As expected, the Federal Reserve left its fed funds target unchanged at 3.5%-3.75%. We think this level -- down 175 basis points (bps) from the summer of 2024 but up from the 0% level during the pandemic -- will prevail at least through year-end as the new Fed chairman, Kevin Warsh, settles in. Economic conditions have changed since Warsh's name first came up as a potential central bank leader. The war in Iran has sent oil prices skyrocketing, and inflation expectations are on the rise. Meanwhile, the other element of the Fed's dual mandate -- the unemployment rate -- has remained low as nonfarm payrolls have trended higher. Chairman Warsh was appointed by President Trump, who was highly critical of former Fed chair Jerome Powell and pushed aggressively for lower rates. We don't have the sense that Chairman Warsh is under the same pressure to cut the rates, which is a positive development for the critical concept of the Fed's independence. To that end, Chairman Warsh rolled out five new task forces: Communications, Balance Sheet, Data, Productivity & Jobs, and AI. The work of these task forces may well shift the focus away from changes to the fed funds rate, at least in the near term. We recently altered our fed funds year-end target and no longer anticipate a rate cut in 2026. Depending on the outcome of the pending truce in Iran, oil prices could resume their downward trek, easing inflation pressures. If that's the case, the Fed may be in position to lower rates in a year or so.

The first-quarter earnings season has been sensational. Many companies knocked it out of the park when delivering earnings and revenue numbers that well beyond expectations. With reports now in from about 96% of S&P 500 companies, earnings have climbed a staggering 29% from last quarter. Information Technology, up 56%, and Communication Services, up 51%, have led the pack. At the bottom are Healthcare, down 3%, and Energy, down 1%. With earnings season essentially over, we have had a chance to look at trends. In particular, we watch for companies that raised guidance as we view that action as a likely catalyst for market-beating returns in the quarters ahead. It's even harder for companies to raise guidance during uncertain economic times, as vision is murky. The following is a partial list of companies in Argus' Fundamental Universe of Coverage where management raised its outlook during the 1Q26 reporting season.

General Motors, one of the world's largest automakers, traces its roots back to 1908. GM and its strategic partners produce cars and trucks in 31 countries and sells and services these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. The company emerged from bankruptcy in July 2009 and went public through a new share offering in November 2010. General Motors is a component of the S&P 500, and the company employs approximately 162,000 people.

Stocks are higher at midday on Friday, with a healthy newsflow that includes earnings reports, a non-farm payrolls report that significantly beat expectations, and an update on consumer sentiment that showed consumers are feeling pain at the pump. Indeed, the University of Michigan's survey was at the lowest level on record.