Stocks Settle Lower on US-Iran Stalemate

The S&P 500 Index ($SPX) (SPY) on Thursday closed down -0.41%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.57%.  June E-mini S&P futures (ESM26) fell -0.42%, and June E-mini Nasdaq futures (NQM26) fell -0.59%.

Stock indexes erased early gains on Thursday and settled lower as peace talks with Iran remain in limbo.  The US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire.  The US said it was waiting for a response from Iran before peace talks could restart, and Iran said it will not resume negotiations while a US naval blockade on its ports is in place.  Stock losses accelerated on Thursday amid signs the war in Iran will persist after President Trump said a deal with Iran will only be made "when it's appropriate and good" for the US and its allies.

Stock index initially moved higher on Thursday, with the S&P 500 and Nasdaq 100 posting new all-time highs amid a rally in chipmakers that boosted the broader market.  Texas Instruments rose more than +19% to lead chipmakers higher after reporting strong earnings.  Other positive earnings were also supportive of the market, with United Rentals up +22% and Comcast up more than +7% after reporting better-than-expected Q1 revenue. Also, Keurig Dr. Pepper rose more than +7% after reporting stronger-than-expected Q1 net sales.

The weakness in software stocks on Thursday was a negative factor for the broader market, with ServiceNow falling more than -17% after reporting disappointing earnings and saying the war in the Middle East has delayed some sales deals.  Also, IBM fell more than -8% after reporting Q1 results that featured an underwhelming read for its software business.

Thursday’s US economic news was mixed for stocks.  Weekly initial unemployment claims rose by +6,000 to 214,000, showing a weaker labor market than expectations of 210,000. Also, the Mar Chicago Fed national activity index fell -0.23 to a 4-month low of -0.20, weaker than expectations of -0.13.  Conversely, the Apr S&P manufacturing PMI rose +1.7 to 54.0, stronger than expectations of 52.5 and the strongest level in nearly 4 years.

WTI crude oil prices (CLM26) rose more than +3% on Thursday as the Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis.  Gains in crude oil accelerated on Thursday after Axios reported that Iran laid more mines in the Strait of Hormuz this week, and President Trump ordered the US Navy to "shoot and kill" any Iranian boats laying mines with "no hesitation."  The ongoing 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.

Earnings season continues this week.  So far, 81% of the 123 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 lower on Thursday.  The Euro Stoxx 50 fell to a 2-week low and closed down -0.19%.  China's Shanghai Composite fell from a 1.25-month high and closed down -0.32%.  Japan's Nikkei Stock 225 fell from a record high and closed down -0.75%.

Interest Rates

June 10-year T-notes (ZNM6) on Thursday closed down -7.5 ticks.  The 10-year T-note yield rose +1.9 bp to 4.322%.  Jun T-notes fell to a 1.5-week low on Thursday, and the 10-year T-note yield rose to a 1.5-week high of 4.349%.  Soaring crude oil prices on Thursday pushed inflation expectations higher and weighed on T-notes, as the 10-year breakeven inflation rate rose to a 5-week high of 2.429%. Losses in T-notes were limited after weekly US jobless claims rose more than expected, a dovish factor for Fed policy. 

European government bond yields moved higher on Thursday.  The 10-year German bund yield rose +0.1 bp to 3.009%.  The 10-year UK gilt yield rose to a 3.5-week high of 4.973% and finished up by +2.9 bp to 4.939%.

The Eurozone Apr S&P manufacturing PMI unexpectedly rose +0.6 to 52.2, stronger than expectations of a decline to 50.9 and the fastest pace of expansion in nearly four years.  However, the Apr composite PMI fell -2.1 to 48.6, weaker than expectations of 50.1 and the weakest level in 17 months.

Eurozone Mar new car registrations rose +12.5% y/y to 1.158 million units, the biggest increase in nearly two years.

The UK Apr S&P manufacturing PMI unexpectedly rose +2.6 to 53.6, stronger than expectations of a decline to 50.3 and the fastest pace of expansion in nearly four years.

