U.S. stocks moved lower this week, with the S&P 500 falling 1.6%, the Dow Jones Industrial Average declining 1.9%, and the Nasdaq Composite slipping 1.2%. Ongoing conflict in the Middle East and the resulting volatility in oil markets weighed on overall investor sentiment. There were also renewed concerns about potential stress in private credit markets. However, at this point, those worries do not appear tied to economic conditions or any broad-based breakdown in private credit. Economic data released during the week pointed to slower growth while inflation remains sticky. Treasury yields also moved higher, with the yield on the U.S. 10-Year Treasury Note rising from 4.13% to 4.28%. Concerns about higher near-term inflation and the possibility of increased government spending tied to a potential Iran conflict pushed expectations for rate cuts further out, with markets now pricing in just one possible cut that may not come until the September or October timeframe.

U.S. & Global Economy

• Economic data last week painted a somewhat mixed picture. Inflation readings were mostly in line with expectations, with the February core (excluding food and energy) consumer price index rising 0.2% for the month and 2.5% year over year, while headline CPI increased 0.3% for the month and 2.4% annually. The Bureau of Economic Analysis also reported that the Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) index, rose 0.4% in January, pushing the annual rate up to 3.1%, its highest level since early 2024 and a reminder that inflation remains a bit sticky. Growth data came in softer than expected, with the second estimate of fourth-quarter U.S. Gross Domestic Product revised down to a 0.7% annualized pace from the initial 1.4%, reflecting weaker exports, consumer spending, government spending, and investment. Housing data was a bit more encouraging, with existing home sales rising 1.7% in February according to the National Association of Realtors, and housing starts increasing 7.2% month over month. Affordability has continued to improve gradually. The labor market remains relatively stable, with weekly jobless claims holding at low levels, offering some reassurance despite recent noise and concerns about the longer-term impact of AI.

Policy and Politics

• The ongoing U.S.-Israeli conflict with Iran dominated headlines last week and added to uncertainty in global markets. Energy prices rose as tensions disrupted shipping through the Strait of Hormuz, a key route for global oil supplies, pushing oil above $100 per barrel and raising concerns about potential supply shocks. Economists warn that if energy prices stay elevated for a while, it could slow growth while keeping inflation high, particularly in parts of Europe and Asia. At the same time, the International Energy Agency announced plans for a large release of oil from emergency reserves to help ease supply pressures. On the trade front, the Trump Administration also launched new trade investigations into several major economies as it looks to reshape tariff policy. For now, markets are dealing with a mix of geopolitical tension, energy market volatility, and trade uncertainty, which is likely to keep investors cautious in the near term.

The week ahead could be an important one for markets, with several key events on the calendar. The focus will be on the Federal Reserve’s upcoming decision on Wednesday. Policymakers are widely expected to hold interest rates steady, but investors will be watching the updated “dot plot” for clues about the outlook for rates in 2026. Markets will also be looking at new economic data, including U.S. Retail Sales and the Producer Price Index, for signals on consumer strength and whether inflation pressures may be easing. On the corporate side, attention will be given to the tech sector during the NVIDIA GTC Conference and to Micron Technology earnings for signs that demand tied to artificial intelligence remains strong. Earnings results from Accenture, FedEx, and Carnival Cruise Line should also provide a broader read on business spending, global shipping activity, and consumer travel demand. While periods like this can feel uncertain, history shows that markets often recover quickly once some of that uncertainty clears, which is why staying diversified and focused on long-term goals is especially important during times like these. Your team at Valley National Financial Advisors is here to help you navigate these developments and answer any questions you may have.

Economic Numbers to Watch This Week

• U.S. Empire State Manufacturing Survey for March 2026, prior 7.1
• U.S. Pending Home Sales for February 2026, prior -0.8%
• U.S. Retail Sales for February 2026, prior 0.2%
• U.S. Producer Price Index (PPI) for February 2026, prior 0.5%
• U.S. Core Producer Price Index (Core PPI) for February 2026, prior 0.3%
• U.S. Factory Orders for January 2026, prior -0.7%
• U.S. FOMC Interest Rate Decision for March 18, 2026
• U.S. Initial Jobless Claims for week ending March 14, 2026, prior 213,000
• U.S. Philadelphia Fed Manufacturing Survey for March 2026, prior 16.3
• U.S. New Home Sales for January 2026, prior 745,000

Please review Important Disclosure Information set forth in the last section of this web site.