Stocks Surge on Signs the US and Iran Seek to End War

The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +2.91%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +2.49%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +3.43%.  June E-mini S&P futures (ESM26) rose +2.88%, and June E-mini Nasdaq futures (NQM26) rose +3.42%.

Stock indexes rallied sharply on Tuesday in hopes that an end to the Iran war is near.  The Wall Street Journal reported Tuesday that President Trump signaled he was willing to end the US military campaign against Iran even if the Strait of Hormuz remains closed.  The report said Mr. Trump believes the US should wind down hostilities while pressuring Iran diplomatically to reopen the Strait.  If that fails, the US will press allies in Europe and the Gulf to take the lead on reopening the waterway.  US and Israeli forces pressed ahead with attacks on Iran on Tuesday, while Iran hit a Kuwaiti oil tanker off Dubai in a drone attack, and the UAE reported a drone attack. 

Stocks added to their gains, and crude oil prices tumbled Tuesday afternoon after Iran signaled openness to resolving the war.  Iranian President Masoud Pezeskhian said his country had the "necessary will to end this war," provided that hostilities end on all fronts and that Iran's sovereignty over the Strait of Hormuz is recognized.

Falling bond yields are also supportive of stocks, as the 10-year T-note yield dropped to a 1-week low of 4.28% on Tuesday.  Bond yields declined amid hopes that an end to the Iran war will lower energy prices, easing inflation concerns.  Stocks also found support on Tuesday after the US Mar consumer confidence index unexpectedly rose.

The US Jan S&P CaseShiller composite-20 home price index rose +1.18% y/y, weaker than expectations of +1.38% y/y and the smallest pace of increase in 2.5 years. 

The US Mar MNI Chicago PMI fell -4.9 to 52.8, weaker than expectations of 55.0.

The Conference Board US Mar consumer confidence index unexpectedly rose +0.8 to 91.8, stronger than expectations of a decline to 87.9.

US Feb JOLTS job openings fell -358,000 to 6.882 million, weaker than expectations of 6.890 million.

Hawkish comments on Tuesday from Kansas City Fed President Jeff Schmid were negative for stocks, as he said he's "more focused on the risks to inflation at this time" and that he's concerned inflation will get stuck closer to 3% as the recent surge in energy prices will likely feed through to core inflation.

Signs of strength in China’s economy are supportive for global growth prospects and stocks.  The China March manufacturing PMI rose +1.4 to 50.4, better than expectations of 50.1 and the strongest pace of expansion in a year.  Also, the China March non-manufacturing PMI rose by +0.6 to 50.1, better than expectations of 49.9.

Crude oil prices (CLK26) fell from a 3-week high on Tuesday but remain supported despite President Trump signaling he is willing to end the war with Iran, as the Strait of Hormuz remains effectively closed.  The closure of the Strait of Hormuz, through which about a fifth of the world’s oil and natural gas flows, has choked off oil and gas flows due to Iran’s attacks on shipping in the waterway and forced Gulf producers to cut output because they can’t export from the region.  Iran is also seeking to control ship transit through the Strait of Hormuz, asking vessels to provide lists of crew and cargo, along with voyage details and bills of lading if they want to travel through the waterway.  Goldman Sachs warns that crude prices could exceed the 2008 record high of close to $150 a barrel if flows through the Strait of Hormuz remain depressed through March.

The International Energy Agency said last Monday that more than 40 energy sites across nine countries in the Middle East have been "severely or very severely" damaged, potentially prolonging disruptions to global supply chains once the war in Iran ends. 

The markets are discounting a 3% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets settled mixed on Tuesday.  The Euro Stoxx 50 closed up +0.50%.  China's Shanghai Composite fell from a 1-week high and closed down -0.80%.  Japan's Nikkei Stock 225 fell to a 3-month low and closed down -1.58%.

Interest Rates

June 10-year T-notes (ZNM6) on Tuesday closed up by +7.5 ticks.  The 10-year T-note yield fell -4.1 bp to 4.307%.  June T-notes rose to a 1-week high on Tuesday, and the 10-year T-note yield fell to a 1-week low of 4.283%.  T-notes moved higher on Tuesday in hopes that an end to the Iran war will lower energy prices and ease inflation concerns.  T-notes fell from their best level after the US Mar consumer confidence index unexpectedly rose and after Kansas City Fed President Jeff Schmid said he's "more focused on the risks to inflation at this time."

European government bond yields moved lower on Tuesday.  The 10-year German bund yield fell -3.1 bp to 3.004%.  The 10-year UK gilt yield fell -1.9 bp to 4.916%.

Eurozone Mar CPI rose +2.5% y/y, the most in 14 months, but below expectations of +2.6% y/y.  Mar core CPI rose +2.3% y/y, weaker than expectations of +2.4% y/y.

