The US economy accelerated in the first quarter after the final period of last year was hampered by the longest government shutdown in history. The 2% growth rate in real Gross Domestic Product (GDP) ramped up from the 0.5% clip in the fourth quarter, although it missed the 2.3% median estimate. The contributors to the 2% expansion included 1.4% from business investment, 1.1% from consumer spending, of which most came from services rather than goods, public sector expenditures offered 0.7% and private inventories pushed up the headline by 0.4%. Conversely, net exports subtracted 1.3%, as imports rose strongly and residential outlays weighed by 0.3%, as elevated mortgage rates continue to hurt construction activity and closings. <\/p>\n\n\n\n PCE Inflation Approaching Double The Fed\u2019s Target<\/strong><\/p>\n\n\n\n The March report on the Personal Consumption Expenditures (PCE) price index reflected fiercely accelerating cost pressures. The headline and core segments moved up by 0.3% and 0.7% month over month (m\/m) and 3.2% and 3.5% year over year (y\/y), exactly as expected. The results compare to 0.4% and 0.4% and 3% and 2.8% from February. Last month, prices for nondurables, durable goods and services rose 2%, 1.4% and 0.3% m\/m, while the energy segment advanced 11.6% during the period. Real consumer spending rose 0.2% m\/m while incomes retreated 0.1%, serving to drop the personal savings rate to 3.6%, its lowest level since October 2022.<\/p>\n\n\n\n Paychecks Expand with Inflation<\/strong><\/p>\n\n\n\n The employment cost index (ECI) expanded 0.9% quarter over quarter (q\/q) in the January to March period, the fast pace of increase in 3 quarters. The result came in ahead of the 0.8% median estimate and the 0.7% from the prior interval. Wages rose 0.8% while benefits increased 1.2% q\/q, accelerating from 0.7% and 0.8% in the previous print. Furthermore, the public worker ECI climbed 1% q\/q while private sector employees saw a more modest gain of 0.9%. <\/p>\n\n\n\n Initial Filings Fall To 57-Year Low<\/strong><\/p>\n\n\n\n Unemployment claims also supported the view of healthy labor conditions, as initial filings dove to their lowest point going back to 1969 while continuing applications marked a 2-year low. The 189k and 1.785 million figures came in below the expected 215k and 1.820 million during the weeks ended April 25 and 18 as well as the 215k and 1.808 million from the prior prints. Four-week moving averages declined on both fronts to 207.5k and 1.797 million.<\/p>\n\n\n\n Sell In May and Go Away?<\/strong><\/p>\n\n\n\n With the S&P 500 going on an 861 point rally from the March 30th low at 6,317 to an all-time high of 7,178 reached last Monday, some investors are wondering if the old-school sell in May and go away saying applies here on the final day of April. Meanwhile, it\u2019s precisely the wall of worry that market bulls continue to climb that has paved the way for more upside. Indeed, certain analysts are asking if the war, the associated oil price shock, accelerating inflation and significantly higher interest rates is actually good for stocks, which stands in contrast to the traditional belief that economic fundamentals are important for risk assets. In light of the relentless advance, bears have been starved looking for the smallest of pullbacks, as animal spirits and AI enthusiasm have sparked a party on Wall Street even though macroeconomic risks are severe. What\u2019s especially shocking is that today\u2019s lift is being carried by the cyclically oriented, rate-sensitive aspects of the equity space, and adds further evidence that the bulls seem to have an infinite amount of levers to pull. $100 oil used to be a headwind, but a pullback from $110 to $105 seems to be a tailwind in today\u2019s trading.<\/p>\n\n\n\n International Roundup<\/strong><\/p>\n\n\n\n The central banks of Europe and the United Kingdom decided to keep their rates on hold today but officials are highly attentive to accelerating cost pressures. Investors have pared back hike odds in 2026, however, as policymakers are worried that tightening their stance could drive the continent into recession. The views from both institutions served to quell global borrowing costs after the Fed meeting yesterday lifted them.<\/p>\n","protected":false},"excerpt":{"rendered":" Stocks are poised to close out their best month since April even as artificial intelligence enthusiasm could be cooling off on the heels of 4 of the 7 magnificents reporting last night, as a sharp pre-open rip was quickly dismissed, sending 3 of those names deep into the red. There\u2019s certainly a long list of reasons for profit-taking at this juncture, especially in consideration of yesterday\u2019s hawkish pause from the Fed alongside a Middle East situation that\u2019s at risk of escalation. <\/p>\n","protected":false},"author":903,"featured_media":98761,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[12711,18,6,8,9,26,3],"tags":[],"contributors-categories":[13760],"class_list":{"0":"post-242259","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ibkr-economic-landscape","8":"category-macro","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-text-articles","13":"category-traders-insight","14":"contributors-categories-ibkr-macroeconomics"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/04\/image-136-1100x800.png\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/04\/image-137-1100x801.png\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/04\/image-138-1100x801.png\")
<\/figure>\n\n\n\n