Stock Market Outlook: April 5th = Downtrend
The stock market outlook continues in a downtrend, but the bulls did picked themselves up a bit last week.
Oil, Industrials, Communications, and Momentum led assets higher, while Energy and Bitcoin underperformed. Volatility crept into employment data, as we wait for the next round of inflation data and geopolitical headlines to hit the wires.
TREND ANALYSIS
The S&P500 ( $SPX ) rose 1.7% last week, finding some footing at the September lows. The index is now:
- ~3% below the 50-day moving average
- ~1% below the 200-day moving average
Technical indicators showed some signs of bullishness last week:
- Average Directional Index: Bearish
- Trend strength has stopped increasing
- Institutional Activity: Neutral
- Look for a follow-through day to confirm the new rally
- A follow-through is a significantly higher close than the prior day, on higher greater volume, and usually occur on Day 4 – 11 of the rally attempt
- On-Balance Volume: Bearish
- Inflected higher, but remains below the long-term average
SPX Price & Volume Chart – 2026-04-05
PERFORMANCE HIGHLIGHTS & COMPARISONS
Asset Classes
Another week, another win for Oil ( $USO ). Bitcoin was the lone asset class in the loss column. U.S. bonds ( $IEF ) rose to neutral bias.
Asset Class Performance – 2026-04-05
S&P500 Sectors
Industrials and Communications ( XLI & XLC ) outperformed; Energy ( $XLE ) gave back some of the recent gains. Industrials ( $XLI ) also reclaimed neutral bias.
S&P Sector Performance – 2026-04-05
S&P500 Investing Styles
All the investing styles scored a win last week: Momentum ( $MTUM ) secured the top spot with a gain of more than 3% and Defensives ( $POWA ) came in last place with 0.6%. Low Beta and Small Cap Value moved to neutral bias.
Sector Style Performance – 2026-04-05
COMMENTARY
Markets
Volatility retreated last week, for both equities and interest rates, thanks to oversold bounces across various asset classes. A step in the right direction.
Macroeconomic Data & Policy
Employment data showed higher than expected gains, but came with an asterisk. Job openings (JOLTS) were steady, and ADP private payrolls beat expectations, so no issues there. Non-farm payrolls (NFP) was the problem: high volatility makes drawing conclusions on the health of the labor market very difficult. March employment just about tripled expectations, in large part from seasonal recoveries and the end of a major strike in healthcare. Payrolls in February were revised significantly lower (41k to -133k), while January figures were revised significantly higher (34k to 160k).
ISM Manufacturing PMI for increased in March, remaining in expansion territory and well above last year’s contractionary number.
Geopolitics
The 10-day grace period for U.S.- Iran negotiations ends this week, with severe ultimatums issued via social media. Expect asset price volatility to continue until a ceasefire is reached. And the longer the Strait of Hormuz remains closed, the longer the price impacts will reverberate through supply chains.
EYES ON THE HORIZON
We’ll get some form of macro data every day next week, plus a look at the March FOMC minutes.
- Monday: ISM Services PMI, 2026 NCAA men’s basketball National Championship Game
- Tuesday: Durable Goods
- Wednesday: FOMC Minutes
- Thursday: February PCE, Final Q4 GDP
- Friday: March CPI, Michigan Consumer Sentiment
Best to Your Week ( and GO BLUE)!
The Safe Investing Blog 