Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 3.0%, the S&P 500 was up 3.4%, and the NASDAQ rose 4.4%. Foreign stocks (MSCI EAFE) were up for the week, rising 4.4%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.36%. (Data source: Wall Street Journal)
Markets Rally on Hopes of De-escalation
Markets rebounded last week after a rough month of March on hopes of de-escalation in Iran. Although the market showed signs of the war in Iran winding down, it is still unclear how a U.S. exit would look regarding the Strait of Hormuz. The next few weeks will give some clarity if we see a U.S. exit, as President Trump has expressed, or if we see a continuation of the conflict. Oil prices took another move higher last week, moving above $110 per barrel, nearly double what they were to start the year. It is yet to be seen what the economic impact this has, but it is likely to lead to slower GDP growth this year.
Taking a Step Back
Despite all the headlines this year and worries about the markets and economy, major domestic indexes are down about 5% for the year. This comes after 3 consecutive years of double-digit gains and is good to put in perspective, as it sometimes feels worse than it actually is. Market pullbacks like this can sometimes offer opportunities to rebalance into areas that may have been hit harder than others, and sometimes for no reason. Weeks like this past are why panic selling typically does not work, as markets rallied unexpectedly, and those who sold did not participate.
Caterpillar Stock Up 20% Year to Date
Caterpillar (CAT) is the largest stock in the US industrial sector and is up 20% while the broader US stock indexes are down 3-5%. The company filed its annual report on February 13th, reporting revenue of $67.59 billion and net income of $8.88 billion (CAT Investor Relations). Both numbers beat analysts’ 2025 expectations, and the stock showed resilience in the first quarter of 2026, reflecting strong investor confidence in Caterpillar’s management. CAT’s 2025 performance was also likely boosted by mining specifically for gold and silver. The strong performance of the two precious metals last year significantly increased demand for mining equipment, which benefited CAT. Although Caterpillar has performed well to start 2026, the company remains highly sensitive to broader macroeconomic conditions. If global construction or mining slows down, CAT will likely see a decline in demand for its heavy machinery, which will ultimately be reflected in the stock price (CNBC).
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Quiz
What is Gold’s Year-to-Date Performance? (Scroll Down for Answer)
- -3%
- 2%
- 5%
- 8%
Answer:
4. 8%. Although gold prices have fallen significantly since their peak in late January, the precious metal has still returned over 8% on the year. Exposure to Gold in the MGO portfolios has helped boost our performance against broader indexes so far this year.
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