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LPL Research | Last Updated: May 01, 2026

LPL Research provides its Weekly Market Performance for the week of April 27, 2026. U.S. equities advanced for a fifth straight week despite cautious sentiment driven by geopolitical uncertainty in the Middle East, rising oil prices, and mixed reactions to AI-related developments and earnings. However, markets ultimately focused on positive takeaways and a broadly upbeat earnings backdrop. Global equities also gained ground, with Europe supported by steady central bank policies and a late-week drop in oil futures, while Asia extended gains broadly on the back of tech strength. Fixed income markets faced pressure from fiscal concerns, partially offset by improved demand from March’s weak outcomes. Commodity markets were led by continued gains in oil, while the yen rallied on likely intervention.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 5/1/26 @3:13 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Cautious sentiment kept traders from making outsized moves for most of the week, with Magnificent Seven earnings and geopolitical developments at the forefront. Higher oil prices, lingering uncertainty around the Strait of Hormuz, and artificial intelligence (AI) jitters on OpenAI missing internal goals pressured major averages. However, Wall Street bulls persevered for a fifth straight weekly advance for the S&P 500. Investors shook off canceled negotiations and a ramp in U.S.-Iran rhetoric to focus on better-than-expected results from four of corporate America’s five main AI hyperscalers (amid a broadly blockbuster earnings season thus far). Strength in first quarter economic data through the headwinds of the Iran conflict and reports of a fresh proposal from Tehran also helped drive late-week gains.

In earnings, Google-parent company Alphabet (GOOG/L) stated cloud and AI offering demand remains high, boosting confidence that massive investments are paying off, while Amazon (AMZN) rose on strong sales results for its Amazon Web Services unit. Meta (META), however, faced some scrutiny around spending after flagging rising component and data center costs, while Microsoft’s (MSFT) cloud growth failed to inspire. Plus, Apple (AAPL) rallied after the iPhone maker posted a surprisingly strong revenue forecast.

International Equities: The European benchmark STOXX 600 Index edged higher over a holiday-shortened week for many markets. Higher crude prices acted as an overhang for most of the week, denting sentiment before stocks rebounded as upward pressure on oil prices eased late in the week. Key monetary policy decisions were also among focal points. The U.K.’s FTSE 100 Index rallied Thursday after the Bank of England held rates and Governor Andrew Bailey stated holding rates is a “reasonable place” to be — but suggested hikes remain on the table in the event of a continued energy supply disruption. Shortly thereafter, the European Central Bank also left rates unchanged, awaiting more clarity on economic implications of the U.S.-Iran conflict.

Asian equities capped a fourth week of gains amid holiday-thinned trading Friday. Japanese markets ended mixed, paring back gains as the yen strengthened as a result of verbal and suspected physical intervention from central bankers in Tokyo for the first time since 2024. This followed the Bank of Japan holding rates steady and offering some hawkish-leaning takeaways two days prior. Meanwhile, amid a busy earnings calendar, investors continued to favor AI-related names and suppliers on strong earnings growth expectations, powering outperformance for Korea. Taiwan ended little changed and Hong Kong fell, while Greater China rose with some support from upbeat earnings from rare earth and insurance names.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded lower this week. A couple of moving parts drew attention and weighed on weekly performance, one being the lingering overhang of fiscal risks. Fitch Ratings’ April 30 rating affirmation highlighted U.S. deficits running far above other double‑A peers, with deficits near ~7% of gross domestic product in 2026–27 and debt exceeding 120% of gross domestic product. Fitch cited tax cuts under the One Big Beautiful Bill Act, limited tariff offsets, and rising age‑related spending as key pressures, noting November’s midterm elections as pivotal for fiscal credibility.

Meanwhile, this week’s $183 billion slate of two‑, five‑, and seven‑year Treasury auctions showed improved demand versus March’s weak outcomes, with bid‑to‑cover ratios back to normal ranges. The results align with Treasury Borrowing Advisory Committee (TBAC) observations of broadly resilient demand, though a compressed auction calendar and ongoing supply fatigue capped performance. The juxtaposition of Fitch’s warning and smoothly clearing auctions suggests markets can still absorb elevated issuance. However, history shows this resilience can fade quickly if deficit expectations rise or investors demand greater risk compensation.

Overall, Treasury markets remain orderly, but the system is running on borrowed confidence. Auctions continue to clear, allowing fiscal deterioration to be deferred rather than addressed. In our view, with markets arguably complacent relative to the scale and persistence of deficits, longer‑dated yields are biased to remain elevated — or move higher — as fiscal risks reassert themselves.

