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Economic Trends and Market Highlights – April 25, 2026

In this weeks quick recap: Inflation pressure and new Fed direction

WEEK IN REVIEW: APRIL 25, 2026

 

Another oil shock related to the war in Iran dominated the week, pushing energy prices sharply upward and reigniting inflation pressures the Federal Reserve had yet to fully contain.

Equities held up better than the broader environment might have suggested, with the S&P 500 extending its streak to eight1 consecutive weeks. The gains, however, masked a quieter shift toward caution, with borrowing costs staying elevated and volatility on the rise.

Below is the weekly scorecard.

STOCK INDEX PERFORMANCE

  • The S&P 500 added2 0.88%.
  • The NASDAQ 100 climbed3 1.22%.
  • The Dow Jones Industrial Average rallied4 2.13%.

 

MAJOR FORCES SHAPING MARKETS

The Fed shifted its stance. The Federal Reserve’s April meeting minutes5, released on May 20, were more aggressive than markets expected. With inflation well above its 2% target, a growing number of committee members argued the next move could be a hike rather than a cut. Markets have since priced out most expected cuts this year and are now factoring in a potential rate increase by late 2026 or early 2027.

Eyes turn to June Fed meeting. On Friday, May 22, Kevin Warsh was officially sworn into office as the Chair of the Federal Reserve, marking the end of Jerome Powell’s 8-year tenure as Chair. Now, all eyes are on the June 16-17 meeting. Previously, Warsh was expected to cut rates; however, as short-term bond rates continue to respond negatively to Warsh’s potential dovish approach, pundits6 argue that a rate hike may be necessary instead. As of May 26, markets are pricing in a 97.2% chance of rates holding steady at the June meeting, but there is now a greater-than-10% chance of a hike at the July meeting, according to the CME FedWatch tool7.

Consumers felt it. The University of Michigan’s Consumer Sentiment Index fell to an all-time low of 44.88 in May, weighed down by rising gasoline prices and war-related uncertainty. 57% of those surveyed, up from 50% in April, cited high prices as directly eroding their finances. The labor market remained solid, but confidence this low rarely stays disconnected from spending for long.

 

THE WEEK AHEAD

Markets are now debating not whether the Fed will cut, but whether it may need to hike. With some forecasters projecting the consumer price index (CPI) approaching 6%9 annually in the second quarter, any Fed communication leaning toward tighter policy will move markets. Inflation expectations are already tightening financial conditions without a rate increase, leaving little room for policymakers to sound reassuring.

The oil market warrants equal attention. With Brent crude consistently spiking above $10010, sustained energy costs are a primary reason inflation projections continue to rise. Further escalation around the Strait of Hormuz would strengthen the case for keeping rates elevated and pressure risk assets. Credible progress toward de-escalation, on the other hand, could ease oil meaningfully and give both the Fed and markets more flexibility.

As always, know that we are staying apprised of what levers are moving markets to help you stay informed. And, if you have any general questions about your portfolio, we are here to help. Just reach out, and we can connect.

 


STAY AHEAD

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This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax, financial or legal advice. Please consult legal, financial or tax professionals for additional and/or specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Advisory services offered by World Investment Advisors, LLC. Securities offered by World Investments, LLC, member FINRA/SIPC. World Investment Advisors, LLC is affiliated through common ownership with World Investments, LLC. PensionmarkMeridien is unaffiliated with either World Investment Advisors, LLC or World Investments, LLC.

Sources:

  1. CNBC, May 25 2026
  2. Trading View May 23, 2026
  3. Trading View, May 23,2026
  4. Trading View, May 23, 2026
  5. Federal Reserve, April 2026
  6. CNBC May 18, 2026
  7. CME Group May 2026
  8. CNN May 22, 2026
  9. CNBC, May 18, 2026
  10. Trade Economics, May 26, 2026

Securities offered by World Investments, LLC (Member FINRA/SIPC)