Morning Market Brief

The past week saw the S&P 500 and Russell 2000 claw back almost all correction losses, fueled by speculation around a cease‑fire negotiation that never materialized. President Trump’s brief endorsement of Iran’s ten‑point framework sparked a short‑lived rally, but the U.S. Navy’s decision to limit traffic through the Strait of Hormuz pushed WTI crude back above $104 per barrel, adding volatility to equity markets. Analysts now view the surge as a temporary bounce rather than a sustainable trend, suggesting that the recent seven‑day streak of gains may be overstated.

Inflation data is the next market catalyst. March’s consumer‑price index jumped 3.3%, erasing most of the modest 3.5% wage growth and leaving real income growth at a meager 0.2% year‑over‑year, or roughly 0.4% when accounting for higher hours worked. An upcoming producer‑price index release is expected to echo the CPI’s “ugly” numbers, raising concerns that higher input costs could force companies to trim guidance. While tax refunds and recent cuts provide a short‑term cushion for disposable income, the longer‑term outlook points to shrinking consumer spending if negative real income trends persist.

Looking ahead, earnings season offers a potential support beam, especially from big banks reporting strong Q1 results. However, investors remain wary of guidance that may reflect rising costs. The analyst predicts the S&P 500 will likely surrender about half of its recent rally, testing the 6,600 level—Tuesday’s opening gap. Maintaining a cash cushion and preparing for a modest pullback could help navigate the thin line between a slow‑growth recovery and a broader market correction.