Outside of the payroll report, much of the broader economic data remains relatively constructive. Core retail sales are growing at a 3.9% year-over-year³, while wages continue to rise at approximately 3.8% year-over-year⁴, supporting consumer spending. ISM Manufacturing registered at 52.4⁵, marking back-to-back months above the 50 threshold that signals economic growth. At the same time, productivity trends have been encouraging. Fourth-quarter productivity rose 2.8%, while third-quarter productivity was revised higher from 4.9% to 5.2%.⁶

Volatility Creating Opportunity

Markets are currently navigating a tug-of-war between positive economic fundamentals and rising geopolitical and inflationary risks. Periods of uncertainty can be uncomfortable for investors, but they also tend to create opportunity. Market volatility often leads to indiscriminate selling, allowing quality companies to trade at more attractive valuations. It is also important to maintain perspective. Not long ago, markets were dealing with the uncertainty surrounding Liberation Day, yet the S&P 500 has risen roughly 36% since that period.⁷ Short-term volatility is a normal part of the market cycle, even within longer-term upward trends.

Market Breadth and Selective Opportunities

Despite the current geopolitical headwinds and a series of TGIF concerns, the broader equity market has held up relatively well. The S&P 500 is down just – 1.53%, while the S&P 500 Equal Weight Index is up +2.76%.⁸ This divergence highlights an important shift that market performance is broadening beyond the narrow leadership that characterized prior periods, suggesting underlying economic conditions remain on a solid footing.

Corporate earnings continue to reinforce that view. Earnings growth is running at approximately 13.65%⁹, marking five consecutive quarters of double-digit expansion. While certain areas of the market have come under pressure, the overall profit backdrop remains constructive.

While economic growth has moderated, running closer to 2% currently following weaker January data, the broader outlook remains constructive. As policy initiatives such as the One Big Beautiful Bill begin to take effect through deregulation and tax relief for both consumers and corporations, growth could reaccelerate toward the 3% range, providing further support for corporate earnings and equity markets.

Fixed Income

U.S. Treasury yields ended the week higher across the curve as persistent Middle East tensions undermined expectations for stable oil supply, driving crude prices sharply higher and reinforcing market concerns about renewed inflation pressure. By Friday’s close, the 2-, 10-, and 30-year yields were higher by 16, 17, and 12 basis points, respectively.¹⁰

Credit markets posted a modest improvement last week, a steady finish that masked notable intraweek volatility. Investment-grade spreads tightened 1 basis point to +121, while high yield spreads narrowed 4 basis points to +340. In the tax-exempt market, municipal yields moved higher alongside Treasuries, rising 10–17 basis points across the curve.¹¹