Commodities and Currencies: The broader commodities complex gained ground this week with energy prices firmly remaining in the driver’s seat. With Tehran still blocking the Strait of Hormuz and the U.S. Navy blocking Iranian crude exports, West Texas Intermediate (WTI) and Brent crude prices rallied back near recent highs amid some caution from analysts that several countries may face acute oil shortages soon. Nonetheless, futures prices trimmed weekly gains on Friday’s report of Iran’s latest proposal to Washington. Also of note, U.S. crude exports scored fresh records with global buyers as the globe turns to American producers to offset the supply crunch. Gold prices eased and silver spot prices edged higher. In currencies, yen intervention drove strength in the Japanese currency. The moves came after the yen weakened through the physiologically important 160 yen per dollar threshold as a wide U.S.-Japan rate differential continues to favor the dollar following this week’s central bank decisions. The U.S. dollar weakened.

Economic Weekly Roundup

Fed Rate Decision. In a dramatic twist for Chair Powell, three regional presidents dissented, not over the rate decision itself, but over how it was communicated. Expect additional tension as a new Fed chair attempts to implement a new policy regime.

• The rate‑setting committee kept policy rates unchanged, with one member favoring a 25‑basis‑point cut. No surprise here.
• In an unusual move, three regional presidents objected not to the rate decision but to the implied forward guidance, most likely the use of the word “additional.”
• Unrest in the Middle East remains the primary source of uncertainty for both the growth and inflation outlook.

Economic Data Highlights: Two key points from Thursday morning’s slate of data were the strong contribution from business capex and the warning signs from weakening disposable personal income. Our forecast for Q2 economic growth is below.

• Core PCE accelerated to 3.2% on an annual basis in March, up from 3.0% the previous month. Despite the price shock in March, spending adjusted for inflation rose 0.2% m/m after rising an upwardly revised 0.3% m/m in February. Strong spending contributed to Q1 GDP growth.
• In a related report, the economy grew 2.0% annualized in Q1, with one percentage point contribution coming from consumer spending. I expect a further deceleration in growth in the coming quarters yet still minimal recession risks.

Business investment continues to power the economy. If the late 90s are the pattern, we could expect non-residential investment to contribute to growth for the rest of the year. Slowing income growth will likely impact consumer spending in Q2 and Q3. Looking ahead, we expect Q2 GDP growth to be 1.8% annualized.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Factory Orders (Mar), Durable Goods Orders (Mar final), Capital Goods Orders and Shipments (Mar final)
• Tuesday: Trade Balance (Mar), S&P Global U.S. Services and Composite PMIs (Apr final), ISM Services Index (Apr), New Home Sales (Feb and Mar), JOLTS Jobs Report (Mar), Building Permits (Mar final)
• Wednesday: MBA Mortgage Applications (May 1), ADP Employment Change (Apr), U.S. Treasury Quarterly Refunding Announcement
• Thursday: Challenger Job Cuts (Apr), Nonfarm Productivity (1Q preliminary), Unit Labor Costs (1Q preliminary), Initial Jobless Claims (May 2), Continuing Claims (Apr 25), Construction Spending (Feb and Mar), New York Fed One-Year Inflation Expectations (Apr), Consumer Credit (Mar)
• Friday: Change in Nonfarm, Private, and Manufacturing Payrolls (Apr), Average Hourly Earnings (Apr), Average Weekly Hours All Employees (Apr), Unemployment Rate (Apr), Labor Force Participation Rate (Apr), Underemployment Rate (Apr), University of Michigan consumer sentiment report (May preliminary), Wholesale Trade Sales (Mar), Wholesale Inventories (Mar final)

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1097810

Sell in May and Go Away? Maybe Not

Adam Turnquist | Chief Technical Strategist

Last Updated: April 30, 2026

The sharp rebound from the March lows has pushed most major equity indexes back to record highs. This upside momentum has been fueled in part by signs of de-escalation with Iran and growing expectations that the Strait of Hormuz could reopen soon. While the geopolitical environment remains fluid on a day-to-day basis, markets appear to be assigning a higher probability to a relatively near-term U.S. exit from the Middle East, alongside a normalization in global supply chains that could ultimately pressure oil prices lower.

Heading into month-end, the S&P 500 is up 9.2% as of April 29, putting it on pace for its strongest April performance since 2020. Support for equities has also come from solid first-quarter earnings and economic data that have shown limited signs of deterioration.

However, not all markets are sending the same signal. The physical oil market continues to reflect the risk of a “higher-for-longer” regime, suggesting tighter underlying supply conditions (a theme we explored further in Paper vs. Physical: What Tighter Oil Supplies Could Mean). The fixed income market also paints a similar story of lingering inflation risk as Treasury yields remain uncomfortably high. Although it’s important to note, yields have been less responsive to higher oil prices this month versus last month.

May Seasonality: Weak History, Strong Recent Trends

As the calendar turns to May, seasonal trends re-enter the conversation. Historically, May has been a relatively lackluster month for equities. Since 1950, the S&P 500 has delivered an average return of just 0.4% and finished higher 62% of the time, ranking as the fifth-weakest month of the year when it comes to returns.

