Stocks Finish Higher on Iran Ceasefire Hopes

The S&P 500 Index ($SPX) (SPY) on Monday closed up +0.44%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.61%.  June E-mini S&P futures (ESM26) rose +0.64%, and June E-mini Nasdaq futures (NQM26) rose +0.88%.

Stock indexes settled higher on Monday, with the S&P 500 and Nasdaq 100 posting 1.5-week highs.  Hopes for a potential ceasefire in the war in Iran boosted stock prices on Monday.  Axios reported that the US, Iran, and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war. On Sunday, President Trump extended his previous 10-day deadline for Iran to open the Strait of Hormuz by 20 hours until Tuesday evening and threatened to unleash "all hell" on Iran if the Strait of Hormuz is not reopened to all shipping traffic by Tuesday.   However, Mr. Trump also said the US was in "deep negotiations" with Iran and "there is a good chance to make a deal, but if they don't make a deal, I am blowing up everything over there."  The chances of a ceasefire appear doubtful after a spokesman for Iran’s Foreign Ministry said, “No rational person” would accept a ceasefire proposal.

Monday’s US economic news was negative for stocks.  The US Mar ISM services index fell -2.1 to 54.0, weaker than expectations of 54.9.  The Mar ISM services prices paid subindex rose +7.7 to a 3.5-year high of 70.7, stronger than expectations of 67.0.

Stocks have carryover support from last Friday’s US economic news, which showed strength in the labor market.  March nonfarm payrolls rose by +178,000, stronger than expectations of +65,000 and the largest increase in 15 months.  Also, the March unemployment rate unexpectedly fell -0.1 to 4.3%, showing a stronger labor market than expectations of no change at 4.4%.  The markets were closed last Friday for Good Friday.

Crude oil prices (CLK26) remain volatile, with trading fluctuating between gains and losses amid news headlines about Iran.  Crude rose +1% on Monday when President Trump said the US has plans to decimate Iran by "12 o'clock" Tuesday night if there is no deal to reopen the Strait of Hormuz.  The Wall Street Journal reported the US military is making preparations for potential strikes on energy targets in Iran.  US and Israeli strikes on Iranian targets continued over the weekend, while Kuwait reported fires at some of its refining facilities after Iranian drone and missile attacks.  Also, the UAE reported a petrochemical plant at Ruwais and the Habshan gas facility, the UAE's largest natural gas processing facility, halted production following Iranian attacks.  The New York Times, citing US intelligence reports, said Iranian personnel have been digging out underground missile bunkers and silos struck by US and Israeli bombs and returning them to operations hours after attacks.  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.

Most overseas stock markets were closed on Monday for holidays.  The Euro Stoxx 50 was closed for the Easter Monday holiday.  China's Shanghai Composite was closed for the Tomb Sweeping Day holiday.  Japan's Nikkei Stock 225 closed up +0.55%.

Interest Rates

June 10-year T-notes (ZNM6) on Monday closed up by +1.5 ticks.  The 10-year T-note yield fell by -1.0 bp to 4.331%.  Geopolitical risks boosted safe-haven demand for T-notes on Monday ahead of President Trump’s Tuesday deadline for Iran to reopen the Strait of Hormuz.  Also, Monday’s weaker-than-expected Mar ISM services report is supportive for T-notes.

Gains in T-notes are limited today amid a rebound in stock prices, which has reduced safe-haven demand for government debt.  T-notes are also weighed down today by some negative carryover from last Friday’s stronger-than-expected US Mar payroll report. In addition, rising price pressures in the US service sector are bearish for T-note prices, after the Mar ISM services prices paid sub-index rose more than expected to a 3.5-year high.

European government bonds did not trade on Monday, with markets in Europe closed for the Easter Monday holiday. 

Swaps are discounting a 50% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Chipmakers and AI-infrastructure stocks are climbing today to support gains in the broader market.  Seagate Technology Holdings Plc (STX) closed up more than +5%, and Micron Technology (MU) and Western Digital (WDC) closed up more than +3%.  Also, Sandisk (SNDK), Analog Devices (ADI), Marvell Technology (MRVL), Microchip Technology (MCHP), and Texas Instruments (TXN) closed up more than +2%.

Cryptocurrency-exposed stocks rallied on Monday as Bitcoin (^BTCUSD) climbed by more than +4% to a 1-week high.  Strategy (MSTR) closed up more than +6%, and Riot Platforms (RIOT) closed up more than +5%.  Also, Galaxy Digital Holdings (GLXY) closed up more than +3%, Coinbase Global (COIN) is up more than +2%, and MARA Holdings (MARA) closed up more than +1%. 

Solena Therapeutics (SLNO) closed up more than +32% after the Financial Times reported that Neurocrine is in advanced talks to acquire the company. 

Kratos Defense & Security Solutions (KTOS) closed up more than +10% after Jeffries upgraded the stock to buy from hold with a price target of $85. 

Kraft Heinz Co (KHC) closed up more than +3% after a 13D filing with the SEC showed Link Co. reported a 10% stake in the company worth $2.7 billion. 

Applied Optoelectronics (AAOI) closed up more than +3% after receiving a new $71 million order for 800G single-mode data center transceivers from a hyperscale customer.

Olin Corp (OLN) closed up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $35.

Super Micro Computer (SMCI) closed down more than -5% after Mizuho Securities cut its price target on the stock to $25 from $33.

Invesco Ltd (IVZ) closed down more than -5% after BlackRock announced it will launch an ETF tracking the Nasdaq 100 Index, which could compete with Invesco’s Nasdaq ETF.

Tesla (TSLA) closed down more than -2% after JPMorgan Chase cut its 2026 EPS outlook for Tesla to $1.80 from $2.00.

Dow Inc. (DOW) closed down more than -2% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $35. 

LyondellBasell Industries NV (LYB) closed down more than -1% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $68. 

Earnings Reports(4/7/2026)

Aehr Test Systems (AEHR), Ames National Corp (ATLO), Greenbrier Cos Inc/The (GBX), Kura Sushi USA Inc (KRUS), OP Bancorp (OPBK), Phoenix Education Partners Inc (PXED), Skillsoft Corp (SKIL).