Weekly Market Commentary April 13, 2026
Week in Review
Economic releases over the week reinforced the narrative of moderating growth amid persistent inflation pressures. In addition, the services sector showed continued cooling.
The ISM Non-Manufacturing Purchasing Managers’ Index (PMI) for March declined to 54, down from 56.1 in February, highlighting a slowdown in the services sector. This decline suggested that momentum in services is easing, as elevated interest rates continue to weigh on activity. Measures of new orders and business activity moderated, suggesting that the recent slowdown may not be isolated.
Business investment indicators also reflected a more cautious environment. Durable goods orders declined by 1.4%, falling short of expectations. This reading underscores the hesitancy among firms to commit to large capital outlays. Orders excluding transportation provided little reassurance, as gains remained modest. Overall, capital spending decisions are being delayed as companies assess financing conditions and the broader growth outlook.
The March Federal Open Market Committee (FOMC) meeting minutes reinforced the Fed’s patient approach. While policymakers acknowledged early signs of moderation in growth, discussions underscored concern that inflation is not easing quickly enough to justify a shift toward loosening policy. The minutes reiterated that maintaining a restrictive posture remains appropriate until clearer progress is evident.
Inflation data remained the most consequential input for markets. The Core Personal Consumption Expenditures (PCE) Price Index increased by 0.4% month-over-month as underlying price pressures remained persistent. This firm monthly increase reinforced concerns that progress toward the Fed’s inflation target remains slow. Also, the March Consumer Price Index (CPI) increased by 3.3% on an annual basis, lower than the 3.4% expected. Meanwhile, Core CPI rose by only 0.2% on a monthly basis. For investors, this highlights that increases in inflation remain largely contained to energy as a result of the conflict in Iran.
In summary, the week’s data painted a picture of an economy losing some momentum but still operating with enough firmness to keep the Federal Reserve cautious.
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