More recently, however, the data tells a different story. Since 2013, May has averaged a stronger 1.5% return, with 12 of the past 13 years ending in positive territory. This suggests that while long-term trends remain subdued, recent performance has been far more constructive.

Sell in May and Go Away?

May also marks the beginning of the market’s traditionally weakest six-month period, lending support to the well-known “Sell in May and Go Away” adage. This phrase originated in London as “Sell in May and go away, come back on St. Leger’s Day,” referencing a historic horse race dating back to 1776. The idea suggests investors should step away from equities during the summer months and re-enter the market in November, when conditions have historically been more favorable.

The popularity of this saying likely stems from both its simplicity and the data behind it. Since 1950, the May–October period has produced the weakest six-month returns for the S&P 500, while November–April has been the strongest. Over time, this pattern, combined with the phrase’s widespread recognition, may have contributed to a degree of self-fulfilling behavior in markets.

Still, it’s important to keep this in perspective. While May through October has historically delivered a modest average gain of 2.1%, returns have been positive roughly two-thirds of the time over this period. More recently, performance has been even stronger. Over the past 12 years, median and average returns during this period were 6.3% and 5.1%, respectively, with positive outcomes in 82% of cases.

May–October Returns Tend To Be Underwhelming but Positive

Source: LPL Research, Bloomberg 04/29/26
Disclosures: Past performance is no guarantee of future results. All indexes are unmanaged and can’t be invested in directly. The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of the predecessor index, the S&P 90.

Despite these seasonal trends, LPL Research does not advocate for investors to exit equities during this period. However, ongoing geopolitical uncertainty, particularly surrounding Iran, and its implications for growth and inflation are likely to keep volatility elevated. The reopening of the Strait of Hormuz, while potentially positive, introduces second-order effects that remain difficult to quantify at this stage.

History also supports the expectation of increased volatility in the months ahead. The CBOE Volatility Index (VIX), often referred to as the market’s “fear gauge,” has historically trended higher from July through October, typically peaking in late September or early October. The VIX measures expected 30-day volatility based on S&P 500 options pricing; higher readings generally reflect increased uncertainty and risk aversion.

Volatility Tends To Ramp Up Into the Fall

Source: LPL Research, Bloomberg 04/29/26
Disclosures: Past performance is no guarantee of future results. All indexes are unmanaged and can’t be invested in directly.

Summary

Seasonal patterns can offer useful historical perspective, but they aren’t always a reliable guide for what lies ahead. Market direction will depend more on current forces, particularly geopolitical developments and oil prices, along with key fundamentals such as earnings, economic growth, inflation, the labor market, and monetary policy. An easing of tensions in the Middle East and a pullback in oil prices could provide ongoing support for equities, especially if earnings remain resilient.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1100416

Two Equity Trends That Highlight Diversification

Thomas Shipp | Head of Equity Research
Last Updated: April 29, 2026

Additional content provided by Tucker Beale, Sr. Analyst, Research.

With big tech earnings season kicking off in earnest this week, investors will split their attention between analyzing the latest signals on artificial intelligence (AI) spending plans and the seemingly never-ending peace negotiations with Iran (along with the still closed Strait of Hormuz). While LPL Research will be doing the same attention splitting exercise, we also wanted to take a step back and review two somewhat longer-term performance trends that we find instructive. First, we review the oft-debated asset allocation decision of U.S. versus international equities (and further between developed international equities and emerging market equities). Second, we review two U.S. equity sectors, information technology (I.T.) and energy, that have had the strongest total return performance over the trailing five years, and are two of the three sectors that individually outperformed the broad S&P 500 index (the third being communication services), despite exhibiting fairly low correlation to one another. Each of these look-backs are solely that, historical reviews of performance data, and this blog is not making a call on either trend continuing or reversing. Rather, we point out these trends because (1) we find them interesting given the seemingly myopic focus on U.S. tech stocks, and (2) they remind investors of the importance of diversification within equity allocations.

Last summer, as tariff fears eased and U.S. stocks attempted to re-assert leadership versus international developed market stocks (DM ex U.S.), we wrote about the factors that had driven U.S. stock outperformance over the prior 15 years (2010-2024), which were primarily expanding relative valuation spreads and superior top-line growth. We also highlighted that if international equities outperformed for the rest of 2025, it would be just the fourth calendar year since 2010 to do so. International stocks, from both developed and emerging markets, did in fact outperform U.S. stocks in 2025 and continue to outperform in 2026 year-to-date. The current year’s outperformance for developed market international stocks is small at less than 1%, but emerging markets have outperformed by over 11%. Taken together, international equities (measured by the MSCI All-Country World excluding U.S. Index) are outperforming domestic equities (measured by the S&P 500) so far this year by about 3.5%, excluding dividends. If we look back to the eve of the 2024 election to date, international stocks have outperformed U.S. stocks by ~9%. We home in on the 2024 election given the Trump administration’s “America First” policy posture and the market’s initial reaction to the election, where U.S. stocks outperformed through roughly the end of February 2025. However, as markets began to digest the potential impacts of the administration’s trade policies (i.e., tariffs), the dollar weakened, and the narrative shifted, and international stocks began to outperform. Despite the strong U.S. equity recovery from the “Liberation Day” lows in April through the third quarter, persistent dollar weakness and attractive relative valuations supported international equities through 2025 year-end. As noted, international outperformance has continued in 2026, driven by emerging market equities.

