De-escalation in the Middle East, strong Q1 earnings momentum, and resilient U.S. economic activity in the face of high energy prices continued to push stocks higher this week. Near-term, the détente in the Persian Gulf has reduced economic uncertainty allowing traders to focus back on fundamentals and improving consumer purchasing power as we head into the busy summer travel season.
Economic Highlights:
- Tax refunds kept consumers spending in March despite higher prices at the pump due to the Iranian conflict. Retail sales rose 1.70% month-to-month, up from February’s 0.70% gain. The increase was driven by a 15.50% jump in gas station receipts, their largest gain since the government started tracking the series in 1992. However, core retail sales, which exclude autos, gasoline, building materials and food services rose a still healthy 0.70% in March, up from 0.60% the prior month.
- The services and manufacturing sectors expanded in April. The Flash Services PMI increased to 51.3, up from 49.8 in March. Numbers above 50 indicate expansion while those below signal contraction. A rise in new business helped push the services industry into expansion. Meanwhile, the S&P Flash Manufacturing PMI increased to 54 in April, up from 52.3 the prior month. The rise was driven in part by inventory accumulations due to concerns over supply availability and price hikes. In April, average prices charged for goods and services rose at the fastest rate since July 2022.
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The revised consumer sentiment index suggests consumers are feeling more confident in their financial health and the broader economy than initially reported. The consumer sentiment index was revised up to 49.8 from the initial 47.6 reading. Upwardly revised readings for current economic conditions and consumer expectations drove the increase. However, it was still below the 53.3 reading in March as the Iran war added uncertainty to consumers’ outlook.
Stay Calm and Invest On
Stocks hit more all-time highs this week on a Middle East ceasefire extension, another solid round of corporate earnings, and a healthy shot of economic data. With hours to spare until the two-week U.S-Iran ceasefire was set to expire, the Trump administration announced an indefinite extension. The administration cited a “seriously fractured” Iranian government that is making it difficult to work out a peace deal. The extension would give Iranian negotiators more time to hammer out a unified proposal for talks to resume with Washington. On Friday, reports indicated an Iranian delegation is set to hold talks with Pakistani mediators. If successful, that could potentially set the stage for a second round of negotiations between the U.S. and Iran. Wall Street took the latest developments optimistically, believing that the bias still leans toward de-escalation. The indefinite pause allowed investors to turn their attention in earnest to earnings season and economic data. The earnings season is shaping up to be a strong one with Q1 2026 earnings now expected to rise 16.10%. Surprisingly, it’s not all tech driven with 9 of 11 sectors in the index expected to see an improvement in earnings relative to Q1 2025. On the economic front, the U.S. economy showed continued signs of steadiness despite the drag from oil prices. Larger tax refunds gave consumers the confidence to continue to spend while services and manufacturing remained in expansion.
The S&P 500 and Nasdaq Composite managed another winning week as the pieces seemed to be falling into place with relative calm holding in the Middle East, better than expected corporate earnings being reported, and the U.S. economy still chugging along. Any material progress in U.S.-Iran negotiations could further boost sentiment and stocks. Stocks have rallied throughout April, leaving the S&P 500 trading at 20.8 forward P/E. While expensive in historical terms, it does place it near a one-year low and the 22 times earnings it was trading at earlier this year. If a breakthrough were to occur in the peace talks and energy were to start flowing again, consumers could power a strong summer spending season.
The Week Ahead
It’s a big week for markets with the FOMC interest-rate decision, Q1 GDP, and personal income and spending on tap.
Surprising Components of Modern Prenups
An article in yesterday’s Wall Street Journal shared some of the surprising clauses that couples are including in prenuptial agreements. A prenuptial agreement, commonly referred to as a prenup, is a legal document signed before a couple marries. It details how financial assets and responsibilities, such as real estate, investments, retirement benefits, and other assets will be divided in the event the marriage ends in divorce or death. Depending on how a prenup is approached, it can be positive tool for wealth and asset protection for both parties. Since money issues are one of the leading causes of divorce, having these conversations before getting married can help build the foundation for a stronger and long-lasting union. Additionally, a prenup can help reduce the possible emotional and financial turmoil that may follow the dissolution of a marriage.
