North American futures are looking to extend yesterday’s rally, driven by hopes of a potential end to the Middle East conflict and a reopening of the Strait, which has been effectively shut since U.S. and Israeli strikes on Iran. Overseas, equity markets followed with strong gains, led by Korea and Japan, up 8% and 5% respectively, while European shares were also higher with the Euro Stoxx up over 2% at the time of writing. Helping sentiment, Trump signalled the war could end “very soon,” adding the U.S. may exit Iran within two to three weeks. That said, markets have seen similar timelines come and go, and the lack of follow-through is becoming part of the pattern, as deadlines evaporate. As Secretary of War Hegseth put it, “the point is to be unpredictable.”
What war? Risk assets staged a relief rally in yesterday’s trading session on signs both sides may be open to de-escalation. Reports that Trump was willing to end the conflict without securing a reopening of the Strait of Hormuz, alongside purported comments from Iran’s president Masoud Pezeshkian that the country has the “necessary will to end this war” but only with guarantees, including an end to military actions and assurances against further aggression, were enough to shift sentiment materially. Whether this represents a meaningful change in Iran’s position remains unclear, but markets didn’t seem to need a confirmation. The S&P 500 rose 2.9% with broad participation, led by cyclicals including airlines, autos, and semiconductors, while the Nasdaq gained 3.8% and the TSX advanced 2.6%, even as oil prices eased and energy lagged. After pricing in a prolonged disruption, markets are now reacting aggressively to even tentative signs of an off-ramp. That said, uncertainty remains, particularly with the status of the Strait unresolved, and key conditions still undefined.
Here’s some more good news for markets. Private sector job growth came in slightly above expectations in March, with payrolls rising by 62,000 according to the latest ADP numbers. The one caveat is that gains remained highly concentrated in a few sectors, with hiring driven primarily by education, health services, and construction, while several areas including trade, transportation, utilities, and manufacturing saw declines. Small businesses led job creation, adding 85,000 positions, while medium and large firms both shed jobs, highlighting uneven labour market dynamics. Wage growth remained stable for job stayers at 4.5%, with stronger gains for job changers at 6.6%. The data suggests a modest but narrow expansion in employment ahead of the official nonfarm payrolls report. Adding to this, U.S. retail sales rose 0.6% in February, exceeding expectations and signaling resilient consumer demand. The data points to broad-based gains, helped by a rebound in auto purchases. Core measures were also solid, with sales excluding autos and gas up 0.4% and the control group (used in GDP calculations) rising 0.5%, both above forecasts. The data suggests consumer spending remains a key pillar of economic growth despite broader uncertainty.
Not so precious. If you thought equity markets were disappointing last month, you likely haven’t been tracking gold. Despite a late-month rebound on tentative signs of de-escalation in the Middle East, bullion still posted its worst monthly decline since 2008, falling nearly -12% in March. The decline appears tied to a mix of shifting rate expectations, some unwinding of earlier inflation and geopolitical hedges, and forced selling alongside the equity drawdown earlier in the month. Recent bullion gains have come as the U.S. dollar and treasury yields eased, but price movements remain heavily influenced by headlines rather than a clear macro driver. From here, gold is likely to remain sensitive to both the path of rates and the trajectory of the conflict, with outcomes still highly contingent on how those two scenarios evolve.
Stress in business development companies is rising and could becoming a risk to the real economy, as turmoil in private credit tightens financing conditions for U.S. middle-market firms. These funds, which manage over $400 billion and are a key lending source for smaller companies, are facing rising redemptions, higher leverage, and pressure to sell illiquid assets at discounts, potentially worsening balance sheets. As funding costs rise and liquidity shrinks amid the Iran-driven energy shock, BDCs may either pass on higher borrowing costs or pull back lending altogether, increasing the risk of layoffs, defaults, and slower growth. The sector’s strain is significant given that middle-market firms employ roughly 48 million people and generate over $10 trillion in revenue. Strategists are noting that while a total collapse is unlikely, an extended downturn could trigger restructuring, consolidation, and tighter credit conditions across the economy, highlighting how private credit stress could evolve into a broader economic drag if conditions continue to deteriorate.
Artemis II is set to launch today, sending four astronauts on a journey around the Moon and back. This marks the first crewed lunar mission since the Apollo era and potentially the farthest humans have traveled in space. The crew includes Canadian astronaut Jeremy Hansen alongside NASA astronauts Reid Wiseman, Victor Glover, and Christina Koch, traveling aboard NASA’s Orion spacecraft. The first launch window is scheduled for this evening (weather dependent), with additional nightly opportunities through April 6 if delays occur. The roughly 10-day mission will test spacecraft systems with astronauts on board but will not include a lunar landing, so no moon walks this time. Artemis II is part of NASA’s broader goal of establishing a sustained presence on the Moon as a stepping stone toward future missions to Mars.
Diversion: Every office needs this
