Despite another strong week of corporate earnings announcements, U.S. equity markets took a pause from their year-to-date surge last week as market participants digested the announcement of President Biden’s proposal to increase the capital gains tax rate for high income households and monitored concerning global trends in Covid-19 cases. The major U.S. equity indices ended the week in the red but recouped most of their losses on Friday following robust economic data including indications of growing demand for the U.S. service sector and a 20% month-over-month increase in new home sales in March. The S&P 500 ended -0.1% lower for the week and the Dow Jones and Nasdaq Composite were down -0.4% and -0.3%, respectively.

All three major market indexes had weekly gains last week, with the major banks driving a good start to the first quarter earnings season. Investors appear to be focusing on the economic recovery despite mounting concerns about new COVID-19 variants, while many of the tech and growth stocks that have long been market favorites showed a resurgence in price and sentiment.

U.S. equity markets continued to push higher this past week as the economic growth outlook lifted further on the back of the strong March employment report and positive service sector data. For the week, the S&P 500 notched its third consecutive weekly gain with a 2.8% return, while the Dow Jones and Nasdaq Composite advanced by 2.0% and 3.1%, respectively.

The holiday-shortened week saw tech stocks back in favor after a first quarter where cyclical and value plays led the market. The Nasdaq, which trailed the major averages in Q1, gained 2.6% for the week, topping the S&P’s gain of 1.4% and the Dow, up 0.2%. Stocks are off to a solid start this year, but the performance of the major indexes has been decidedly uneven.

Despite an eventful week with a large segment of global trade stalled by a massive cargo ship stuck in the Suez Canal and the unwinding of an overleveraged hedge fund, equity markets broadly were undeterred with the S&P 500 and Dow Jones pushing to new all-time highs last week. Positive investor sentiment was aided by encouraging news on the vaccine rollout and the Federal Reserve’s decision to end restrictions on dividends and buybacks for U.S. banks.