Your Capital Markets Snapshot: Markets Rebound Amid Mixed Signals

Last week, markets experienced a mix of positive and negative developments. U.S. equities rebounded nicely. The S&P 500 is up about 8% over the last two weeks, driven by solid first-quarter economic and earnings data. Corporate earnings growth for Q1 has been positive. About 76% of S&P 500 companies reported positive earnings surprises. However, guidance for Q2 has weakened due to uncertainty around consumer spending and trade tariffs. U.S. GDP growth turned negative in Q1, largely due to a surge in imports ahead of higher tariff rates. Despite this, the labor market appears resilient, with the unemployment rate steady at 4.2% and a positive surprise in job gains. Overall, uncertainty is still high around trade and tariff policies. As the administration softened its positions, markets have since recovered much of the ground given during early April’s selloff and volatility episode. We expect volatility to be present until more certainty around global trade policies occurs. This should provide opportunities to strategically rebalance portfolios and diversify across markets segments and asset classes.