US stocks rose as prospects for a continuing resolution in the Senate improved. The NASDAQ increased by 2.3% and the Dow climbed 1.5%, with financial stocks such as JPMorgan, Goldman Sachs, and American Express leading the gains.
Despite a decline of over 3% in the DJIA this week, Friday saw a bounce back. The University of Michigan’s preliminary Consumer Inflation Expectation survey revealed an increase in expectations from 3.5% in February to 3.9% in March.
Michigan Consumer Sentiment Drop
The Michigan Consumer Sentiment Index dropped sharply to 57.9 in March, much lower than the 63.1 forecast. Senator Chuck Schumer’s support for the continuing resolution suggests bipartisan backing, which is necessary for passage.
If the resolution fails, a government shutdown could increase market anxiety. Positive earnings reports lifted stocks like Docusign, which jumped 18%, and Rubrik, which saw a 26% rise.
What we are seeing here is an encouraging shift in the market after a rough week. While the Dow had been down more than 3% over the past several days, Friday managed to provide a welcome recovery. The rise in the NASDAQ and Dow was driven largely by financial stocks—names like JPMorgan, Goldman Sachs, and American Express, which all posted good gains. Their performance suggests that investors are feeling better about financial institutions in this environment.
One of the more notable stories comes from consumer inflation expectations. The University of Michigan’s preliminary survey showed that Americans now expect inflation to tick up from 3.5% in February to 3.9% in March. Given how dominant inflation concerns have been for markets, any increase in expectations will be watched carefully. It could suggest that prices across goods and services may remain stubbornly high, something that could complicate future interest rate decisions. The Federal Reserve will be looking at data points like these when deciding whether to take action in the coming months.
However, consumer sentiment has fallen, with the Michigan Consumer Sentiment Index dropping to 57.9—well below the forecast of 63.1. A decline like this suggests households could be feeling less confident about the economy, which might affect future spending habits. If consumers start pulling back on purchases, businesses could see lower revenues, which is something to consider when evaluating equities in the near term.
On the political side, Senator Schumer’s support for the continuing resolution increases the odds of avoiding a government shutdown. If it does pass, markets will likely breathe a sigh of relief. If it does not, we could see renewed volatility. A government shutdown introduces uncertainty around federal spending, employment, and broader economic confidence, all of which the markets dislike.
Corporate Earnings And Market Impact
Elsewhere, corporate earnings played a role in lifting some stocks. Docusign jumped 18%, while Rubrik saw an even stronger move, rising 26%. This tells us that investors are rewarding companies that deliver positive surprises in their earnings reports, reinforcing the importance of company fundamentals despite broader economic concerns.
For those trading derivatives, this environment requires careful attention to macroeconomic data, policy decisions, and corporate earnings. Changes in inflation expectations could impact interest rate bets, shifts in consumer sentiment may influence retail and service-sector stocks, and the resolution of political risks could remove a possible market headwind. This means assessing positions accordingly, especially with potential volatility ahead.
