Risk On: Nasdaq Leads Weekly Surge as Investors Embrace Rebound

Markets Rally as Risk Appetite Returns

With geopolitical tensions easing slightly, investors are back in risk mode, driving a strong week for U.S. equities.

The $NASDAQ(.IXIC)$ rose 0.4% on Friday and surged 4.7% for the week. The $S&P 500(.SPX)$ climbed 3.6%, while the Dow Jones Industrial Average jumped 1,412 points, or 3.0%. It marked the best weekly performance for all three indexes since November.

Notably, the Nasdaq has rebounded 10% in just 11 days, officially exiting correction territory.

Top Gainer: $SUPER MICRO COMPUTER INC(SMCI)$ +8.8%
Biggest Loser: Akamai Technologies -16.7%
Best Sector: Technology +0.8%

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Worst Sector: Consumer Staples -1.4%

Inflation Heats Up but Markets Stay Calm

Inflation

Friday’s key data release showed inflation picking up. The Consumer Price Index (CPI) rose 0.9% in March, driven largely by a sharp 10.9% increase in energy prices.

Year over year, CPI climbed 3.3%, the highest level in two years, but largely in line with expectations.

Despite the hotter reading, markets showed little concern. Investors appear to view the spike as temporary, linked to earlier oil shocks following disruptions in the Strait of Hormuz.

Fed Outlook: No Rush to Cut Rates

For now, the Federal Reserve is expected to remain on hold.

Futures markets indicate a low probability of rate cuts at the next two Fed meetings. Policymakers are likely waiting for clearer evidence that energy-driven inflation pressures are fading before making any moves.

Tech Leads, Staples Lag

The continued strength in tech stocks reflects renewed confidence in growth sectors, particularly those tied to AI and infrastructure.

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Earnings Season Takes Center Stage

Next week, focus shifts to first-quarter earnings, with major U.S. banks leading the way.

Key names reporting include:

$Goldman Sachs(GS)$
JPMorgan Chase
Bank of America
Morgan Stanley

Analysts expect S&P 500 earnings to grow 12.6% year over year, marking a sixth consecutive quarter of double digit growth.

What to Watch

Investors are keeping an eye on:

Ongoing geopolitical developments
Producer Price Index data
Bank earnings and forward guidance

Bottom Line

The risk-on trade is back, with markets rallying on easing tensions and resilient economic data.

However, with inflation still elevated and uncertainty lingering, the next phase will depend on whether optimism can hold.

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