A prenup requires each party to fully disclose assets, debts, and in some cases, potential inheritances. Each party must also retain their own attorney to represent them. Without a prenup, state law decides how marital property gets divided, and the default rules may not match what either spouse actually wants.
Prenups have generally been viewed as tools of the uber wealthy, but they are growing more and more popular. According to a survey by Harris Poll in 2023, about one in five adults who are either married or engaged had a prenuptial agreement. The share was higher among younger adults who were engaged or had been married: 41% of Gen Z respondents (individuals born between 1997 and 2012 who are now in their teens and 20s) said they had signed one, as did 47% of millennials (born from 1981 to 1996 and in their late 20s to early 40s).
Couples today are realizing the financial realities of both marriage and divorce and many would rather discuss these sensitive topics before the wedding than after. Others are tying the knot later in life after they have accumulated their own assets. It’s important to note that a prenup isn’t a replacement for an estate plan in the event one partner passes away.
The article in The Wall Street Journal shared some interesting components of a modern prenup. The content below has been edited to include some of the highlights. The full article is available here.
Embryos
More than one million embryos are currently in storage in the U.S., according to the American Society for Reproductive Medicine. Couples are increasingly addressing custody of frozen embryos in prenups, including who has a right to those embryos and under what circumstances the embryos may be discarded.
The trust fund
Trusts and prenups are both useful tools to protect wealth, but they operate through completely different mechanisms. Trusts are legal arrangements where ownership of assets are transferred to a trustee who manages them for the benefit of people designated as beneficiaries. Trust assets are generally considered the separate property of the beneficiary spouse. However, if trust distributions are deposited into a joint bank account, used to pay the mortgage on a shared home, or otherwise mixed with marital funds, they can lose that separate status. In that case, a court may treat them as marital property subject to division. A prenup can explicitly classify trust distributions as separate property, closing that loophole.
Dividing assets
When one spouse earns a lot more than the other, the couple may structure their prenup so that they divide the first $1 million that the higher earner makes after their wedding. After the first $1 million, the higher earning partner might keep $2 out of every $3 that he or she makes, rather than splitting that higher salary down the middle.
The Wall Street Journal reports that some prenups may include a couple’s agreement on lump-sum payments to occur at the time of divorce based on how long they were together. For ultra-high-net-worth couples, these payments can go up to $1 million a year or higher.
Lawyers caution against prenups that bar the less wealthy spouse from building joint assets during the marriage. Those terms can create dependency rather than a real choice to stay and are vulnerable to being challenged in court.
“Petnups”
According to a MetLife Pet Insurance survey of 1,000 Americans last year, nearly half of pet owners said they would sign a “pet prenup” that laid out how they would share responsibilities for their pets if they split, such as how to handle physical custody, veterinarian costs, pet food costs, and pet medicine.
Nondisclosures
Including non-disclosure language can help keep financial details private. Couples are including this language in their prenups to prevent both parties from disclosing confidential financial information.
As mentioned, a prenup is not a substitute for an estate plan. Both prenups and estate plans should be reviewed every three to five years or as often as circumstances dictate and to ensure continued alignment between the two. Individuals who are already married can still draft a postnuptial agreement (or postnup), which is an agreement a married couple can enter to outline the ownership of financial assets in the event of a divorce or death. Like a prenup, each party must have an opportunity to retain legal counsel, there can be no fraud or coercion, there must be full disclosure of financial assets, and the terms must be fair and reasonable at the time of execution and in the event of a divorce.
Source: Brown, Dalvin and Banerji, Gunjan. (2026, April 23). The Cost of Divorce: Seven Surprising Clauses Couples Are Putting Into Their Prenups. Wall Street Journal.