Recap | Week Ahead | Whiplash — CRA Financial, LLC

“If everybody is thinking alike, then somebody isn’t thinking.” - General Patton

Last week's market recap:

The S&P 500 closed the week down -1.87%. Year-to-date the index is down -4.68%
NASDAQ closed the week down -2.06%. YTD the index is down -6.73%
U.S. Aggregate Bond index closed the week down -.51%. YTD the index is down -.68%
10-Year Treasury Rate increased, ending the week at 4.39% up from 4.28% the prior week
- Fed Funds Target rate remains at 3.50-3.75%
The 1-Year Treasury is yielding 3.75%
A 6 Month Treasury is yielding 3.74%

The week ahead:

Consumer Sentiment
Jobless Claims
Flash PMIs (Provides give a glimpse of how the conflict is affecting manufacturing activity)
U.S.-Iran Conflict
Corporate Earnings: Chewy, Cintas, Blink Charging, Carnival, and many more

Quick Comments:

The Mideast conflict has triggered a meaningful energy shock. The duration of the conflict is in focus. Broad based indexes sold off last week in fears the conflict may be prolonged. However, most stock are shooting higher today based on Trump’s 7am statement, saying he’s postponing attacks on Iran power plants, citing productive talks to end the war.

The Fed and other central banks are expected to hold interest rates steady throughout 2026. They are balancing risks to the labor market vs upside risks to inflation.

The market has quickly moved from expecting 2 rate cuts in 2026 to now expecting 0 rate cuts.

These drastic moves tend to be an overreaction.

The base case should be:

Slower growth
Slight tick up in inflation maybe above 3%
1 Interest rate cut in 2026
Bond yields remain rangebound
Stocks hold up
Fundamentals remain strong.

Uncertainty is never comfortable, but long-term investors should use volatility to rebalance, add quality, and strengthen diversification.

As always, let us know if you have any questions.

Best,

CRA Investment Committee

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA

Robert T. Martin, CFA, CFP®

Joe McCaffrey, CFP®

Gordon Shearer Jr., CFP®

Jeff Hilliard, CFP®, CRPC®

Phillip Tompkins, CFP®

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