Stocks Fall as Iran Refuses to Attend Peace Talks

The S&P 500 Index ($SPX) (SPY) on Tuesday closed down -0.63%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.59%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.42%.  June E-mini S&P futures (ESM26) fell -0.62%, and June E-mini Nasdaq futures (NQM26) fell -0.41%.

Stock indexes gave up an early advance on Tuesday and settled lower. Stocks retreated after WTI crude oil rebounded from early losses and rallied more than +2%, when Iran said it won’t attend peace talks in Pakistan before a ceasefire expires on Wednesday. 

Stock losses accelerated on Tuesday after Vice President Vance's trip to Pakistan to meet Iranian negotiators was put on hold following Iran's failure to respond to US negotiating positions.  Also, President Trump said it's "highly unlikely" he will extend the ceasefire with Iran after Wednesday’s deadline, and the US is “ready to go” with a resumption of bombing if a breakthrough isn’t reached.

However, stock index futures recovered in post-market trading after WTI crude oil prices fell, as President Trump, after the markets closed, said he would extend the ceasefire with Iran and maintain the blockade of the Strait of Hormuz, following the scrapping of plans for diplomatic talks between the US and Iran.

Stocks initially moved higher on Tuesday, with the Nasdaq 100 posting a new record high and the Dow Jones Industrial Average hitting a 2-month high on hopes that US-Iran peace talks would continue.  Some positive Q1 earnings results from UnitedHealth Group and General Electric also supported stock gains.  In addition, Tuesday’s stronger-than-expected US economic reports on March retail sales and March pending home sales suggest that consumer spending is holding up, a supportive factor for stocks. 

March retail sales rose +1.7% m/m, stronger than expectations of +1.4% m/m and the biggest increase in a year.  Also, March retail sales ex-autos rose +1.9% m/m, stronger than expectations of +1.4% m/m and the biggest increase in 3 years.

US Mar pending home sales rose +1.5%, stronger than expectations of +0.5% m/m.

Meanwhile, stocks found support on signs that Fed Chair nominee Kevin Warsh will back an independent Fed and prioritize low inflation.  Fed Chair nominee Warsh's prepared statement before the Senate Banking Committee said he is committed to ensuring that the conduct of monetary policy remains "strictly independent" and to keeping inflation in check, saying price stability is a mandate for the Fed "without excuse or equivocation."   When asked if he agreed with President Trump's call for the Fed to lower interest rates, Fed Chair nominee Warsh said, "Unlike many of my colleagues past and present, I don't believe in forward guidance, and I don't believe that I should be previewing for you what a future decision might be."

Senator Tillis of the Senate Banking Committee said he's open to advancing Kevin Warsh's nomination to be Federal Reserve Chair if an ongoing US criminal inquiry into the Fed is dropped and Congress launches its own investigation.

WTI crude oil prices (CLK26) recovered from early losses today and rose more than +2% after Vice President Vance's trip to Pakistan to meet Iranian negotiators was put on hold.  The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis.  The Wall Street Journal reported that the US military is preparing to board Iran-linked oil tankers and seize commercial ships in international waters in the coming days to pressure Iran into reopening the Strait of Hormuz.  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 recently been able to export crude oil during the war, with exports of about 1.7 million bpd in March.

Earnings season continues this week.  So far, 83% of the 64 S&P 500 companies that reported Q1 earnings have beaten estimates.  Q1 S&P 500 earnings are 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 settled mixed on Tuesday.  The Euro Stoxx 50 closed down -0.88%.  China's Shanghai Composite rose to a 1-month high and closed up +0.07%.  Japan's Nikkei Stock 225 closed up +0.89%.

Interest Rates

June 10-year T-notes (ZNM6) on Tuesday closed down by -11.5 ticks.  The 10-year T-note yield rose by +3.3 bp to 4.284%.  T-notes retreated on Tuesday amid stronger-than-expected US economic reports on Mar retail sales and Mar pending home sales.  T-notes added to their losses on Tuesday after WTI crude oil recovered from early losses and rallied by more than +2%, which lifted inflation expectations and is bearish for T-note prices.

T-notes have support on signs that Fed Chair nominee Kevin Warsh will support an independent Fed and prioritize low inflation.  Fed Chair nominee Warsh's prepared statement before the Senate Banking Committee said he is committed to ensuring that the conduct of monetary policy remains "strictly independent" and to keeping inflation in check, saying price stability is a mandate for the Fed "without excuse or equivocation."   

European government bond yields moved higher on Tuesday.  The 10-year German bund yield rose by +2.4 bp to 3.004%.  The 10-year UK gilt yield climbed to a 1-week high of 4.892% and finished up by +5.0 bp to 4.884%.

The German Apr ZEW survey expectations of economic growth fell -16.7 to a 3.25-year low of -17.2, weaker than expectations of -5.8.

