S&P 500 and Nasdaq 100 Soar to Record Highs as Middle East Tensions Ease

The S&P 500 Index ($SPX) (SPY) today is up +1.28%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +2.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.326%.  June E-mini S&P futures (ESM26) are up +1.35%, and June E-mini Nasdaq futures (NQM26) are up +1.38%.

Stock indexes are pushing higher today, with the S&P 500 and Nasdaq 100 posting new all-time highs and the Dow Jones Industrials posting a 7-week high.  Stocks are rallying today on mounting speculation that a deal to end the US-Iran war is near, sparking risk-on sentiment in asset markets.  Crude prices are down more than -13% after Iran announced that the Strait of Hormuz is now "completely open" for commercial shipping, a major step toward ending the war with the US and Israel.  The plunge in crude oil prices eased inflation concerns and knocked the 10-year T-note yield down -8 bp to 4.23%.  Also, optimism about artificial intelligence and robust earnings have added to stock market momentum. 

Stocks also found support today after Axios reported that the US and Iran are negotiating over a plan to end the war, with one element under discussion being that the US would release $20 billion in frozen Iranian assets in return for Iran giving up its stockpile of enriched uranium.  Talks between the US and Iran are expected to continue in Pakistan on Sunday.

President Trump on Thursday claimed that Iran made key concessions in an ongoing negotiation to end the seven-week war.  Mr. Trump said, “They’ve agreed to almost everything, and they've got to get to the table with a pen.”  Mr. Trump said he ‘’might” travel to Pakistan if a deal with Iran is clinched.  The prospects for a formal peace agreement also solidified when Israel and Lebanon agreed to a 10-day ceasefire on Thursday, and the truce appears to be holding today.

WTI crude oil prices (CLK26) are down more than -13% today to a 5-week low after Iran said the Strait of Hormuz is open to commercial shipping, which could pave the way for a deal to end the war.  President Trump said the US naval blockade in the strait "will remain in full force" until a deal is fully agreed.  On Monday, the US vowed to blockade all vessels passing through the strait that call at Iranian ports or are headed there.  The blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait.  Iran has been able to export crude oil during the war, exporting about 1.7 million bpd in March.

Earnings season began this week, with Q1 S&P 500 earnings projected to climb +12% y/y, according to Bloomberg Intelligence.  Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.

The markets are discounting a 1% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets today are mixed.  The Euro Stoxx 50 rallied to a 7-week high and is up +2.20%.  China's Shanghai Composite fell from a 4-week high and closed down -0.10%.  Japan's Nikkei Stock 225 closed down -1.71%.

Interest Rates

June 10-year T-notes (ZNM6) today are up +18 ticks.  The 10-year T-note yield is down -8.3 bp to 4.228%.  June T-notes rallied to a 1-month high today, and the 10-year T-note yield fell to a 1-month low of 4.226%.  Today’s -13% plunge in WTI crude oil prices to a 5-week low has lowered inflation expectations and boosted T-note prices. 

European government bond yields are moving lower today.  The 10-year German bund yield fell to a 1-week low of 2.945% and is down -8.4 bp to 2.483%.  The 10-year UK gilt yield dropped to a 1-week low of 4.727% and is down -11.8 bp to 4.729%.

ECB President Christine Lagarde said, "Risks to the price outlook are tilted to the upside, especially in the near term, while the medium-term implications will depend on the intensity and duration of the war." 

ECB Governing Council member Madis Muller said the ECB needs to stay "vigilant" to potential inflation risks from the Iran war, but "we don't have much hard evidence of second-round effects, so it's difficult to argue that there's an obvious case to raise rates."

ECB Governing Council member Alexander Demarco said, "Given higher uncertainty at the moment, June is a better moment than April" to decide whether an ECB interest rate response to the Iran war is necessary.

Swaps are discounting an 8% 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 are soaring today as WTI crude prices plunged by more than -13%, reducing fuel costs and boosting company profits.  Alaska Air Group (ALK) is up more than +14%, and United Airlines Holdings (UAL) is up more than 11% to lead gainers in the S&P 500.  Also, Royal Caribbean Cruises Ltd (RCL), Carnival (CCL), Norwegian Cruise Line Holdings (NCLH), and Southwest Airlines (LUV) are up more than +10%.  In addition, American Airlines Group (AAL) is up more than +8%, and Delta Air Lines (DAL) is up more than +6%.

The Magnificent Seven technology stocks are pushing higher today, a supportive factor for the overall market.  Tesla (TSLA) is up more than +4%, and Apple (AAPL) is up more than +3%. Also, Microsoft (MSFT) is up more than +2%, and Nvidia (NVDA), Amazon.com (AMZN), and Meta Platforms (META) are up more than +1%.  In addition,Alphabet (GOOGL) is up +0.24%.

Chipmakers and AI-infrastructure stocks are moving higher today to provide support to the broader market. Analog Devices (ADI) is up more than +4%, and ASML Holding NV (ASML) is up more than +3%.  Also, Marvell Technology (MRVL), Western Digital (WDC), Seagate Technology Holdings Plc (STX), Microchip Technology (MCHP), Lam Research (LRCX), KLA Corp (KLAC), and Texas Instruments (TXN) are up more than +2%. 

Cryptocurrency-exposed stocks are moving higher today, with Bitcoin (^BTCUSD) up more than +3% to a 2.5-month high.  Strategy (MSTR) is up more than +14% to lead gainers in the Nasdaq 100.  Also, Galaxy Digital Holdings (GLXY) is up more than +8%, and Coinbase Global (COIN) is up more than +7%. In addition, Riot Platforms (RIOT) is up more than +5%, and MARA Holdings (MARA) is up more than +3%. 

Energy stocks and service providers are sinking today, with WTI crude oil down more than -10% at a 5-week low.  APA Corp (APA) and Valero Energy (VLO) are down more than -10%, and Occidental Petroleum (OXY) is down more than -8%.  Also, Diamondback Energy (FANG), ConocoPhillips (COP), and Devon Energy (DVN) are down more than -7%, and Exxon Mobil (XOM) is down more than -6%.  In addition, Chevron (CVX) is down more than -5% to lead losers in the Dow Jones Industrials, and Marathon Petroleum (MPC), Halliburton (HAL), and Phillips 66 (PSX) are down more than -5%.

Autoliv (ALV) is up more than +9% after reporting Q1 sales of $2.75 billion, above the consensus of $2.61 billion. 

Onto Innovation (ONTO) is up more than +7% after Stifel upgraded the stock to buy from hold with a price target of $350. 

Ally Financial (ALLY) is up more than +6% after reporting Q1 adjusted EPS of $1.11, better than the consensus of 93 cents. 

Woodward Inc. (WWD) is up more than +5% after RBC Capital Markets initiated coverage on the stock with a recommendation of outperform and a price target of $450. 

Netflix (NFLX) is down more than -8% to lead losers in the Nasdaq 100 after forecasting Q2 revenue of $12.57 billion, below the consensus of $12.64 billion. 

Albemarle (ALB) is down more than -9% after Baird downgraded the stock to neutral from outperform. 

Alcoa (AA) is down more than -8% after reporting Q1 sales of $3.19 billion, weaker than the consensus of $3.27 billion. 

Earnings Reports(4/17/2026)

Ally Financial Inc (ALLY), Fifth Third Bancorp (FITB), Regions Financial Corp (RF), State Street Corp (STT), Truist Financial Corp (TFC).