June S&P 500 E-Mini futures (ESM26) are up +0.51%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.81% this morning, pointing to a higher open on Wall Street after the long weekend as hopes for a ceasefire in the U.S. war with Iran outweighed a series of aggressive threats from President Trump toward Tehran.
Axios reported on Sunday that the U.S., Iran, and regional mediators are negotiating terms for a potential 45-day ceasefire that could pave the way for a lasting end to the war. The report noted that the likelihood of reaching a deal within the next 48 hours is low. President Trump told Axios that he would be “blowing up everything over there” if Iran does not make a deal. Mr. Trump said he plans to hold a news conference at 1 p.m. local time on Monday and referenced a Tuesday 8 p.m. deadline in a post on Truth Social, without providing further details.
Over the weekend, President Trump delivered increasingly aggressive threats to target Iran’s power plants beginning Tuesday and unleash “Hell” on the country. Iran rejected Trump’s latest ultimatum to reopen the Strait of Hormuz, stating it would fully resume operations only after war-related damages are compensated. Meanwhile, Tehran continued targeting energy facilities in neighboring Gulf states, including Kuwait’s oil headquarters.
Still, the price of WTI crude dropped over -1% on Monday after reports indicated that more ships had transited the Strait of Hormuz.
Also aiding sentiment was unexpectedly strong U.S. jobs data released last Friday, when U.S. stock markets were closed for the Good Friday holiday.
Beyond the Middle East conflict, investors are looking ahead to a pair of U.S. inflation reports and the minutes of the Federal Reserve’s latest policy meeting this week.
In Thursday’s trading session, Wall Street’s major equity averages closed mixed. SBA Communications (SBAC) jumped over +18% and was the top percentage gainer on the S&P 500 after Bloomberg reported that the company was exploring options, including a potential sale, after receiving preliminary takeover interest. Also, Globalstar (GSAT) surged more than +13% after the Financial Times reported that Amazon was in talks to acquire the company. In addition, Intel (INTC) rose over +4% and was the top percentage gainer on the Nasdaq 100 after announcing that it had agreed to regain full control of its chip plant in Ireland by repurchasing Apollo Global Management’s stake for $14.2 billion. On the bearish side, Tesla (TSLA) slumped more than -5% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the company reported weaker-than-expected Q1 vehicle deliveries.
The Labor Department’s report released on Friday showed that nonfarm payrolls rose by 178K in March, well above expectations of 65K and the strongest gain since the end of 2024. Also, the U.S. unemployment rate unexpectedly fell to 4.3% in March, stronger than expectations of no change at 4.4%. In addition, U.S. March average hourly earnings rose +0.2% m/m and +3.5% y/y, weaker than expectations of +0.3% m/m and +3.7% y/y.
“This report tells us next to nothing about the Iran war’s impact on the job market,” Comerica Bank chief economist Bill Adams said. “The Fed will hold rates steady for at least the next few decisions as they wait to understand the war’s effects.”
Dallas Fed President Lorie Logan said on Thursday that the Middle East conflict is increasing the risks of both higher inflation and weakness in the labor market. If the conflict is resolved swiftly and the Strait of Hormuz reopens, the effects on the economy and the labor market could be limited, Logan said. But “if the conflict continues and it takes quite some time to reopen the strait, then there could be more adverse impacts.”
U.S. rate futures have priced in a 99.5% probability of no rate change at the conclusion of the Fed’s April meeting, with a 13.1% chance of a rate cut by the end of 2026.
This week, investors will be closely watching a pair of U.S. inflation reports: March’s Consumer Price Index and February’s core personal consumption expenditures price index, the Fed’s preferred inflation gauge. The CPI report will be the main highlight, providing insights into how the surge in energy prices driven by the Middle East conflict has filtered into broader inflation. “The upcoming CPI reading for March will show the initial impact of soaring energy markets, even if the U.S. is somewhat insulated by being a net exporter of oil and gas,” AJ Bell analysts said in a note. Economists anticipate the largest one-month increase in headline inflation since 2022. At the same time, the core PCE price index will provide a snapshot of price pressures before the conflict erupted. The final estimate of fourth-quarter U.S. gross domestic product will also attract attention. Other noteworthy data releases include U.S. Durable Goods Orders, Core Durable Goods Orders, Consumer Credit, Initial Jobless Claims, Personal Spending, Personal Income, Factory Orders, and the University of Michigan’s Consumer Sentiment Index (preliminary).