International Equities Have Outperformed U.S. Equities Since 2024 Election Day

Source: LPL Research, Bloomberg 04/28/26
Disclosures: Past Performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly.

Shifting to domestic equity sectors, the trailing five-year performance of the 11 S&P 500 GICS sector indexes reveals a potentially unexpected sector among the leadership: energy. The S&P 500 Energy sector index, dominated by large integrated oil companies such as Exxon Mobil Corp. (Ticker: XOM) and Chevron Corp. (Ticker: CVX), has generated annualized total returns over the trailing five-year period of 23.3% (~184% on a cumulative total return basis). This compares to 20.6% annualized (~155% cumulative) for the S&P 500 I.T. sector index, and 13.0% annualized (~84% cumulative) for the broad market S&P 500 index. Now, the starting point of course influences this look-back, and anyone can have fun with charts and starting points. In April 2021, the energy sector was still trading below its pre-pandemic levels, while the I.T. sector was making new all-time highs. Nonetheless, trailing five-year performance is a common look back period, and the performance is what it is. Note that the above figures are based on total performance, i.e., inclusive of re-invested dividends. Using price-based returns, the energy sector falls slightly behind technology in the trailing five-year lookback (still good for second rank among sectors), given the energy sector’s above average dividend yield over the period.

Energy and Information Technology Best Performing Sectors Over Last Five Years

Source: LPL Research, Bloomberg 04/28/26
Disclosures: Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly.

An interesting point on the sector performance data is that energy has tended to lead during periods of broader market weakness, serving as a useful diversifying asset. Elevated oil and gas prices weren’t always the driver of broader equity market weakness in these periods; in 2022, commodities broadly outperformed as inflation rose, though few would argue commodities drove the rise in inflation, at least initially. Some may point to the Iran war driving the recent outperformance of the energy sector and suggest that energy’s gain is the market’s loss. However, the energy sector was already outperforming before the war and has given back most of the performance it added after the war started. All that’s to say, over the last five years the energy sector has provided investors diversification benefits without sacrificing performance. In fact, during the trailing five-year period analyzed, the energy sector had the lowest correlation of weekly returns of all sectors relative to the broad market as well as to large individual sectors such as I.T., communication services, and consumer discretionary

While we found these trends insightful, we reiterate we are not making a call that any particular trend will either continue or reverse. Analyzing performance data such as these provide investors context for where markets have been, to better understand where they may go in the future and help make the case for diversification within equity portfolios, both by region and sector.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1097805

Paper vs. Physical: What Tighter Oil Supplies Could Mean

Adam Turnquist | Chief Technical Strategist
Last Updated: April 28, 2026

Additional content provided by Brian Booe, Associate Analyst, Research.

With the proverbial ceasefire negotiation can kicked down the road for the second time in a week, the U.S. and Iran remain in a stalemate over the Strait of Hormuz. While equity markets have bounced back this month, seemingly moving on to the more upbeat fundamental and macro backdrop, and crude oil futures have dropped off their March highs, the physical supply squeeze for oil may be somewhat underappreciated by investors. Entering 2026, crude oil over supply was expected to be a headwind for energy prices, but damage to the energy infrastructure and production cuts in the Middle East have accelerated uncertainty around the supply crunch sparked by the Strait of Hormuz closure. For perspective, one-fifth of global supply typically traverses the Strait, but roughly 23,000 outbound kilobarrels of crude oil have passed the waterway since March 1 (just under 1.5 days’ worth, based on the one-year average before the conflict). Early-year oversupply has helped absorb the immediate shock better than feared, while markets still face normalization that could take months.

Headlines have broadly focused on futures prices across the so-called paper market, but what slipped under the radar was a disconnect beginning in mid-March between the physical market. As evidence of the supply squeeze, futures prices remain lower than dated Brent prices (the benchmark for physical oil prices) and have resumed moving higher despite coming back to earth a bit after soaring past $140 per barrel before the U.S.-Iran ceasefire.

Dated Brent and Brent Futures Remain Disconnected

Source: LPL Research, Bloomberg 04/27/26
Disclosure: All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

Considering that the final cargoes that departed the Strait of Hormuz before the conflict arrived at their destinations during the week of April 13, simply securing barrels of crude is rapidly becoming paramount. Japanese refiners have snapped up U.S. oil, Chinese refiners drove shipments from Vancouver to record highs, and India has lifted purchases of Venezuelan oil, and reports indicate traders at some Asian refineries reportedly disregarded price in recent transactions.