Swaps are discounting a 13% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Cryptocurrency-exposed stocks moved lower on Tuesday as Bitcoin (^BTCUSD) fell more than -2%.  Coinbase Global (COIN) closed down more than -7%, and Galaxy Digital Holdings (GLXY) closed down more than -6%.  Also, Strategy (MSTR) and Riot Platforms (RIOT) closed down more than -4%, and MARA Holdings (MARA) closed down more than -3%. 

Alaska Air Group (ALK) closed down more than -4% to lead airline stocks lower after crude prices rose more than +2%, boosting fuel costs, and after the company forecast a Q2 adjusted loss per share of -$1.00, much wider than the consensus of -11 cents, and announced that it will suspend full-year guidance due to higher fuel costs. Also, United Airlines Holdings (UAL) and American Airlines Group (AAL) closed down more than -3%, and Southwest Airlines (LUV) closed down more than -2%.  In addition, Delta Air Lines (DAL) closed down more than -1%.

Mining stocks slumped on Tuesday as gold prices fell more than -2% and silver prices fell more than -4%. Coeur Mining (CDE) and Hecla Mining (HL) closed down more than -6%, and Anglogold Ashanti (AU) and Barrick Mining (B) closed down more than -5%.  Also, Newmont Corp (NEM) closed down more than -4%, and Freeport McMoRan (FCX) closed down more than -3%.

UnitedHealth Group (UNH) closed up more than +7% to lead health insurance stocks higher after reporting Q1 adjusted EPS of $9.23, well above the consensus of $6.57, and raising its full-year adjusted EPS estimate to above $18.25 from a previous view of $17.75.   Humana (HUM) closed up more than +4% on the news, Centene (CNC) and Elevance Health (ELV) closed up more than +2%, and CVS Health (CVS) closed up more than +1%.

Cybersecurity stocks moved higher on Tuesday, lending support to the broader market.  CrowdStrike Holdings (CRWD) closed up more than +3% to lead gainers in the Nasdaq 100.  Also, Palo Alto Networks (PANW), Fortinet (FTNT), and Zscaler (ZS) closed up more than +3%.  In addition, Okta (OKTA) closed up more than +2%, and Cloudflare (NET) closed up more than +1%.

Tractor Supply Co (TSCO) closed down more than -11% to lead losers in the S&P 500 after reporting Q1 net sales of $3.59 billion, below the consensus of $3.64 billion. 

Northrop Grumman (NOC) closed down more than -6% after forecasting full-year adjusted EPS of $27.40 to $27.90, below the consensus of $27.97.

Prudential Financial (PRU) closed down more than -5% after Nikkei reported that former employees of the company’s Gibraltar business are suspected of committing dozens of cases of financial fraud. 

Merk & Co (MRK) closed down more than -3% to lead losers in the Dow Jones Industrials after its Phase 3 trial with Eisai for treatment of advanced renal cell carcinoma did not meet its dual primary endpoints. 

Avis Budget Group (CAR) closed up more than +17% amid a short squeeze as two investors, SRS Investment Management and Pentwater Capital Management, own about 71% of the company’s shares.  According to S3 Partners data, the company's short interest as a percentage of its free float is currently 62%.

Northern Trust (NTRS) closed up more than +8% to lead gainers in the S&P 500 after reporting Q1 net interest income FTE of $661.6 million, above the consensus of $627.6 million.

D.R. Horton (DHI) closed up more than +5% after reporting Q2 net sales orders of 24,992, better than the consensus of 23,919, and raising its full-year revenue forecast to $34.5 billion from a previous estimate of $33.5 billion to $35.0 billion, stronger than the consensus of $33.4 billion.

Quest Diagnostics (DGX) closed up more than +4% after reporting Q1 net revenue of $2.90 billion, better than the consensus of $2.82 billion.

Arrowhead Pharmaceuticals (ARWR) closed up more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $100. 

Earnings Reports(4/22/2026)

AT&T Inc (T), Boeing Co/The (BA), Boston Scientific Corp (BSX), CME Group Inc (CME), Crown Castle Inc (CCI), CSX Corp (CSX), Elevance Health Inc (ELV), GE Vernova Inc (GEV), Globe Life Inc (GL), International Business Machine (IBM), Kinder Morgan Inc (KMI), Lam Research Corp (LRCX), Las Vegas Sands Corp (LVS), Masco Corp (MAS), Moody's Corp (MCO), NVR Inc (NVR), Otis Worldwide Corp (OTIS), Packaging Corp of America (PKG), Philip Morris International Inc (PM), Raymond James Financial Inc (RJF), Rollins Inc (ROL), ServiceNow Inc (NOW), Southwest Airlines Co (LUV), TE Connectivity PLC (TEL), Teledyne Technologies Inc (TDY), Tesla Inc (TSLA), Texas Instruments Inc (TXN), United Rentals Inc (URI), Vertiv Holdings Co (VRT), Westinghouse Air Brake Technol (WAB).