The S&P 500 Index ($SPX) (SPY) on Thursday closed up +0.11%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.11%. June E-mini S&P futures (ESM26) rose +0.08%, and June E-mini Nasdaq futures (NQM26) rose +0.11%.
Stock indexes recovered from early losses on Thursday and finished mostly higher on optimism that the Strait of Hormuz could soon be reopened. Short covering emerged in stocks on Thursday after a report from Iran’s state-run IRNA said that Iran is drafting a protocol with Oman to monitor traffic through the Strait of Hormuz, citing Iranian Deputy Foreign Minister Kazem Gharibabadi.
Stocks also found support from Thursday’s US economic news, which was better than expected. Weekly initial unemployment claims unexpectedly fell by -9,000 to a 2.5-month low of 202,000, showing a stronger labor market than expectations of an increase to 212,000. Also, the Feb trade deficit was -$57.3 billion, narrower than expectations of -$60.6 billion.
Stocks initially opened lower on Thursday as the price of crude oil soared more than +11% after President Trump dashed hopes for a quick end to the war with Iran. Wednesday evening, during a speech to the American public, Mr. Trump vowed more aggressive action against Iran over the next two to three weeks and offered no concrete plans to reopen the Strait of Hormuz.
Crude oil prices (CLK26) continue to surge as the Iran war looks set to drag on and the Strait of Hormuz remains effectively closed. 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 International Energy Agency warned that even if the war were to end within a few weeks, it would still take time for normal flows through Hormuz to resume, as some energy infrastructure has been damaged and is facing lengthy repairs.
The markets are discounting a 1% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.
Overseas stock markets settled lower on Thursday. The Euro Stoxx 50 closed down -0.70%. China's Shanghai Composite closed down -0.74%. Japan's Nikkei Stock 225 fell from a 2-week high and closed down sharply by -2.38%.
Interest Rates
June 10-year T-notes (ZNM6) on Thursday closed up by +1 tick. The 10-year T-note yield fell by -1.8 bp to 4.301%. June T-notes recovered from early losses and moved slightly higher on Thursday as a sell-off in equity markets boosted safe-haven demand for T-notes. Also, T-notes are finding support on concerns that soaring energy prices will derail the global economy and may prompt the Fed to lower interest rates.
T-notes today initially moved lower on Thursday on signs of strength in the US labor market after weekly initial unemployment claims unexpectedly fell to a 2.5-month low, a hawkish factor for Fed policy. Also, Thursday’s +11% surge in crude oil prices pushed inflation expectations higher, a bearish factor for T-notes, as the 10-year breakeven inflation rate climbed to a 1-week high of 2.361%.
European government bond yields moved higher on Thursday. The 10-year German bund yield rose +0.7 bp to 2.992%. The 10-year UK gilt yield rose +0.3 bp to 4.833%.
Swaps are discounting a 50% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.
US Stock Movers
Airline stocks and cruise line operators fell sharply on Thursday as crude oil prices surged more than +11%, raising fuel costs and cutting into corporate profits. United Airlines Holdings (UAL) and Carnival (CCL) closed down more than -3%, and American Airlines Group (AAL), Norwegian Cruise Line Holdings (NCLH), and Royal Caribbean Cruises Ltd (RCL) closed down more than -2%. Also, Southwest Airlines (LUV), Alaska Air Group (ALK), and Delta Air Lines (DAL) closed down more than -1%.
Asset management stocks slid on Thursday after Blue Owl Capital said it will limit redemptions from two of its private credit funds amid a surge in withdrawal requests. Ares Management (ARES) closed down more than -3%, and Apollo Global Management (APO) closed down more than -2%. Also, Blue Owl Capital (OWL) and Blackstone (BX) closed down more than -1%.
Metals and finished goods stocks moved lower on Thursday after the Trump administration maintained a 50% tariff on many steel, aluminum, and copper imports. Stanley Black & Decker (SWK) closed down more than -3%, and Century Aluminum (CENX), Commercial Metals (CMC), and Carrier Global (CARR) closed down more than -1%.
SBA Communications (SBAC) closed up more than +18% to lead gainers in the S&P 500 after Bloomberg reported the company is exploring options, including a potential sale, after receiving preliminary takeover interest.
Globalstar (GSAT) closed up more than +13% after the Financial Times reported that Amazon.com is in talks to acquire the company.
Wingstop (WING) closed up more than +5% after Raymond James upgraded the stock to strong buy from outperform with a price target of $240.
Intel (INTC) closed up more than +4% to lead gainers in the Nasdaq 100 after D.A. Davidson said Intel’s action to pay $14.2 billion to buy back half of its plant in Ireland bodes well for the company’s turnaround story.
SM Energy (SM) closed up more than +4% after BMO Capital Markets raised its price target on the stock to $33 from $26.
Matador Resources (MTDR) closed up more than +3% after KeyBanc Capital Markets raised its price target on the stock to $73 from $61.
Alto Neuroscience (ANRO) closed down more than -7% after its ALTO-101 to treat cognitive impairment associated with schizophrenia failed to achieve statistical significance versus placebo in a Phase 2 trial.
Tesla (TSLA) closed down more than -5% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q1 vehicle deliveries of 358,023, below the consensus of 372,160.
Estee Lauder (EL) closed down more than -2% to lead losers in the S&P 500 after saying it’s advancing in negotiations to combine with Puig Brands SA.
Earnings Reports(4/6/2026)
ECB Bancorp Inc/MD (ECBK), Greene County Bancorp Inc (GCBC), Immersion Corp (IMMR), RxSight Inc (RXST).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