Although futures prices may fall following the first headlines of a durable reopening of the Strait, the futures curve suggests a new floor for crude has been set as impacts in the physical market linger, potentially leading to a structural change for energy surrounding a shift from a just-in-time market to one involving a renewed importance in strategic inventory reserves.

What’s the Buzz Around the Petrodollar?

Another hot topic related to the physical oil squeeze has been the so-called death of the petrodollar. However, we don’t believe the petrodollar dynamic (a product of a 1970s U.S. agreement with Saudi Arabia to price oil in dollars, which has fueled capital recycling into U.S. assets) is over. Iran accepting tolls in Chinese yuan sparked angst around the end of the petrodollar, but the idea of a “petroyuan” seems farfetched as a meaningful shift would take years (potentially decades), not weeks or even months. We note the offshore petrodollar may not be as potent during this shock as in the past, given a few factors. One being Gulf States’ shift away from investing in traditional reserve assets (like U.S. Treasuries and dollars) toward sovereign funds buying equities. Another being the Saudis issuing dollar-denominated bonds rather than solely buying them. And of course, reduced Middle East energy sales from the Strait of Hormuz closure. But the U.S. acting as a net exporter will likely keep North American oil flush with onshore dollars.

What About Equities?

What about equities? Well, as evidenced by global market performance since the end of February, the impacts of higher oil prices are not felt equally across the globe. The U.S. has firmly established itself as a net exporter of total petroleum products. This provides domestic equities with relative insulation compared to the rest of the world, and U.S. equities also display less exposure to overseas revenue compared to their global counterparts — likely acting as a buffer from spillover across the Atlantic and Pacific. Developed international markets, however, are more exposed.

As European underperformance during the conflict suggests, higher energy and raw-materials costs may pressure margins, limiting the runway for European earnings growth. Plus, with inflation often “imported” as energy prices rise, market expectations of a European Central Bank and Bank of England rate hike have risen for this summer. Despite the shock being treated as a temporary, near-term inflation disruption by markets rather than a policy regime change, more restrictive monetary policy may challenge the upside potential for European stocks over a tactical time frame.

Japanese equities remain acutely exposed given approximately 88% of the archipelago’s oil imports originate from the Middle East. However, equities have displayed some resilience with the recent rebound in tech shares supporting benchmarks — a similar story to the emerging markets across Asia as exchanges without a sizable technology sector, such as Thailand and Indonesia, have been hampered by oil prices and the supply crunch compared to the tech-leaning markets of South Korea and Taiwan.

Conclusion

This historic energy supply shock does warrant monitoring by investors. Market pricing suggests higher oil prices may linger, and physical markets potentially face a structural shift as supply normalization will take time. However, we don’t believe this spells doom and gloom for the dollar or equity markets. The U.S. dollar index has strengthened since the start of the conflict and its reserve status remains secure. Calls for the end of the petrodollar may be over the top. Given both Washington and Tehran appear committed to holding the temporary ceasefire and working towards an agreement on the Strait of Hormuz, equity trading will likely continue refocusing on fundamentals, leaving the effects from the de facto closure of the waterway an undertone. In the near-term, we expect the U.S. to outperform developed international and emerging markets as tech-driven earnings strength will likely outweigh smaller relative drags from the oil shock.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1097803

LPL Research
Last Updated: April 24, 2026

How To Think About IPOs in 2026

Thomas Shipp | Head of Equity Research
Last Updated: April 23, 2026

Additional content provided by Tucker Beale, Sr. Analyst, Research.

With several high-profile initial public offerings (IPOs) expected in 2026, many investors may be wondering whether buying a stock on its first day of trading is a smart move. Historically, stock performance in the first year post-IPO has been a mixed bag of volatility, with a large minority delivering excess returns in their first year of trading, while a slight majority deliver negative returns. In today’s blog, we analyze data on 30 years of selected IPOs and highlight some recent changes that will likely impact some of the coming year’s largest expected new issues.

Starting with the data, we pulled IPOs from the last 30 years that have traded for at least one year, thus approximately April 1995 to April 2025. We filtered the dataset to only include issuances on the NYSE or Nasdaq exchanges and set a floor on the capital raised in the IPO to $50 million. Finally, we included only IPOs of common stocks, excluding REITs, Master Limited Partnerships (MLPs), and other non-common equity issues. This left us with about 1,500 IPOs over the sample period (1,494 to be exact) that offered up over $600 billion in equity ownership for new issues.

