Stocks Settle Mixed Awaiting US-Iran Peace Talks

The S&P 500 Index ($SPX) (SPY) on Friday closed down -0.11%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.56%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.14%.  June E-mini S&P futures (ESM26) fell -0.12%, and June E-mini Nasdaq futures (NQM26) rose +0.12%.

Stock indexes gave up an early advance on Friday and settled mixed, with the Nasdaq 100 posting a 6-week high.  Easing inflation concerns were bullish for stocks on Friday after US consumer prices rose less than expected last month.  Also, hopes that this weekend’s negotiations between the US and Iran will lead to a diplomatic solution to the war were supportive for stocks. 

However, the S&P 500 fell from a 5-week high on Friday, turning lower on weakness in software stocks amid fears of AI disruption. Also, the larger-than-expected decline in the University of Michigan US Apr consumer sentiment index to a record low was negative for stocks.  In addition, stocks came under pressure Friday afternoon when the New York Post reported that President Trump said US warships are being reloaded with ammunition to resume strikes on Iran in case peace talks in Pakistan fail.

Crude prices fell on Friday, despite the Strait of Hormuz remaining essentially closed.  Traffic through the strait has shown little sign of a meaningful pickup since the US-Iran ceasefire began on Wednesday, as shipowners await clarification of its status. Hopes for an easing of hostilities in the Middle East are supporting stocks after Israel said it would open direct talks with Lebanon to discuss disarming Hezbollah and ending the conflict, with the US agreeing to host a meeting between both sides next week. 

WTI crude oil prices (CLK26) remain volatile, fluctuating between gains and losses amid news headlines about Iran.  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.

US Mar CPI rose +3.3% y/y, the biggest increase in two years, but slightly below expectations of +3.4% y/y.  Mar core CPI rose +2.6% y/y, slightly below expectations of +2.7% y/y.

US Feb factory orders were unchanged m/m, stronger than expectations of a -0.2% m/m decline.

The University of Michigan US Apr consumer sentiment index fell -5.7 to a record low of 47.6 (data since 1978), weaker than expectations of 51.5.

The University of Michigan US Apr 1-year inflation expectations rose to an 8-month high of 4.8%, stronger than expectations of 4.2%.  The Apr 5-10 year inflation expectations rise to a 5-month high of 3.4%, right on expectations.

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 higher on Friday.  The Euro Stoxx 50 climbed to a 5-week high and closed up by +0.51%.  China's Shanghai Composite rose to a 3-week high and closed up +0.51%.  Japan's Nikkei Stock 225 rallied to a 5-week high and closed up +1.84%.

Interest Rates

June 10-year T-notes (ZNM6) on Friday closed down by -4.5 ticks.  The 10-year T-note yield rose +3.6 bp to 4.311%.  T-notes moved lower on Friday after US Mar CPI rose +3.3% y/y, the biggest increase in two years, a hawkish factor for Fed policy.  Also, the larger-than-expected increase in the University of Michigan's US Apr 1-year inflation expectations to an 8-month high is bearish for T-notes. In addition, the 10-year breakeven inflation rate rose to a 2.5-week high of 2.384% on Friday, a negative factor for T-notes.  Limiting losses in T-notes on Friday was a -1% decline in WTI crude oil prices, which eased inflation expectations. 

European government bond yields moved higher on Friday.  The 10-year German bund yield rose +7.0 bp to 3.058%.  The 10-year UK gilt yield rose +8.6 bp to 4.835%.

Swaps are discounting a 34% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Software stocks were under pressure on Friday amid concerns about AI disruption, following the launch of Anthropic's Claude Managed Agents and Meta Platforms' unveiling of a new artificial intelligence model.  ServiceNow (NOW) closed down more than -7%, and Cadence Design Systems (CDNS) closed down more than -5%.  Also, Salesforce (CRM) closed down more than -3% to lead losers in the Dow Jones Industrials.  In addition, Datadog (DDOG) closed down more than -3%, and Atlassian (TEAM), Autodesk (ADSK), Intuit (INTU), and Adobe (ADBE) closed down more than -2%. 

Cybersecurity stocks retreated on Friday, with Cloudflare (NET) closing down more than -13% and Okta (OKTA) closing down more than -7%.  Also, Palo Alto Networks (PANW) closed down more than -6% to lead losers in the Nasdaq 100.  In addition, Fortinet (FTNT) closed down more than -4%, and CrowdStrike Holdings (CRWD) and Zscaler (ZS) closed down more than -3%. 

Chipmakers moved higher on Friday, a supportive factor for the overall market.  Broadcom (AVGO) closed up more than +4%, and Advanced Micro Devices (AMD) closed up more than +3%.  Also, Nvidia (NVDA) and ASML Holding NV (ASML) closed up more than +2%.  In addition, Intel (INTC) and Lam Research (LRCX) closed up more than +1%. 

Optical components makers rallied on Friday amid optimism from AI infrastructure demand.  Applied Optoelectronics (AAOI) closed up more than +12%, and Coherent (COHR) closed up more than +8%.  Also, Marvell Technology (MRVL) closed up more than +7% to lead gainers in the Nasdaq 100.

Nutanix (NTNX) closed down more than -6% after JPMorgan Chase downgraded the stock to neutral from overweight. 

Technoglass (TGLS) closed down more than -4% after cutting its 2026 adjusted Ebitda estimate to $225 million-$245 million from a previous forecast of $265 million-$305 million. 

Veeva Systems (VEEV) closed down more than -3% after Citigroup downgraded the stock to neutral from buy. 

CoreWeave (CRWV) closed up more than +11% after Anthropic PBC agreed to rent data center space from the company.

Shake Shack (SHAK) closed up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $120. 

Earnings Reports(4/13/2026)

Atlantic International Corp (ATLN), Fastenal Co (FAST), FB Financial Corp (FBK), Goldman Sachs Group Inc/The (GS), Meridian Holdings Inc (MRDN), NextNRG Inc (NXXT).