Market participants will also be monitoring the Fed’s minutes from the March 17-18 meeting, set for release on Wednesday. The FOMC kept interest rates unchanged last month, and the minutes will provide insight into how the decision was made. Moreover, the minutes could shed light on policymakers’ concerns about inflation or the potential economic effects stemming from the Middle East conflict. Meanwhile, Fed Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee are scheduled to speak this week.
In addition, Delta Air Lines (DAL) and Constellation Brands (STZ) are slated to report their quarterly results this week, ahead of Big Banks kicking off first-quarter earnings season the following week.
Today, investors will focus on the U.S. ISM Non-Manufacturing PMI, which is set to be released in a couple of hours. Economists expect the March ISM services index to be 54.8, compared to the previous value of 56.1.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.36%, up +0.97%.
All major European indexes are closed today in observance of Easter Monday.
Japan’s Nikkei 225 Stock Index (NIK) closed up +0.55%, while China’s financial markets were closed for a holiday.
Japan’s Nikkei 225 Stock Index closed higher today as sentiment improved after a report of a potential ceasefire between the United States and Iran, as well as news that some vessels had transited the Strait of Hormuz. Axios reported on Sunday that the U.S., Iran, and several regional mediators are negotiating terms for a possible 45-day ceasefire that could pave the way for a lasting end to the war. Tareck Horchani, head of sales trading prime brokerage at Maybank Securities, said, “Asian markets in particular tend to react quickly to any sign that worst-case scenarios, like a full disruption of oil flows, might be avoided.” Retail and chip stocks led the gains on Monday. Still, the benchmark index finished well below its session highs as investors began offloading stocks after it hit the psychologically important 54,000 level. Meanwhile, benchmark Japanese government bond yields climbed to a new 27-year high on Monday as caution mounted ahead of a 30-year debt auction in the following session, with elevated oil prices and a weaker yen fueling inflation concerns. JGB yields also tracked Treasury yields higher following stronger-than-expected U.S. payrolls data. In other news, the Bank of Japan said on Monday that some regional economies may deteriorate due to soaring oil prices and supply disruptions caused by the Middle East conflict. “As uncertainty heightens, some firms worried that rising prices, mainly for energy, could hurt corporate profit and consumption,” the bank said in a quarterly report on regional economies. The assessment contrasted with the board’s hawkish discussions centered on inflation risks from the conflict, underscoring uncertainty over whether the BOJ could hike rates this month. However, the BOJ kept its upbeat economic assessment unchanged for all nine regions, with consumption remaining resilient on the back of inbound tourism and rising wages. Investor focus this week is on Japan’s wage data for February, with all eyes on the inflation-adjusted gauge after it turned positive in January for the first time in over a year. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +42.07% to 38.60.
China’s Shanghai Composite Index was closed today for the Qingming Festival (also known as Tomb-Sweeping Day). Mainland China’s financial markets will reopen tomorrow.
Pre-Market U.S. Stock Movers
The Magnificent Seven stocks gained in pre-market trading, with Tesla (TSLA) and Meta Platforms (META) rising over +1%.
Chip stocks advanced in pre-market trading, with Micron Technology (MU) rising over +3% and Marvell Technology (MRVL) gaining nearly +2%.
Cryptocurrency-exposed stocks rose in pre-market trading, with the price of Bitcoin up more than +1%. Strategy (MSTR) is up over +4%. Also, Coinbase (COIN) and MARA Holdings (MARA) are up more than +3%.
Netflix (NFLX) gained over +1% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a price target of $120.
Carvana Co. (CVNA) fell more than -1% in pre-market trading after BofA downgraded the stock to Neutral from Buy.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - April 6th
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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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