As for performance, we started with a one-year time horizon from the closing price of the first day of trading. We chose the closing price instead of the offer price because ordinary investors rarely have access to the offer price, as the investment banks often allocate much of the shares they have underwritten to large institutional investors. One can quibble with the rationale here, but given typical volatility on the first day an IPO trades, this approach made the most sense. Getting into the findings, starting with one-year price-based returns from the closing price of the first day of trading, the average return generated was 10.5%. You may be thinking that’s not too bad, about in line with equity market expectations. However, averages in this analysis introduce an upward bias, as hypothetically there is no ceiling on the positive returns, but a floor on the losses, as the most an unleveraged investor can lose on an investment is 100%. The range of outcomes in this dataset is very large, and dispersion (volatility) is high; the standard deviation of the one-year returns is 107%. When we measure the median return of the sample, we get a more realistic picture of the potential outcome, a negative return of -4.7%. Interestingly, the middle 50% of outcomes in the distribution are pretty evenly distributed, with the bottom 25^th percentile landing at -38.9%, and the top 25^th percentile coming in at 36.2%. In terms of a simple distribution of the percentage of IPOs that generated positive returns in their first year of trading compared to those that produced negative returns, the split was relatively close, with the percent positive (46.1% of the sample, producing an average return of 68.7%) slightly below the percent negative (53.9% of the sample, producing an average return of -39.2%). So slightly skewed to the downside, with a very wide distribution of outcomes in the tails.

The large standard deviation tells the story of the variation of outcomes at the finish line, but what about the journey to get there? For that, we calculated the maximum drawdown experienced in the first year of trading for every IPO in our sample. The average drawdown experienced was -48.9%, and the distribution for this dataset was much less volatile than the average one-year return, with the median drawdown coming in at -48%, with a standard deviation of 22%. Said another way, while the variation of outcomes was wide, the variation in the journey was much more similar; that is, it was typically a pretty volatile ride regardless of the ending outcome.

One final bit of data analysis we took on was comparing the one-year returns of the IPO data set to the returns of the S&P 500 based on each IPO’s one-year return window. This allowed us to somewhat normalize the outcomes based on how the broad market performed in the year. We get a slightly more negative outcome, with the average difference in performance coming in at 2.4%, with the median performance difference coming in at -12.5%. The volatility in the distribution was similar, as would be expected. The percentage of IPOs that outperformed the S&P 500 was slightly below the percentage that produced positive returns, with just 40.6% producing one-year returns above the S&P 500 during the first year of trading, while 59.4% underperformed. Finally, in terms of drawdowns, only 6.7% of IPOs in the sample (56 total) experienced a less severe drawdown than the S&P 500 during the one-year period. Diversification does its job yet again.

Understanding why these outcomes occur can help investors avoid common pitfalls and better time entry into newly public companies. IPOs have historically had a few things working against them. First, both management and the investment bank or banks involved in the IPO have a vested interest in maximizing the company’s valuation. Whether driven by hopes and dreams or strong fundamentals, higher valuations imply a higher hurdle for future earnings to keep investors excited and engaged. Taking a private company public also creates a liquidity event for existing shareholders. Insider ownership stakes may be sold on the exchanges after a pre-determined lockup period, which adds to expected selling pressure post-IPO. Compounding all of this from the perspective of retail investors is limited access to the initial offering price. The benefit of any pop in price during the initial hours of trading generally accrues to institutional investors that received allocations from the underwriting investment bank(s).

While these historical patterns are important, they may not be a perfect guide for the upcoming wave of large IPOs. Structural changes in how indexes handle new listings could alter the typical post‑IPO experience.

IPOs also traditionally face hurdles for index inclusion. These requirements vary across indexes but generally include float minimums and a minimum amount of time trading on the exchanges for “seasoning” to ensure stability and liquidity requirements are met. This seasoning period delays the mechanical buying associated with index inclusion when passive funds are forced to buy to mimic the index. In response to heavy lobbying from management teams at large private companies expected to IPO this year, index providers are loosening constraints to speed up index inclusion under the guise of ensuring indexes “are more representative of the U.S. equity market sooner” (FTSE Russell Market Consultation, February 2026).

The takeaway for investors is not to avoid IPOs altogether, but to approach them thoughtfully. As seen in the analysis of 30 years of IPO data, there have been a wide range of outcomes, with some massive home runs driving up the average returns, and many strike outs pulling the median measure of one-year returns lower. We suggest investors proceed with any IPO investment with caution and expect to experience a great deal of volatility.

LPL Financial prohibits the purchase of equity IPOs within client accounts.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1097686

Seven Takeaways from Warsh Confirmation Hearing

Dr. Jeffrey Roach | Chief Economist
Last Updated: April 22, 2026

Kevin Warsh’s bid to become the next chair of the Federal Open Market Committee (FOMC) unfolded amid sharp political tension, legal uncertainty, and pointed questions about his independence from President Trump. During a combative Senate confirmation hearing, Warsh sought to reassure lawmakers that he would not allow political pressure to dictate monetary policy, even as unresolved Justice Department investigation into current Chair Jerome Powell threatens to delay his confirmation and underscores broader concerns about the politicization of the central bank.

