During their first-quarter earnings calls, major Wall Street leaders, including JPMorgan's Jamie Dimon, Goldman Sachs' David Solomon, and Citi's Jane Fraser, expressed caution about the U.S. economy. Despite suggesting potential drops in inflation and interest rates and a continued economic growth that could avoid a recession, they emphasized the serious threats posed by ongoing high inflation, elevated borrowing costs, the risk of a painful economic downturn, and the impact of international conflicts. BlackRock's Larry Fink and Blackstone's Steve Schwarzman also highlighted the prevailing sense of fear and uncertainty in the markets.

Gold prices experienced a significant drop of 2.4%, falling to $2,354.10, marking the most substantial one-day decline in over a year as geopolitical tensions lessened and investors moved towards higher-risk assets like stocks. This shift in investment preference reflects a broader market reevaluation following a temporary peak where the front-month gold for April delivery reached a record high of $2,398.40 just last Friday. Ricardo Evangelista, a senior analyst at ActivTrades, noted that the easing of tensions in the Middle East is prompting a renewed focus on the resilience of the U.S. economy and ongoing inflation concerns.

Oil prices declined as the geopolitical risk premium associated with Middle East tensions began to diminish, with Brent crude sliding to near $86 a barrel after experiencing its most significant drop since early February last week. This trend coincides with a decrease in demand for safe-haven assets like gold. The market has stabilized somewhat after volatile trading last Friday, following Iran's minimization of Israel's retaliatory actions to its drone and missile strike. Meanwhile, the U.S. House has recently passed new sanctions targeting Iran's oil sector, with expectations that the Senate will soon follow suit. Additionally, the U.S. has approved more funding to support Ukraine amidst its ongoing conflict with Russia.

In the U.S., lower-income borrowers are increasingly unable to meet their loan obligations, prompting banks to tighten credit availability for products like credit cards and car loans. This financial strain is partly due to dwindling savings and persistent high interest rates which are exacerbating the budget constraints of households earning under $45,000 annually. The situation is starkly different for higher-income groups, who continue to demonstrate financial resilience. Austan Goolsbee of the Chicago Federal Reserve and Arijit Roy of U.S. Bancorp highlighted concerns about rising consumer delinquencies and default rates, especially among first-time and low-income borrowers, signaling potential worsening economic conditions.