Iran Ceasefire Skepticism Weighs on Stocks

The S&P 500 Index ($SPX) (SPY) today is down -0.64%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.16%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.05%.  June E-mini S&P futures (ESM26) are down -0.69%, and June E-mini Nasdaq futures (NQM26) are down -1.08%.

Stocks are under pressure today amid soaring oil prices, as uncertainty persists over Iran’s willingness to engage in talks on a ceasefire.  WTI crude oil prices are up more than +3% today after Axios reported the Pentagon is developing military options for a “final blow” in Iran that could include the use of ground forces and a massive bombing campaign.  If there is no progress in diplomatic talks and the Strait of Hormuz remains closed when President Trump’s deadline ends this weekend, US military escalation appears more likely.  President Trump said today that Iran had “better get serious soon, before it is too late, because once that happens, there is no turning back, and it won’t be pretty.” The jump in crude oil prices today has pushed bond yields higher, with the 10-year T-note yield up +3 bp to 4.36%.

Stocks bounced off their lows today, and crude oil fell from its highs after the Tasnim news agency said Iran has formally responded to a US ceasefire plan, detailing that it seeks guarantees that the war will not be repeated.

The weakness in chip makers today is also weighing on the broader market, following a new compression technique proposed by Google researchers that could reduce the memory needed for AI workloads.

Today’s US jobless claims report suggested the labor market is holding up.  US weekly initial unemployment claims rose +5,000 to 210,000, right on expectations. Weekly continuing claims fell -32,000 to a 1.75-year low of 1.819 million, showing a stronger labor market than expectations of 1.849 million.

The Organization for Economic Cooperation and Development (OECD) raised its G-20 inflation forecast for 2026 to 4.0% from a December estimate of 2.8%, due to the war in Iran.

There are concerns that the Iran war could escalate throughout the Middle East.  Saudi Arabia agreed to give the US military access to King Fahd Air Base, and the UAE closed an Iranian-owned hospital and club.  Iran’s Middle Eastern neighbors are growing frustrated with Iran, which has responded to US and Israeli attacks by hitting targets in several nearby nations.  

Crude oil prices (CLK26) remain high despite attempts to boost global supplies.  The IEA on March 11 released 400 million barrels from emergency oil stockpiles and said the war against Iran is disrupting 7.5% of global oil supply, and the conflict will cut global oil supply by 8 million bpd this month.  The closure of the Strait of Hormuz, through which about a fifth of the world’s oil and natural gas flows, has choked off oil and gas flows due to Iran’s attacks on shipping in the waterway and forced Gulf producers to cut output because they can’t export from the region.  Iran is also seeking to control ship transit through the Strait of Hormuz, asking vessels to provide lists of crew and cargo, along with voyage details and bills of lading if they want to travel through the waterway.  Goldman Sachs warns that crude prices could exceed the 2008 record high of close to $150 a barrel if flows through the Strait of Hormuz remain depressed through March.

The International Energy Agency said Monday that more than 40 energy sites across nine countries in the Middle East have been "severely or very severely" damaged, potentially prolonging disruptions to global supply chains once the war in Iran ends. 

The markets are discounting a 4% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets are lower today.  The Euro Stoxx 50 is down -0.86%.  China's Shanghai Composite closed down -1.09%.  Japan's Nikkei Stock 225 closed down -0.27%.

Interest Rates

June 10-year T-notes (ZNM6) today are down by -9 ticks.  The 10-year T-note yield is up +3.2 bp to 4.364%.  June T-notes are under pressure today from a +3% jump in WTI crude oil prices, which raises inflation expectations.  Also, today’s decline in US weekly continuing unemployment claims to a 1.75-year low signals labor market strength that is hawkish for Fed policy.  In addition, supply pressures are weighing on T-notes as the Treasury will auction $44 billion of 7-year T-notes later today. 

European government bond yields are moving higher today.  The 10-year German bund yield is up +8.5 bp to 3.043%.  The 10-year UK gilt yield is up +10.4 bp to 4.943%.

Eurozone Feb M3 money supply rose +3.0% y/y, weaker than expectations of +3.2% y/y.

The German Apr GfK consumer confidence index fell -3.2 to a 2-year low of -28.0, weaker than expectations of -27.3.

Swaps are discounting a 68% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Chip makers are under pressure today amid a new compression technique proposed by Google researchers that could reduce the memory required for AI workloads.  Sandisk (SNDK) and Lam Research (LRCX) are down more than -7%, and Applied Materials (AMAT), Advanced Micro Devices (AMD), Micron Technology (MU), Seagate Technology Holdings Plc (STX), and Western Digital (WDC) are down more than -5%.  Also, Intel (INTC) and KLA Corp (KLAC) are down more than -4%, and ASML Holding NV (ASML) is down more than -3%.  In addition, Nvidia (NVDA) is down more than -2% to lead losers in the Dow Jones Industrials. 

Mining stocks are falling today, with gold prices down more than -2% and silver prices down more than -4%. Coeur Mining (CDE), Southern Copper (SCCO), and Hecla Mining (HL) are down more than -4%, and Freeport McMoRan (FCX) is down more than -2%.  Also, Anglogold Ashanti (AU) is down more than -1%.

MillerKnoll (MLKN) is down more than -21% after reporting Q3 adjusted EPS of 43 cents, below the consensus of 45 cents, and forecasting Q4 adjusted EPS of 49 cents to 55 cents, weaker than the consensus of 61 cents.

Meta Platforms (META) is down more than -5%, and Alphabet (GOOGL) is down more than -1% after several analysts said litigation over social media’s addictive design will be an ongoing headline risk in 2026.

Timken Co (TKR) is down more than -1% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $100.

Kodiak Sciences (KOD) is up more than +51% after releasing efficacy data from a late-stage trial of its drug Zenkuda for diabetic retinopathy that showed statistical improvement in a control group.

United Natural Foods (UNFI) is up more than +6% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $56. 

Tyson Foods (TSN) is up more than +3% after Mizuho Securities initiated coverage on the stock with an outperform rating and a price target of $72.

ARM Holdings Plc (ARM) is up more than +1% after Needham & Co upgraded the stock to buy from hold with a price target of $200.

Wolverine Worldwide (WWW) is up more than +1% after Needham & Co initiated coverage on the stock with a buy recommendation and a price target of $21.

Earnings Reports(3/26/2026)

Argan Inc (AGX), BV Financial Inc (BVFL), C&F Financial Corp (CFFI), CapsoVision Inc (CV), Commercial Metals Co (CMC), Designer Brands Inc (DBI), Hub Group Inc (HUBG), Lovesac Co/The (LOVE), Lucid Diagnostics Inc (LUCD), Lumexa Imaging Holdings Inc (LMRI), Newsmax Inc (NMAX), Nkarta Inc (NKTX), Oxford Industries Inc (OXM), RCM Technologies Inc (RCMT), REX American Resources Corp (REX), SBC Medical Group Holdings Inc (SBC), Shoe Carnival Inc (SCVL), SKYX Platforms Corp (SKYX), Southland Holdings Inc (SLND), Upstream Bio Inc (UPB), Utah Medical Products Inc (UTMD), Whitefiber Inc (WYFI), XCF Global Inc (SAFX).