Last week, U.S. equity markets turned in a strong but volatile showing as investors balanced easing geopolitical tensions with persistent inflation pressure.

The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite each rose roughly 3.6% to 4.3% for the week, helped by a late-week rally tied to improving sentiment around the Middle East. At the same time, February PCE inflation remained firm, rising 0.4% month over month and 2.8% year over year, underscoring that price pressures were already elevated before the energy shock. Labor data was steadier, with jobless claims and related indicators suggesting growth is slowing but the economy remains resilient.

Next week, markets are likely to remain highly sensitive to both geopolitical headlines and fresh economic releases. The backdrop is a fragile U.S.–Iran ceasefire that has eased tensions only temporarily, with reports of violations, attacks on energy infrastructure, and continued strain involving Israel and Lebanon keeping risk appetite uneven. In terms of market economy, investors will focus on inflation and consumer data, while retail sales, industrial production, and consumer sentiment will be watched for signs that growth remains resilient despite rising costs. Against that backdrop, recent Federal Reserve messaging and FOMC minutes point to a cautious policy stance as officials weigh moderating growth against the risk of energy-driven inflation delaying rate cuts.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.