Rebound in GDP growth

The economy delivered a solid start to 2026, with first-quarter GDP rising 2.0% as strong business investment and resilient consumer spending offset weakness in housing and trade. Corporate results have also been impressive, helping push the S&P 500 to new highs after a sharp risk-on rally since late March.

Inflation is becoming more of a concern as higher oil prices are feeding into broader price pressures, lifting both headline and core measures. The Federal Reserve held rates steady, but with labor market data firming and inflation still elevated, policy looks likely to stay on hold for now.

For investors, the backdrop still favors growth-oriented assets tied to capital spending and AI-related infrastructure. At the same time, higher energy costs, stubborn housing weakness, and rising import-driven trade drag remain key risks that could limit how far the expansion runs.