Stocks and other major financial assets extended their selloff into a fourth week, as the conflict with Iran does not appear to be ending as soon as the market initially hoped.
This week was marked by back-and-forth claims that truce talks were taking place and making progress, while others said that no progress had been made, stoking volatility in both directions. Oil prices continue to be a major topic, as triple-digit Brent crude oil prices have been a reality for two weeks.
Notably, the NASDAQ has officially entered correction territory after dropping more than 10% from its October high. This week alone, the NASDAQ retreated 3.2%. The Dow Jones Industrial Average held up relatively well, with a 0.9% decline. The S&P 500 is also near correction territory and declined 2.23% this week.
The energy sector continues to perform well and returned more than 5% this week, followed by the materials sector, which returned more than 4%. Utilities and consumer staples are now behaving like safe havens again, while all other sectors posted significant losses, led by the communication and technology sectors, both of which posted heavier losses than the NASDAQ.
Interest rates continued to climb higher as fears of energy-related inflation and concerns about large fiscal deficits mounted further. The U.S. 5-year Treasury yield rose another 5 basis points to 4.07%, and the 10-year yield rose 3 basis points to 4.43%. After a 9-day decline, gold prices finally stabilized as profit-taking eased.
As we head into April, the war will have officially lasted for more than one month. Without a clear goal from the U.S. and Israel, it is hard to see what exactly will bring an end to the war. While Israel receives assistance in accomplishing its ambitions, American coffers and the stock market continue to suffer. With a plethora of economic data available next week, maybe we can turn our attention to more domestic matters.
We hope you can put all the turbulence behind you and enjoy the weekend. This is Adams Wealth Advisor, and you will be hearing from us again next week.