USA Stock market week ending 04/03/26 - Market has a rally - Will it last?

PositionTrader.Blog - Stock Market recap

Major Index Performance (Weekly)

• S&P 500: +3.4% (weekly) — rebounded strongly after early-week weakness

• Nasdaq: +4.4% (weekly) — led gains, driven by tech strength

• Dow Jones: Solid weekly gain (+3.0%) — lagged slightly vs. Nasdaq

• Russell 2000: (+3.3%) Outperformed late week; positive overall — small caps showed relative strength

Takeaways

• Despite a weak start, markets staged a powerful rebound, with Nasdaq leading and small caps gaining momentum late.

• The week was dominated by geopolitical risk and oil prices, creating a split market: energy & defensives up, consumer sectors down.

• Overall tone: risk-on recovery with macro overhang still elevated.

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Market Drivers Next Week (04/06/26 – 04/10/26)

• Mon, Apr 6 — March Jobs Report Reaction: Markets finally react to Friday’s jobs data (released on Good Friday when markets were closed), with economists expecting 57,000 jobs added in March — a recovery from the prior month’s loss of 92,000 — and unemployment holding at 4.4%.

• Mon, Apr 6 — U.S.-Iran Diplomatic Deadline: The single most watched event of the week. President Trump set April 6 as the deadline for Iran diplomacy — a de-escalation could quickly reverse oil prices and ease inflation fears, while further escalation risks pushing crude even higher and deepening stagflation concerns.

• Ongoing — Oil Prices & Strait of Hormuz: Brent crude is trading above $110/barrel amid fears of a prolonged Strait of Hormuz closure. Energy is the standout sector of 2026, up over 41% YTD, while elevated oil prices continue to feed directly into headline inflation and weigh on consumer spending.

• Tue, Apr 7 — ISM Services PMI (March): A critical read on the health of the U.S. service sector — the dominant driver of domestic GDP — as analysts watch for signs that rising energy costs and softening consumer demand are beginning to bite.

• Wed, Apr 9 — FOMC Minutes Released: Markets will parse the minutes closely for signals on the Fed’s next move. Fed Chair Powell’s recent remarks that inflation expectations remain well anchored sparked a sharp reversal in rate expectations, with traders now pricing in modest rate cuts later in 2026 after briefly pricing in hikes.

• Thu, Apr 9 — Q4 2025 GDP Final Estimate: The third and final Q4 GDP reading gives the clearest picture of economic momentum heading into a turbulent 2026, and will inform how investors frame the stagflation vs. soft-landing debate.

• Thu, Apr 9 — February PCE Price Index: The Fed’s preferred inflation gauge is forecast to ease slightly to around 3.0%. As the last data point before the Iran conflict’s inflationary impact fully shows up in numbers, it serves as a key baseline for the Fed’s policy path.

The CNN Fear and Greed Index ends the week at Extreme Fear 15. This is the fourth week in row at the Extreme Fear level.