A Fragile Truce

U.S. equity markets extended their rebound this week as investors welcomed tentative progress toward de-escalation in the Middle East following several days of dramatic threats of significant escalation. The fragile pause in hostilities temporarily eased fears of a prolonged disruption to global energy supplies and fueled a sharp retreat in oil prices after a surge to four-year highs. Markets also found support from lukewarm inflation data and signs that the U.S. labor market continues to demonstrate resilience despite elevated energy costs and geopolitical uncertainty.