Stocks Rebound on Optimism US-Iran Ceasefire to Hold

The S&P 500 Index ($SPX) (SPY) on Thursday closed up +0.62%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.58%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.72%.  June E-mini S&P futures (ESM26) rose +0.58%, and June E-mini Nasdaq futures (NQM26) rose +0.68%.

Stock indexes recovered from early losses on Thursday and settled higher, with the S&P 500 posting a 1-month high, the Dow Jones Industrial Average posting a 5-week high, and the Nasdaq 100 posting a 4-week high.  Stocks rebounded on Thursday in hopes that the US-Iran ceasefire will hold after Israel agreed to direct talks with Lebanon. Axios reported that direct negotiations between Israel and Lebanon will begin next week in Washington, with the focus on disarming Iran-backed Hezbollah.

Stocks initially moved lower on Thursday on concerns over the sustainability of the US-Iran ceasefire.  Crude oil prices jumped more than +3% on Thursday as the Strait of Hormuz remains largely blocked, and Israeli attacks on Lebanon threaten to derail the fragile ceasefire.  The US and Iran both accused each other of violating the ceasefire, with a key disagreement over whether the truce extends to Lebanon.  President Trump pledged to keep US troops in the Persian Gulf ahead of Saturday’s talks with Iran, while Iran warned there may be mines in the strait.   

Stocks were also pressured by weaker-than-expected US economic news on Thursday, including Q4 GDP, Feb personal income and spending, and weekly jobless claims.

US weekly initial unemployment claims rose by +16,000 to an 8-week high of 219,000, showing a weaker labor market than expectations of 210,000.

US Feb personal spending rose +0.5% m/m, weaker than expectations of +0.6% m/m.  Feb personal income unexpectedly fell -0.1% m/m, weaker than expectations of +0.3% m/m and the first decline in nine months.

The US Feb core PCE price index rose +0.4% m/m and +3.0% y/y, right on expectations.

US Q4 GDP was revised downward to +0.5% (q/q annualized), weaker than expectations of no change at +0.7%, as Q4 personal consumption was revised lower to +1.9% from the previously reported +2.0%.

WTI crude oil prices (CLK26) remain volatile, fluctuating between gains and losses amid news headlines about Iran.  Crude prices rose by more than +3% on Thursday as the Strait of Hormuz remains largely closed, with Iran still restricting access and preventing energy flows to global markets.  Iran’s deputy foreign minister said Thursday that oil tankers and other vessels seeking to transit the strait must communicate with Iranian authorities to ensure their safe passage.  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.

The markets are discounting a 2% 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 -0.29%.  China's Shanghai Composite closed down -0.72%. Japan's Nikkei Stock 225 closed down -0.73%.

Interest Rates

June 10-year T-notes (ZNM6) on Thursday were unchanged.  The 10-year T-note yield fell -0.2 bp to 4.289%.   T-notes were little changed on Thursday.  T-note prices came under pressure on Thursday due to a +3% jump in WTI crude oil prices, which boosted inflation expectations and is hawkish for Fed policy.  Tepid demand for the Treasury’s $22 billion auction of 30-year T-bonds also undercut T-note prices as the auction had a bid-to-cover ratio of 2.39, slightly weaker than the 10-auction average of 2.40.

T-note prices found support on Thursday from weaker-than-expected US economic news.  Q4 GDP was unexpectedly revised downward, Feb personal income and spending came in lower than expected, and weekly jobless claims rose to an 8-week high. 

European government bond yields moved higher on Thursday.  The 10-year German bund yield rose +4.4 bp to 2.988%.  The 10-year UK gilt yield rose +3.9 bp to 4.749%.

German Feb industrial production unexpectedly fell -0.3% m/m, weaker than expectations of a +0.7% m/m increase.

German trade news was better than expected after German Feb exports rose +3.6% m/m, stronger than expectations of +1.3% m/m and the biggest increase in 3.75 years.  Feb imports rose +4.7% m/m, stronger than expectations of +3.5% m/m and the biggest increase in 2.75 years.

ECB Governing Council member Olaf Sleijpen said, "Persistently high oil prices will ultimately feed through to the prices of other products, and thus also to wage formation, which could amplify inflationary effects. In that case, the ECB will naturally intervene to keep inflation around 2% in the medium term."

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

US Stock Movers

Marvell Technology (MRVL) closed up more than +4% to lead chip stocks higher after Barclays upgraded the stock to overweight from equal weight with a price target of $150. Also, Intel (INTC) and Lam Research (LRCX) closed up more than +4%, and Micron Technology (MU), KLA Corp (KLAC), and Applied Materials (AMAT) closed up more than +3%. In addition, Advanced Micro Devices (AMD) and Texas Instruments (TXN) closed up more than +2%. 

Software stocks were under pressure on Thursday on concerns about AI disruption after Anthropic launched Claude Managed Agents and Meta Platforms unveiled a new artificial intelligence model. Palantir Technologies (PLTR), ServiceNow (NOW), Intuit (INTU), and Atlassian (TEAM) closed down more than -7%, and Autodesk (ADSK) closed down more than -6%.  Also, Workday (WDAY) closed down more than -5%, and Adobe (ADBE) and Oracle (ORCL) closed down more than -3%.  In addition, Salesforce (CRM) closed down more than -3% to lead losers in the Dow Jones Industrials.

Zscaler (ZS) closed down more than -11% to lead the Nasdaq 100 losers, and cybersecurity stocks lower after BTIG LLC downgraded the stock to neutral from buy.  Also, Okta (OKTA) closed down more than -10%, and Cloudflare (NET) closed down more than -8%.  In addition, CrowdStrike Holdings (CRWD) closed down more than -7%, Palo Alto Networks (PANW) closed down more than -4%, and Fortinet (FTNT) closed down more than -3%.

Brown-Forman (BF.B) closed up more than +12% to lead gainers in the S&P 500 on reports that Sazerac approached the company about a takeover.

Whitestone REIT (WSR) closed up more than +11% after entering into a definitive merger agreement with Ares Real Estate funds to be acquired for $1.7 billion, or about $19 per share.

Constellation Brands (STZ) closed up more than +8% after reporting Q4 comparable net sales of $1.92 billion, stronger than the consensus of $1.88 billion. 

Amazon.com (AMZN) closed up more than +5% to lead gainers in the Dow Jones Industrials and Nasdaq 100 on AI optimism after a letter to shareholders from CEO Jassy was seen as validating the company’s potential with AI and justifying its heavy spending on the technology. 

Simply Good Foods (SMPL) closed down more than -18% after reporting Q2 net sales of $326.0 million, weaker than the consensus of $344.4 million, and forecasting full-year net sales down -7% to -10% to $1.31 billion and $1.35 billion. 

Texas Pacific Land Corp (TPL) closed down more than -15% to lead losers in the S&P 500 after Murray Stahl, the CEO of Horizon Kinetics Holding Corp, the largest shareholder of TPL, died.

Circle Internet Group (CRCL) closed down more than -10% after Compass Point Research & Trading LLC downgraded the stock to sell from neutral with a price target of $77.

Earnings Reports(4/10/2026)

C&F Financial Corp (CFFI), FRP Holdings Inc (FRPH), Hingham Institution For Saving (HIFS), Hub Group Inc (HUBG), Innventure Inc (INV), Unity Bancorp Inc (UNTY), Utah Medical Products Inc (UTMD), Virtus Investment Partners Inc (VRTS), WaFd Inc (WAFD), XCF Global Inc (SAFX).