Easing Geopolitical Tensions Push Stocks Sharply Higher

The S&P 500 Index ($SPX) (SPY) today is up +2.04%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +2.25%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +2.52%.  June E-mini S&P futures (ESM26) are up +2.17%, and June E-mini Nasdaq futures (NQM26) are up +2.68%.

Global stock indexes are sharply higher today, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq 100 posting 4-week highs. The easing of geopolitical tensions is bolstering market sentiment and fueling a risk-on rally in equity markets after the US and Iran agreed to a two-week ceasefire, and Iran pledged to reopen the Strait of Hormuz.  Crude oil prices sank by more than -15% to a 1.5-week low on the news, easing inflation concerns and sparking a rally in global government bond markets, with the German 10-year Bund yield and the 10-year T-note yield falling to 3-week lows.

It remains to be seen if there will be a permanent end to the Iran war.  Iran has shown little willingness to accept US demands to eliminate its nuclear program or retire its ballistic missile arsenal.  President Trump confirmed the US received a ten-point Iranian proposal that will serve as the basis for future negotiations.  Iran has previously called for the lifting of sanctions and compensation for war damages.  The Associated Press reported that the ceasefire plan includes allowing Iran and Oman to charge fees on ships transiting through the Strait of Hormuz, with Iran using the proceeds for reconstruction.

Crude oil prices (CLK26) remain volatile, fluctuating between gains and losses amid news headlines about Iran.  Crude prices plummeted -15% today to a 1.5-week low after the US and Iran agreed to a two-week ceasefire in exchange for a reopening of the Strait of Hormuz.  The International Energy Agency (IEA) said that more than 40 energy sites across nine Middle Eastern countries have been "severely or very severely" damaged and require lengthy repairs.  The IEA 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.  There are more than 800 vessels trapped in the Persian Gulf, with over 1,000 vessels waiting on both sides of the strait to transit. Before the war, the average daily volume of ships transiting through the strait was about 135.

US MBA mortgage applications fell -0.8% in the week ended April 3, with the purchase mortgage sub-index up +1.1% and the refinancing mortgage sub-index down -2.8%.  The average 30-year fixed rate mortgage fell -6 bp to 6.51% from 6.57% in the prior week.

The markets are discounting a 2% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets are sharply higher today.  The Euro Stoxx 50 rallied to a 5-week high and is up +4.94%.  China's Shanghai Composite climbed to a 2.5-week high and closed up +2.69%. Japan's Nikkei Stock 225 rallied to a 1-month high and closed up +5.39%.

Interest Rates

June 10-year T-notes (ZNM6) today are up +16 ticks.  The 10-year T-note yield is down -2.6 bp to 4.267%.  June T-notes rallied to a 3-week high today, and the 10-year T-note yield fell to a 3-week low of 4.228%.  T-notes are sharply higher today as the US-Iran ceasefire has sent WTI crude oil prices plummeting more than -15%, easing inflation concerns.  Supply pressures may limit the upside in T-notes in the short term as the Treasury will auction $39 billion of 10-year T-notes later today. 

European government bond yields are moving lower today.  The 10-year German bund yield fell to a 3-week low of 2.903% and is down -14.6 bp to 2.939%.  The 10-year UK gilt yield dropped to a 3-week low of 4.678% and is down -18.3 bp to 4.721%.

Eurozone Feb retail sales fell -0.2% m/m, right on expectations and the biggest decline in 9 months.

Eurozone Feb PPI fell -3.0% y/y, right on expectations and the biggest decline in 16 months.

German Feb factory orders rose +0.9% m/m, weaker than expectations of +3.0% m/m.

Swaps are discounting a 34% 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 as the US-Iran ceasefire sparks risk-on sentiment in asset markets.  Amazon.com (AMZN), Meta Platforms (META), and Alphabet (GOOGL) are up more than +3%. Also, Apple (AAPL) is up more than +2%, and Nvidia (NVDA) and Microsoft (MSFT) are up more than +1%. In addition, Tesla (TSLA) is up +0.04%.

Airline stocks and cruise line operators are rallying today amid the -15% plunge in crude oil prices, which lowers fuel costs and boosts corporate profits.  Carnival (CCL) is up more than +11% to lead gainers in the S&P 500, and Alaska Air Group (ALK) and United Airlines Holdings (UAL) are up more than +10%.  Also, Norwegian Cruise Line Holdings (NCLH) and Southwest Airlines (LUV) are up more than +9%, and Delta Air Lines (DAL), American Airlines Group (AAL), and Royal Caribbean Cruises Ltd (RCL) are up more than +7%. 

Chipmakers and AI-infrastructure stocks are climbing today to support gains in the broader market.  Lam Research (LRCX) is up more than +9% to lead gainers in the Nasdaq 100, and Sandisk (SNDK) is up more than +8%.  Also, Western Digital (WDC) and Intel (INTC) are up more than +7%, and ASML Holding NV (ASML), KLA Corp (KLAC), and Micron Technology (MU) are up more than +6%.  In addition, Analog Devices (ADI) is up more than +5%, and Seagate Technology Holdings Plc (STX) is up more than +4%.

Cryptocurrency-exposed stocks are moving higher today, with Bitcoin (^BTCUSD) up more than +2% to a 3-week high.  Riot Platforms (RIOT) is up more than +8%, and MARA Holdings (MARA) and Strategy (MSTR) are up more than +2%.  Also, Coinbase Global (COIN) is up more than +1%, 

Homebuilders are climbing today amid a -3 bp decline in the 10-year T-note yield, which lowers mortgage rates and supports housing demand.  Lennar (LEN), KB Home (KBH), and PulteGroup (PHM), DR Horton (DHI), and Toll Brothers (TOL) are all up more than +5%.

Mining stocks are climbing today, with gold up more than +1%, copper prices up more than +3%, and silver prices up more than +4%.  Anglogold Ashanti (AU), Southern Copper (SCCO), and Freeport McMoRan (FCX) are up more than +5%, and Coeur Mining (CDE) is up more than +3%.  Also, Newmont Corp (NEM) and Barrick Mining (B) are up more than +2%, and Hecla Mining (HL) is up more than +1%. 

Energy producers and energy service providers are selling off today with the -15% plunge in crude oil prices.  APA Corp (APA) is down more than -11%, and Occidental Petroleum (OXY) is down more than -6%.  Also, Chevron (CVX) is down more than -5% to lead losers in the Dow Jones Industrials, and Diamondback Energy (FANG) is down more than -4% to lead losers in the Nasdaq 100.  In addition, Exxon Mobil (XOM), Devon Energy (DVN), ConocoPhillips (COP), and Marathon Petroleum (MPC) are down more than -5%, and Valero Energy (VLO) and Phillips 66 (PSX) are down more than -4%.

Aehr Test Systems (AEHR) is up more than +18% after Craig-Hallum Capital Group LLC upgraded the stock to buy from hold with a price target of $68. 

Levi Strauss (LEVI) is up more than +9% after reporting Q1 adjusted EPS of 42 cents, better than the consensus of 37 cents, and raising its full-year adjusted EPS forecast to $1.42 to $1.48 from a previous estimate of $1.40 to $1.46. 

Earnings Reports(4/8/2026)

Constellation Brands Inc (STZ), Delta Air Lines Inc (DAL), RPM International Inc (RPM).