Five for Friday – April 17, 2026

Rally, Inflation, Gas, Workers, and Did You Know

1. Rally

As of Thursday morning, the S&P 500 sits at a new all-time high, and the 11% return over the last 11 days is one of the best stretches of that length since 1950. Very rare air. If that feels surprising given the ongoing turmoil in Iran, you’re not alone (hand up). But two fundamental tenets of investing help color this action: 1) stocks almost always bottom before it feels like they should (i.e., before the economic or geopolitical situation is resolved); and 2) the question is not “are things good or bad,” but “are things getting better or worse?” When an unexpected headwind hits, markets tend to overreact to the downside – i.e., sell first, ask questions later. But that leaves room for upside if things improve (even slightly), and that’s what has happened here. As for this move, it stands as one of the fastest trough-to-new high rallies of the last 75 years. Generally, faster rebounds portend better forward returns (as they indicate buyer urgency, a bull market staple), and markets rarely make new lows after recovering this forcefully. Count that as good news.

2. Inflation

Another wind in the sails of markets is the softer-than-expected March inflation data. Yes, headline CPI popped as energy prices spiked (the gasoline index rose 21.2% m/m, the largest increase since at least 1967), but the Federal Reserve’s preferred core CPI (ex-food and energy) actually came in softer than feared. Meanwhile, shelter – the largest input into the inflation basket and most consumer budgets – continues to moderate (see right). No one would argue the inflation backdrop is ideal for consumers, but investors can breathe a sigh of relief that Iran deescalation and softer core inflation in March should keep the Fed from feeling forced to raise interest rates this year.

3. Gas

The war in Iran has re-energized the conversation on U.S. energy independence. On one hand, because oil prices are set by a global tanker market, America’s status as a net exporter has done little to shield consumers from high gasoline prices (even if it makes shortages less likely). However, to see the true benefit of the fracking revolution, look to natural gas, which – because it is much harder to transport and store – remains a much more localized market. America is the world’s largest producer, and as a result, U.S. prices have actually fallen since the war began, while European and Asian prices are up 50%+ each. Natural gas is the largest source of energy used to generate electricity in the U.S.  

4. Workers

The predominant trends in the U.S. economy in the last few years (excluding AI) is the massive concentration of job growth in the health care and social assistance industry. Over the last two years, it has added nearly 1.5 million payrolls to the U.S. economy, while every other industry combined has actually lost roughly 300,000 payroll jobs. And this is expected to continue: through 2034, the health care and social assistance sector is projected to see the largest job growth (+2.0 million) and be the fastest growing industry sector (+8.4%). Between a wealthy, aging, longer-living population and a type of oft-hands-on work that’s well-insulated from both AI and offshoring, the sector is set to remain a critical labor market ballast in the U.S. for years to come.  

5. Did You Know

that battery costs have fallen by over 99% since 1991? This achievement is a classic illustration of Wright’s Law – the idea that costs fall as cumulative production increases and knowledge accumulates. Like aircrafts, semiconductors, and solar panels, batteries didn’t get cheaper because of one big invention that got a lot of attention. Instead, thousands of incremental advances compounded as production ramped up. That bears celebration.  

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This is not a complete analysis of every material fact regarding any company, industry or security. The opinions expressed here reflect our judgment at this date and are subject to change. The information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. Market and economic statistics, unless otherwise cited, are from data provider FactSet.

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