Stocks Climb on War-End Optimism

The S&P 500 Index ($SPX) (SPY) today is up +0.97%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.86%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.45%.  June E-mini S&P futures (ESM26) are up +0.96%, and June E-mini Nasdaq futures (NQM26) are up +1.47%.

Stock indexes are extending Tuesday’s sharp rally today, with the Dow Jones Industrials posting a 2-week high on mounting optimism that the war in the Middle East is nearing a conclusion.   President Trump said he foresaw the US ending the war with Iran within two to three weeks. Mr. Trump said Iran has asked for a ceasefire, which he will consider when the Strait of Hormuz is “open, free and clear.”  Meanwhile, the US and Israeli forces kept up their bombardment of Iran, while Israel, Bahrain, Kuwait, and the UAE all reported attacks by Iran, with Qatar saying a fuel oil tanker was struck in Qatari waters. 

Stocks remained higher today on better-than-expected US economic news on Mar ADP employment, Feb retail sales, and Mar ISM manufacturing activity.

US MBA mortgage applications fell -10.4% in the week ended March 27, with the purchase mortgage sub-index down -2.6% and the refinancing sub-index down -17.3%.  The average 30-year fixed rate mortgage rose +14 bp to a 7-month high of 6.57% from 6.43% in the prior week.

The US Mar ADP employment change rose by +62,000, stronger than expectations of +40,000.

US Feb retail sales rose +0.6% m/m, stronger than expectations of +0.5% m/m, and Feb retail sales ex-autos rose +0.5% m/m, stronger than expectations of +0.3% m/m.

The US Mar ISM manufacturing index unexpectedly rose +0.3 to 52.7, stronger than expectations of a decline to 52.3 and the strongest pace of expansion in 3.5 years.  The Mar ISM prices paid sub-index rose +7.8 to a 3.75-year high of 78.3, stronger than expectations of 74.0.

Hawkish comments today from St. Louis Fed President Alberto Musalem were bearish for stocks, as he said risks are rising to both inflation and employment and added, "I expect the current setting of the policy rate will remain appropriate for some time."

President Trump will give a televised address to the country at 9 pm Eastern time tonight to provide an “important update” on Iran.  He said Iran could still reach a deal with the US, but that an agreement with Iran isn’t a prerequisite for ending the war. 

Crude oil prices (CLK26) are down more than -2% today on hopes for an end to the Iran war and a reopening of the Strait of Hormuz.  The Wall Street Journal reported today that the UAE is preparing to help the US and other allies open the Strait of Hormuz by force and is lobbying for a United Nations Security Council resolution authorizing such action.

The markets are discounting a 1% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets are higher today.  The Euro Stoxx 50 climbed to a 2-week high and is up +2.60%.  China's Shanghai Composite rose to a 1.5-week high and closed up +1.46%.  Japan's Nikkei Stock 225 closed up sharply by +5.24%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +2 ticks.  The 10-year T-note yield is down -0.6 bp to 4.311%.  June T-notes climbed to a 1.5-week high today, and the 10-year T-note yield fell to a 1.5-week low of 4.257%.  T-notes are moving higher today as WTI crude oil is down more than -2%, easing inflation expectations.  Also, optimism that a resolution to the Iran war will lead to lower energy prices, allowing the Fed to cut interest rates, is supporting T-note prices. 

However, T-notes gave up most of their gains on stronger-than-expected US ADP, retail sales, and ISM manufacturing reports.  Also, hawkish comments today from St. Louis Fed President Alberto Musalem undercut T-note prices when he said, "I expect the current setting of the policy rate will remain appropriate for some time." 

European government bond yields are moving lower today.  The 10-year German bund yield dropped to a 2-week low of 2.931% and is down -0.5 bp to 2.999%.  The 10-year UK gilt yield fell to a 2-week low of 4.777% and is down -6.5 bp to 4.851%.

The Eurozone Mar S&P manufacturing PMI was revised upward by +0.2 to 51.6 from the previously reported 51.4, the strongest pace of expansion in 3.75 years.

The Eurozone Feb unemployment rate unexpectedly rose +0.1 to 6.2%, showing a weaker labor market than expectations of no change at 6.1%.

Swaps are discounting a 49% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Chip makers and AI-infrastructure stocks are climbing today and lifting the overall market.  Western Digital (WDC) is up more than +11% to lead gainers in the S&P 500 and Nasdaq 100, and Intel (INTC) and Sandisk (SNDK) are up more than +9%.  Also, Micron Technology (MU) is up more than +8%, and Seagate Technology Holdings Plc (STX) is up more than 7%. In addition, Marvell Technology (MRVL) is up more than +6%, and Applied Materials (AMAT) and ASML Holding NV (ASML) are up more than +4%. Finally, ARM Holdings Plc (ARM), KLA Corp (KLAC), Lam Research (LRCX), and Advanced Micro Devices (AMD) are up more than +3%.

Mining stocks are rallying today with gold and silver prices climbing to 2-week highs.  Newmont Corp (NEM) and Anglogold Ashanti (AU) are up more than +5%, and Freeport McMoRan (FCX) and Coeur Mining (CDE) are up more than +4%.  Also, Southern Copper (SCCO), Hecla Mining (HL), and Barrick Mining (B) are up more than +3%. 

Airline stocks are moving higher today, as crude oil prices are down by more than -2% in hopes that an end to the Iran war is near.  United Airlines Holdings (UAL) and Alaska Air Group (ALK) are up more than +4%.  Also, American Airlines Group (AAL) is up more than +3%, and Delta Air Lines (DAL) and Southwest Airlines (LUV) are up more than +2%.

Optoelectronic companies are rallying today.  Lumentum Holdings (LITE) is up more than +10%, and Applied Optoelectronics (AAOI) is up more than +9%.  Also, Coherent (COHR) is up more than +7%, Corning (GLW) is up more than +5%, and Credo Technology Group Holding Ltd (CRDO) is up more than +2%. 

Energy producers and energy service providers are under pressure today with WTI crude oil down by more than -2%.  Exxon Mobil (XOM), Devon Energy (DVN), Chevron (CVX), and Occidental Petroleum (OXY) are down more than -4%.  Also, Diamondback Energy (FANG), Phillips 66 (PSX), APA Corp (APA), ConocoPhillips (COP), Marathon Petroleum (MPC), and Valero Energy (VLO) are down more than -3%.

Target Hospitality (TH) is up more than +37% after securing a multi-year contract worth over $550 million to construct and provide hospitality services for a data center development in Texas.

nCino (NCNO) is up more than +9% after forecasting 2027 subscription revenue of $569 million to $573 million, better than the consensus of $568.5 million. 

Boeing (BA) is up more than +5% to lead gainers in the Dow Jones Industrials after Wells Fargo Securities initiated coverage on the stock with an overweight rating and a price target of $250.

Oric Pharmaceuticals (ORIC) is down more than -27% after announcing an update on its rinzimetostat program that JPMorgan Chase said was too small a sample and a short follow-up that makes it unreasonable to expect clear efficacy differentiation at this stage. 

RH (RH) is down more than -22% after forecasting 2027 revenue to be down -2% to -4%, much weaker than the consensus of an +8.1% increase. 

Nike (NKE) is down more than -13% to lead losers in the S&P 500 and Dow Jones Industrials after forecasting Q4 revenue to be down -2% to -4% and saying its turnaround efforts are taking longer than originally planned. 

MSC Industrial Direct (MSM) is down more than -1% after reporting Q2 net sales of $917.8 million, weaker than the consensus of $931.5 million.

Earnings Reports(4/1/2026)

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