Kevin Warsh’s confirmation hearing comes at a moment when U.S. monetary policy is already notably restrictive relative to most other advanced economies, sharpening the political and market sensitivity around the Federal Reserve’s (Fed) next steps.

U.S. Policy Rate Highest Among the G-7

Source: LPL Research, Bank of Canada, Bank of England, Bank of Japan, European Central Bank, Federal Reserve Board, 04/22/26

As of April 21, 2026, the Fed’s target range for the federal funds rate stands at 3.50% to 3.75%, well above policy rates at many peer central banks, including the European Central Bank’s 2.15% policy rate, the Bank of England’s 3.75% Bank Rate, the Bank of Canada’s 2.25% overnight rate, and the Bank of Japan’s 0.75% policy rate. That gap has become central to the political debate surrounding Warsh’s nomination, with President Trump arguing that U.S. rates should be “the lowest in the world,” even as global counterparts face different inflation dynamics, energy shocks tied to Middle East tensions, and divergent growth outlooks. Against this backdrop, lawmakers used the hearing to test whether Warsh would prioritize narrowing the international rate divergence through faster U.S. easing — or adhere to the Fed’s traditionally data-driven approach despite mounting external and political pressure.

Here are 7 Key Takeaways

1. Warsh Emphasizes Fed Independence
Warsh repeatedly stated that he would not cut interest rates at President Trump’s behest, insisting that Trump never asked him to pre-commit to any specific policy actions and pledging to remain “strictly independent” if confirmed.

2. Political Pressure on the Fed Is Intensifying
Lawmakers highlighted that Trump’s actions have gone beyond rhetoric, including an effort to remove Fed Governor Lisa Cook and a Department of Justice (DOJ) investigation into Powell, both of which have raised alarms about threats to institutional independence.

3. DOJ Investigation Could Delay Confirmation
A criminal investigation into Powell’s handling of the Fed’s headquarters renovation has become a procedural roadblock, as Senator Thom Tillis has vowed to block Warsh’s confirmation until the probe is resolved.

4. Powell Could Remain Chair Temporarily
If Warsh is not confirmed by May 15, Powell has said he would continue serving as chair on an interim basis, adding uncertainty to the Fed’s leadership at a sensitive time for monetary policy.

5. Scrutiny of Warsh’s Shift on Inflation and Rates
Democrats pressed Warsh on his evolution from an inflation hawk during his previous tenure at the Fed to a recent advocate for rate cuts, a shift he justified by pointing to balance sheet reduction and potential productivity gains from artificial intelligence.

6. Criticism of Fed Policy Framework and Communication
Warsh argued that persistent inflation overshoots reflect Fed policy errors during 2021–2022 and called for “regime change,” including a new inflation framework and less forward guidance such as scaling back the Fed’s “dot plot.”

7. Personal Wealth and Financial Conflicts Raised Concerns
Senators, particularly Elizabeth Warren, questioned Warsh about his substantial personal wealth and opaque investment holdings. Warsh pledged to divest all financial assets and move to “plain vanilla” investments if confirmed.

Bottom Line

Warsh’s confirmation hearing underscored how deeply debates over Fed independence, inflation credibility, and political influence have become entangled. Even as he sought to project autonomy and a reform-oriented vision for monetary policy, unresolved legal investigations and partisan tensions threaten to delay his path to confirmation. The outcome may not only determine Warsh’s future but also shape how markets and the public perceive the Fed’s ability to operate independently in an increasingly politicized environment. As it relates to interest rate expectations, the hearing strengthens the view that Warsh may tighten conditions via balance sheet normalization while simultaneously loosening conditions by lowering interest rates. These actions may not occur until much later this year as conditions warrant.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1094469

LPL Research examines whether rising U.S. debt threatens Treasuries’ safe-haven status, and why investor demand remains resilient.

Lawrence Gillum | Chief Fixed Income Strategist
Last Updated: April 21, 2026

Concerns about the sustainability of U.S. fiscal policy have moved back into the investment spotlight. Over the past week, both multilateral institutions and prominent policymakers have raised warnings about the potential implications of America’s expanding debt burden for Treasury markets. While these concerns are directionally valid, we believe recent calls suggesting a structural loss of appeal for U.S. Treasuries are premature and risk overstating near-term risks.

Rising Debt Issuance and the IMF’s Warning

The International Monetary Fund (IMF) cautioned last week that the accelerating pace of U.S. Treasury issuance may be eroding the premium traditionally afforded to U.S. government securities. As evidence, the IMF pointed to a narrowing spread between yields on AAA-rated corporate bonds and U.S. Treasuries, implying diminished relative demand for sovereign debt.