German Feb retail sales unexpectedly fell -0.6% m/m, weaker than expectations of a +0.3% m/m increase.

ECB Governing Council member Madis Muller said, "The ECB can't rule out changes in interest rates already in April if energy prices remain at a high level for a long time."

Swaps are discounting a 55% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

The Magnificent Seven technology stocks are climbing today, helping lift the overall market.  Meta Platforms (META) closed up more than +6%, and Nvidia (NVDA) and Alphabet (GOOGL) closed up more than +5%.  Also, Tesla (TSLA) closed up more than +4%, and Amazon.com (AMZN) and Microsoft (MSFT) closed up more than +3%.  In addition, Apple (AAPL) closed up more than +2%. 

Marvell Technology (MRVL) closed up more than +12% to lead gainers in the Nasdaq 100 and chip stocks after Nvidia said it is investing $2 billion in the company.  Also, ON Semiconductor (ON) closed up more than +11% to lead gainers in the S&P 500, and Sandisk (SNDK) and ARM Holdings Plc (ARM) closed up more than +10%.  In addition, Western Digital (WDC), Intel (INTC), Seagate Technology Holdings Plc (STX), and Microchip Technology (MCHP) closed up more than +7%, and KLA Corp (KLAC) and Lam Research (LRCX) closed up more than +6%.  Finally, Applied Materials (AMAT), Broadcom (AVGO), and ASML Holding NV (ASML) closed up more than +5%, and Micron Technology (MU), Analog Devices (ADI), and NXP Semiconductors NV (NXPI) closed up more than +4%. 

Airline stocks surged on Tuesday as crude oil prices fell by more than -1% in hopes that an end to the Iran war is near.  United Airlines Holdings (UAL) closed up more than +8%, and Alaska Air Group (ALK) closed up more than +7%.  Also, American Airlines Group (AAL) and Delta Air Lines (DAL) closed up more than +5%, and Southwest Airlines (LUV) closed up more than +3%.

Home builders and building suppliers moved higher on Tuesday after the 10-year T-note yield fell to a 1-week low, which lowers mortgage rates and supports housing demand. Builders Firstsource (BLDR) and Toll Brothers (TOL) closed up more than +4%, and DR Horton (DHI) and Pulte Group (PHM) closed up more than +3%.  Also, Lennar (LEN) and KB Home (KBH) closed up more than +2%. 

Energy producers and energy service providers moved lower on Tuesday after WTI crude oil fell from a 3-week high, dropping by more than 1%.  APA Corp (APA) and Devon Energy (DVN) closed down more than -2%, and Chevron (CVX) closed down more than -1% to lead losers in the Dow Jones Industrials. Also, Occidental Petroleum (OXY), Exxon Mobil (XOM), Phillips 66 (PSX), and Valero Energy (VLO) closed down more than -1%.

Apellis Pharmaceuticals (APLS) closed up more than +135% after being acquired by Biogen for $5.6 billion, or about $41 a share.  Biogen (BIIB) closed down more than -2% on the news.

Centessa Pharmaceuticals (CNTA) closed up more than +44% after Eli Lilly agreed to buy the company for about $7.8 billion or $38 a share, plus a further $9 a share if three milestone targets are met. 

Scholar Rock (SRRK) closed up by more than +14% after it resubmitted its Biologics License Application for apitegromab, a muscle-targeted therapy for spinal muscular atrophy.

Nebius Group NV (NBIS) closed up more than +12% after saying it plans to build a 310-megawatt server facility in Finland. 

Caterpillar (CAT) closed up more than +6% to lead gainers in the Dow Jones Industrials after Barclays raised its price target on the stock to $700 from $625.

FactSet Research Systems (FDS) closed up more than +6% after reporting Q2 revenue of $611 million, better than the consensus of $604.9 million, and raising its full-year revenue forecast to $2.45 billion to $2.47 billion from a previous estimate of $2.42 billion to $2.45 billion, above the consensus of $2.45 billion. 

Phreesia (PHR) is down more than -26% after cutting its 2027 revenue forecast to $510 million to $520 million from a previous forecast of $545 million to $559 million, well below the consensus of $550.9 million. 

Constellation Energy (CEG) closed down more than -6% to lead losers in the S&P 500 and Nasdaq 100 after forecasting 2026 adjusted operating EPS of $11 to $12.00, the midpoint below the consensus of $11.72. 

McCormick & Co (MKC) closed down more than -6% after agreeing to acquire Unilever’s Food business for $15.7 billion in cash and $29.7 billion of stock. 

Earnings Reports(4/1/2026)

Conagra Brands Inc (CAG), Lamb Weston Holdings Inc (LW), MSC Industrial Direct Co Inc (MSM).