Key Takeaways
- US GDPNow Q2 growth estimate debuts at a robust 3.70%, signaling continued economic resilience despite high interest rates.
- US oil demand reached a peak in February, hitting its highest level since August 2025 as cold weather and trucking activity drove consumption.
- Mortgage rates climbed again, with the 30-year fixed rate rising to 6.30%, adding pressure to the spring housing market.
- European markets posted strong gains, led by Britain’s FTSE 100 (+1.55%) and Germany’s DAX (+1.33%) following central bank commentary.
- Geopolitical tensions intensified as the US delivered 6,500 tons of military equipment to Israel within 24 hours amid ongoing regional conflicts.
The US economy is showing unexpected strength at the start of the second quarter, with the Atlanta Fed’s GDPNow model providing an initial estimate of 3.70% for Q2 growth. This optimistic outlook comes as the SPDR S&P 500 ETF Trust (SPY) and broader markets react to a "sensible" market response to central bank policy, according to Bank of England Governor Andrew Bailey. Bailey’s comments followed the BoE’s decision to hold rates at 3.75% in an 8-1 vote, suggesting that while inflation risks remain due to Middle East volatility, the current restrictive stance is appropriate.
In the energy sector, the Energy Information Administration (EIA) reported that US demand for crude oil and petroleum products surged in February to its highest level in six months. This spike was largely driven by extreme cold in the Northeast and a significant increase in trucking demand. Meanwhile, internal friction within OPEC is mounting as the UAE reportedly acts as a counterweight to Saudi Arabia, pushing to raise output to monetize new capacity while the Kingdom seeks to maintain production cuts to support prices.
The housing market continues to face headwinds as Freddie Mac (FMCC) reported that 30-year fixed-rate mortgages rose to 6.30% for the week ending April 30, up from 6.23% the previous week. The 15-year fixed-rate mortgage also saw an uptick to 5.64%. Despite the rise, economists noted that purchase demand has remained surprisingly resilient, with applications still trending significantly higher than last year’s levels.
Geopolitical developments remain a critical focus for investors as the US Defense Department completed a massive logistics operation, delivering 6,500 tons of munitions and equipment to Israel in a single day. This comes as Lebanon’s Information Minister clarified that the country has not yet entered direct negotiations with Israel, remaining instead in a "preparatory" phase. Simultaneously, the UAE Attorney-General has referred 13 defendants and six companies to the State Security Court for allegedly attempting to ship military materials to Sudan, highlighting the UAE's strict stance against illicit arms trafficking.
Global equity markets reflected a risk-on sentiment today, with major European indices closing sharply higher. France’s CAC 40 rose 0.45% and Spain’s IBEX gained 0.72%, while the FTSE 100 and DAX outperformed. Investors appear to be balancing the strong US growth data against persistent geopolitical risks and the "active hold" strategy currently favored by global central banks.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.