Your Capital Markets Snapshot: Markets Reflected a Cautious Tone

Last week, markets reflected a cautious tone as investors digested a mix of economic signals and geopolitical developments. The Federal Reserve held interest rates steady for the fourth consecutive meeting, maintaining a patient stance amid lingering inflation and trade uncertainties. Updated projections showed a slight downgrade in 2025 GDP expectations to 1.4% and an upward revision in inflation forecasts, suggesting a stagflationary tilt. Retail sales data was mixed—headline sales declined, but the control group, which feeds into GDP, rose modestly. Housing data was broadly weak, with notable drops in permits and starts, while jobless claims remained stable. Geopolitical tensions, particularly the Israel-Iran conflict, kept oil prices elevated, contributing to market unease. Equity markets, including the S&P 500 and Russell 2000, showed signs of consolidation, with breadth indicators weakening. Overall, markets appear to be in a “wait- and-see” mode, with near-term sentiment slightly bearish barring any major geopolitical or trade-related surprises.