Separately, former Treasury Secretary Hank Paulson echoed these concerns, suggesting U.S. authorities should prepare contingency plans to address a potential future collapse in Treasury demand driven by investor anxiety over the federal debt trajectory.

There is little debate that U.S. debt dynamics are troubling. Deficits remain large, interest costs are rising, and issuance is likely to continue at elevated levels. However, extrapolating these concerns into a near-term loss of Treasury market credibility or safe-haven status is, in our view, a step too far.

Treasury Yields: Elevated, But Not Abnormal

A basic starting point is the level of Treasury yields themselves. At roughly 4.25%, the 10-year Treasury yield sits close to its long-run historical norm. Since 1880, the 10-year yield has generally oscillated within a roughly 3–5% range, with notable deviations only during distinct monetary regimes: the inflationary excesses of the 1970s and early 1980s, followed by the structurally depressed yields of the post–Global Financial Crisis zero-interest-rate era.

Seen through this longer historical lens, today’s yield levels do not signal investor capitulation or an extraordinary risk premium tied to fiscal fears. Instead, they reflect normalization from an unusually suppressed rate environment.

Historically, 3–5% Has Been “Normal”

Source: LPL Research, Bloomberg 04/20/26
Disclosures: Past performance is no guarantee of future results.

Corporate Spreads and a Misleading Comparison

The IMF’s focus on the narrowing spread between AAA-rated corporates and Treasuries deserves closer scrutiny. As we discussed in our October 2025 Rate and Credit View, “Can Investment-Grade Corporate Bonds be the New Risk-Free Asset?,” tight investment-grade spreads are largely a function of elevated all-in yields and persistent institutional demand for income-producing assets. Many large buyers — insurance companies, pensions, and asset managers — are focused less on spread levels and more on total yield and balance sheet efficiency.

Moreover, the comparison itself is imperfect. There are currently only two AAA-rated corporate issuers remaining, making broad conclusions based on this cohort somewhat “apples to oranges.” The scarcity value of top-rated corporate paper, combined with structural demand from liability-driven investors, has compressed spreads independently of Treasury supply dynamics.

Auction Performance and Foreign Demand

It is also worth separating “less-than-stellar” Treasury auctions from outright dysfunction. Recent auctions have occasionally been soft at the margin, but coverage ratios and bid-to-cover metrics do not suggest a market that is failing to clear. Importantly, Treasury International Capital (TIC) data released last week showed that foreign demand for U.S. Treasury securities remains robust, undermining the argument that global investors are meaningfully turning away from U.S. government debt. In periods of genuine loss of confidence, foreign official and private-sector demand would be expected to decline sharply. That is not what the data currently shows.

Acknowledging the Long-Term Risk — Without Overreacting

None of this is meant to dismiss the broader concerns surrounding U.S. fiscal sustainability. The trajectory of deficit spending and debt accumulation is unsustainable over the long run, and higher issuance will continue to exert upward pressure on term premiums over time.

However, structural risk and imminent crisis are not the same thing. Treasuries continue to function as the global risk-free asset, anchoring pricing across capital markets and serving as the foundational collateral of the global financial system. That status does not disappear simply because supply is rising.

The Bottom Line: It’s About Price, Not Viability

Despite a growing mountain of debt and rising interest costs, the U.S. government is not on the brink of financial collapse, nor is the Treasury market at risk of losing its haven status in any fundamental sense. As long as Treasuries are treated as risk-free assets — legally, institutionally, and operationally — there will be buyers, and deficits will be financed.

The more relevant question is not whether Treasuries will be bought, but at what price. To date, the evidence suggests that investors have not balked at current prices. Concerns about U.S. debt are real, and deserve attention — but declarations of the end of Treasury exceptionalism remain, for now, exaggerated, in our view.

As well, despite the ongoing conflict in Iran, market-based indicators do not currently suggest rising stress in the Treasury market. Interest rate volatility, as measured by the MOVE index, spiked sharply at the onset of the conflict but has since retreated to levels below those observed prior to the war. Similarly, the Treasury term premium — the additional compensation investors demand to hold longer‑dated Treasury securities — is hovering near its average level over the past year and remains well below recent highs.

Historically, the combination of declining interest rate volatility and a subdued term premium is consistent with a market environment characterized by increasing confidence in central bank policy, diminished recession risks, and adequate market liquidity. Put differently, investors are currently requiring less compensation to hold long‑term Treasuries because they perceive a lower probability of extreme rate volatility or sustained inflation surprises.

All that said, given the considerable uncertainty surrounding the depth, duration, and potential spillover effects of the Iran conflict, markets may be underpricing upside risks to the 10‑year Treasury yield. As a result, while Treasuries continue to function as a core portfolio anchor, we remain neutral on duration relative to benchmarks.

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

This research material has been prepared by LPL Financial LLC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #1094468