The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI and vaccines) and services (such as Zoom calls and Netflix), as well as moving into new markets (clean energy, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was almost $31.5 trillion at the end of 2025. That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

Last week featured a strong move higher for stocks, but the basis for much of that move - the reopening of the Strait of Hormuz - was thrown into doubt by geopolitical headlines over the weekend. One thing is for certain: there is no certainty about anything related to the war in Iran. And uncertainty is one of Wall Street's least favorite catalysts. Throw in the now-roaring earnings season, and volatility seems more likely than not. Last week, the Dow Jones Industrial Average gained 3%, the S&P 500 rose 5%, and the Nasdaq was higher by 7%. Year to date, all three indices have reversed and are now in positive territory, with the DJIA up 3%, the S&P higher by 4%, and the Nasdaq ahead by 5%. On the earnings calendar, about 400 companies will report this week. Highlights include General Electric, UnitedHealth Group, RTX Corp, Northrop Grumman, United Airlines, and Intuitive Surgical on Tuesday; Tesla, GE Vernova, Phillip Morris, IBM, Texas Instruments, AT&T, and Boeing on Wednesday; Intel, American Express, Lockheed Martin, and Comcast on Thursday; and Procter & Gamble on Friday. On the economic calendar, it's a fairly light week. Retail sales will be reported on Tuesday and consumer sentiment on Friday. Next week includes a Fed rate meeting. The impact of the war is starting to show up in economic forecasts. In no particular order, regular gas is at an average of $4.12 per gallon; the Atlanta Fed GDPNow forecasts 1.3% GDP growth in the first quarter (down from 3.0% about a month ago); and the Cleveland Fed Inflation Nowcast calls for CPI of 3.6% in April (up from 3.3% in March). Meanwhile, mortgage rates moved lower last week, down seven basis points last week, with the average 30-year fixed-rate mortgage now at 6.30%, according to FreddieMac. The next Federal Open Market Committee (FOMC) meeting is on April 29. Odds are at zero for any change in rats. President Trump's nominee to be the next Fed chairman, Kevin Warsh, continues to his way through the Congressional approval process. Taking a deeper dive into performance so far in 2026, a leading industrialized global stock market index, the ETF EFA, is up 8% year to date. The leading emerging market ETF (EEM) is up 16% year to date. U.S. growth stocks are flat year to date when looking at ETF IWF, while value stocks (IWD) are up 7%. As of the end of last week, crude oil had pulled back from its high of $110 back on April 7 and closed Friday at $83 per barrel, up 43% for the year to date. As discussed above, that is likely to swing wildly based on news out of the Middle East. In other asset classes for the year to date, AGG bonds are flat, gold is up 11%, and Bitcoin is down 12%. The U.S. dollar is flat, tracking DXY. The VIX Volatility Index was about 17 on Friday, below its historical average of 20. Turning to sector performance and using the State Street SPDRs, the list from first to worst so far in 2026 is Energy (+24%), Materials (+15%), Industrials (+12%), Real Estate (+9%), Utilities (+8%), Information Technology (+7%), Consumer Staples (+6%), Communication Services (+1%), Consumer Discretionary (+1%), Healthcare (-4%), and Financials (-4%). By comparison, the S&P 500 is up 4% year to date.

Charles Schwab is a leading provider of financial services, with about 39 million active brokerage accounts and $11.8 trillion in client assets. The company offers wealth management, securities brokerage, banking, money management, and financial advisory services to individual investors and independent investment advisors.

Charles Schwab is one of the largest retail-oriented financial-services companies in the US, with $11.9 trillion in client assets across its brokerage, banking, asset management, custody, financial advisory, and wealth-management businesses at the end of 2025. While best known for its retail brokerage offering, Schwab generates the lion’s share of its revenue and profits through its Charles Schwab Bank and asset management segments. The firm is a dominant player in Registered Investment Advisor(RIA) custody, with over 40% market share, and has recently pushed into wealth management with robo-advisory, direct indexing, and other managed-investment solutions.