THE WEEK ON WALL STREET
Hope won out over fear last week as investors set their sights on a Middle East ceasefire holding and optimistic prospects for the Strait of Hormuz reopening. The S&P 500 Index rose 3.56 percent, while the Nasdaq Composite Index picked up 4.68 percent. The Dow Jones Industrial Average advanced 3.04 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 4.52 percent.
FACT OF THE WEEK
On April 13, 1976, the US reintroduced the discontinued and never-popular $2 bill to mark the nation’s bicentennial. The bill carries a portrait of Thomas Jefferson, born on April 13, 1743.
MARKET MINUTE
Ceasefire Optimism
Stocks opened the week to modest gains, with the S&P 500 rising for the fourth consecutive trading day. Investors warily eyed the U.S.-imposed April 7 deadline for Iran to allow the free flow of oil and commerce through the Strait of Hormuz or risk further attacks on its energy infrastructure.
Stocks opened lower Tuesday but recovered late in the session on news that Pakistan asked the U.S. to push its deadline out by two weeks.
Markets then pushed higher on Wednesday following White House comments that the U.S. was suspending attacks for two weeks while it considered a ceasefire proposal. All three major averages gained more than 2.5 percent on Wednesday alone as tech stocks led the rally.
The relief rally continued through Thursday as the Dow Industrials turned positive for the year.
On Friday, the markets shrugged off news that headline inflation rose to a two-year high in March. Stocks also looked past a disappointing consumer sentiment reading.
Mixed Inflation Report
The overall Consumer Price Index rose in March, but a closer look revealed the reason investors were nonplussed by the results.
“Headline” inflation, economist-speak for the overall inflation rate, rose 3.8 percent year over year last month. That was up from 2.4 percent in February and its highest level since April 2024. But underlying inflation stayed cool. That’s because much of the rise in overall inflation was attributed to a 21 percent spike in gas prices, an outcome many investors expected.
So “core” inflation, which excludes energy and food prices, came in at 2.7 percent year over year, slightly below expectations.
FINANCIAL STRATEGY OF THE WEEK
Eight Mistakes That Can Upend Your Retirement
Pursuing your retirement dreams is challenging enough without making some common, and very avoidable, mistakes. Here are eight big mistakes to steer clear of, if possible.
No Strategy: Yes, the biggest mistake is having no strategy at all. Without a strategy, you may have no goals, leaving you no way of knowing how you’ll get there—and if you’ve even arrived. Creating a strategy may increase your potential for success, both before and after retirement.
Frequent Trading: Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then make adjustments based on changes in your personal situation, not due to market ups and downs.
Not Maximizing Tax-Deferred Savings: Workers have tax-advantaged ways to save for retirement. Not participating in your employer’s 401(k) may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.
Prioritizing College Funding over Retirement: Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.
Overlooking Healthcare Costs: Extended care can be an expense that undermines your retirement financial strategy if you don’t plan for it.
Not Adjusting Your Investment Approach Well Before Retirement: The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Consider adjusting your asset allocation in advance of tapping your savings so you’re not selling stocks when prices are depressed.
Retiring with Too Much Debt: If too much debt is bad when you’re making money, it can be deadly when you’re living in retirement. Consider managing or reducing your debt level before you retire.
It’s Not Only About Money: Above all, a rewarding retirement requires good health, so maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active.