Swaps are discounting a 9% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

ServiceNow (NOW) closed down more than -17% to lead software stocks lower and lead losers in the S&P 500 after cutting its full-year subscription adjusted gross margin forecast to 81.5% from 82%, weaker than the consensus of 82.1%.  Also, Workday (WDAY) closed down more than -9% to lead losers in the Nasdaq 100, and Salesforce (CRM) closed down more than -8% to lead losers in the Dow Jones Industrials. In addition, IBM (IBM) and Atlassian (TEAM) closed down more than -8%, and Intuit (INTU), Adobe Systems (ADBE), and Autodesk (ADSK) closed down more than -6%.  Finally, Oracle (ORCL) closed down more than -5%, and Microsoft (MSFT) closed down -4%. 

Texas Instruments (TXN) closed up more than +19% to lead chipmakers higher and gainers in the Nasdaq 100 after reporting Q1 revenue of $4.83 billion, better than the consensus of $4.53 billion, and forecasting Q2 revenue of $5.00 billion to $5.40 billion, well above the consensus of $4.85 billion.  Also, ON Semiconductor (ON) and Microchip Technology (MCHP) closed up more than +9%, and NXP Semiconductors NV (NXPI) closed up more th +6%.  In addition, Analog Devices (ADI) and Marvell Technology (MRVL) closed up more than +5%, and ARM Holdings Plc (ARM) closed up more than +3%.  Finally, Intel (INTC) closed up more than 2%.

ASGN Inc (ASGN) closed down more than -51% after reporting Q1 revenue of $968.3 million, below the consensus of $972.9 million, and forecasting Q2 revenue of $970 million to $1.00 billion, weaker than the consensus of $1.02 billion. 

Medpace Holdings (MEDP) closed down more than -22% after forecasting full-year EPS of $16.68 to $17.50, the midpoint below the consensus of $17.12. 

Lululemon Athletica (LULU) closed down more than -13% on disappointment with the naming of Heidi O’Neill as the new CEO, a surprise pick with no previous experience as a CEO. 

Thermo Fisher Scientific (TMO) closed down more than -9% after reporting Q1 organic revenue growth of +1.00%, weaker than the consensus of +1.17%. 

Las Vegas Sands (LVS) closed down more than -8% after raising its full-year capital expenditure forecast to $1.49 billion from a previous forecast of $1.33 billion, well above the consensus of $1.27 billion.

Tesla (TSLA) closed down more than -3% after boosting its full-year capital expenditure to more than $25 billion to support its push into AI and robotics. 

Honeywell International (HON) closed down more than -2% after reporting Q1 sales of $9.14 billion, below the consensus of $9.30 billion.   

United Rentals (URI) closed up more than +22% to lead gainers in the S&P 500 after reporting Q1 revenue of $3.99 billion, above the consensus of $3.88 billion, and raising its full-year revenue forecast to $16.9 billion-$17.4 billion from a previous forecast of $16.8 billion-$17.3 billion, stronger than the consensus of $17.07 billion. 

West Pharmaceutical Services (WST) closed up more than +12% after reporting Q1 net sales of $844.9 million, well above the consensus of $780.4 million, and raising its full-year net sales forecast to $3.30 billion-$3.35 billion from a previous estimate of $3.22 billion-$3.28 billion, better than the consensus of $3.25 billion. 

Comcast (CMCSA) closed up more than +7% after reporting Q1 revenue of $31.46 billion, stronger than the consensus of $30.35 billion. 

Keurig Dr. Pepper (KDP) closed up more than +7% after reporting Q1 net sales of $3.98 billion, above the consensus of $3.83 billion. 

CSX Corp. (CSX) closed up more than +6% after reporting Q1 operating income of $1.25 billion, higher than the consensus of $1.14 billion.

Hasbro (HAS) closed up more than +6% after reporting preliminary Q1 net revenue of $970 million to $985 million, well above the consensus of $908.6 million. 

Earnings Reports(4/24/2026)

Charter Communications Inc (CHTR), First Hawaiian Inc (FHB), Gentex Corp (GNTX), Hasbro Inc (HAS), HCA Healthcare Inc (HCA), Norfolk Southern Corp (NSC), Procter & Gamble Co/The (PG), SLB Ltd (SLB), Southern Copper Corp (SCCO), Western Union Co/The (WU).