increase year-to-date. The TSX saw a 0.9% increase for the week, closing at 21,738, with a year-to-date increase of 3.7%. Conversely, the NASDAQ closed at 16,085, marking a 1.2% decrease for the week, but maintaining a 7.2% increase year-to-date. The MSCI EAFE closed at 2,345, reflecting a weekly increase of 1.8% and a year-to-date increase of 4.9%. Treasury yields saw a slight decrease, with the 10-year Treasury Yield closing at 4.80%, down 0.1% for the week, and showing a 0.2% increase year-to-date. Similarly, the 10-year GoC Yield closed at 3.33%, down 0.1% for the week, with a 0.2% increase year-to-date. Oil prices decreased by 2.7% to $77.84 per barrel for the week, but still showed an 8.6% increase year-to-date. Bonds closed at $98.27, up 0.8% for the week, but showing a decrease of 0.5% year-to-date. Canadian Investment Grade Bonds increased by 0.5% for the week but decreased by 1.0% year-to-date. The Canadian/USD Exchange closed at $0.74, marking a 0.7% increase for the week but showing a 2.0% decrease year-to-date.