The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.08%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.18%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.04%. June E-mini S&P futures (ESM26) rose +0.08%, and June E-mini Nasdaq futures (NQM26) rose +0.04%.
Stock indexes recovered from early losses on Tuesday and settled slightly higher in hopes of an extension to President Trump’s Tuesday night deadline for Iran to open the Strait of Hormuz. Pakistan urged the US for a two-week extension of President Trump’s deadline while asking Iran to open the Strait of Hormuz, and Iran said it is “positively reviewing” Pakistan’s proposal.
Stock initially moved lower on Tuesday as crude oil prices climbed to a 4-week high ahead of Tuesday night’s deadline for Iran to agree to a ceasefire or face escalation of the war. Mr. Trump insists any deal must ensure uninterrupted transit through the Strait of Hormuz or he will destroy Iran’s bridges and power plants. The Wall Street Journal reported the US military is making preparations for potential strikes on energy targets in Iran.
Crude oil prices (CLK26) remain volatile, fluctuating between gains and losses amid news headlines about Iran. Crude rallied on Tuesday after Axios reported that the US conducted strikes on military targets on Kharg Island, and Israel told Iranians to refrain from using their country’s railway network. Also, Iran pressed on with attacks across the Persian Gulf, dimming chances for peace.
Tuesday’s US economic news was mixed for stocks. On the positive side, Feb capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +0.6% m/m, stronger than expectations of +0.5% m/m. Conversely, Feb consumer credit rose by $9.484 billion, below expectations of $10.250 billion.
Dovish comments on Tuesday from New York Fed President John Williams were supportive of stocks, as he said the outlook for underlying price pressures in the US was largely unchanged, despite his expectation that higher energy costs stemming from the war in Iran will boost overall inflation. He added that he anticipated core inflation would rise by just one or two tenths of a percentage point.
The markets are discounting a 3% 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 -1.05%. China’s Shanghai Composite closed up +0.26%. Japan’s Nikkei Stock 225 closed up +0.03%.
Interest Rates
June 10-year T-notes (ZNM6) on Tuesday closed up +1.5 ticks. The 10-year T-note yield was unchanged at 4.331%. T-note prices recovered from early losses on Tuesday and posted modest gains on increased safe-haven demand for T-notes ahead of President Trump’s deadline of tonight for Iran to reopen the Strait of Hormuz. Also, dovish comments from New York Fed President John Williams were bullish for T-notes when he said the outlook for underlying price pressures in the US was largely unchanged, despite his expectations of higher energy costs stemming from the war in Iran. T-notes also found support on strong demand for the Treasury’s $58 billion auction of 3-year T-notes that had a bid-to-cover ratio of 2.68, above the 10-auction average of 2.63.
T-notes initially moved lower on Tuesday after WTI crude oil prices raced to a 4-week high, boosting inflation expectations as the 10-year breakeven inflation rate rose to a 2-week high of 2.383%.
European government bond yields moved higher on Tuesday. The 10-year German bund yield rose +9.2 bp to 3.084%. The 10-year UK gilt yield rose +7.1 bp to 4.904%.
The Eurozone Apr Sentix investor confidence index fell -16.1 to a 2.5-year low of -19.2, weaker than expectations of -8.0.
The Eurozone Mar S&P composite PMI was revised upward by +0.2 to 50.7 from the previously reported 50.5.
ECB Governing Council member Pierre Wunsch said the ECB might have to increase interest rates several times if the Iran war drags on.
The UK Mar S&P services PMI was revised downward by -0.7 to an 11-month low of 50.5 from the previously reported 51.2.
Swaps are discounting a 68% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.
US Stock Movers
Managed care stocks rallied on Tuesday after the Centers for Medicare & Medicaid Services finalized a 2.48% rate hike for health insurers in 2027. UnitedHealth Group (UNH) closed up more than +9% to lead gainers in the Dow Jones Industrials. Also, Humana (HUM) closed up more than +7%, and CVS Health (CVS) closed up more than +6%. In addition, Elevance Health (ELV) closed up more than +3% and Centene (CNC) closed up more than +2%.
Airline stocks and cruise line operators settled lower on Tuesday after crude oil prices rose to a 4-week high, raising fuel costs and cutting into corporate profits. Norwegian Cruise Line Holdings (NCLH), Carnival (CCL), and Royal Caribbean Cruises Ltd (RCL) closed down more than -3%. Also, Alaska Air Group (ALK) closed down more than -2%, and United Airlines Holdings (UAL) and Delta Air Lines (DAL) closed down more than -1%. In addition, American Airlines Group (AAL) closed down -0.83% and Southwest Airlines (LUV) closed down -0.81%.
Homebuilders slid on Tuesday after Seaport Global Securities downgraded the sector. Lennar (LEN), KB Home (KBH), and PulteGroup (PHM) closed down more than -3% after being double-downgraded to sell from buy. DR Horton (DHI) and Toll Brothers (TOL) also closed down more than -3% after Seaport Global Securities downgraded the stocks to neutral from buy.
Paramount Skydance (PSKY) closed up more than +10% to lead gainers in the S&P 500, and it entered into equity syndication agreements with a vehicle of the Abu Dhabi sovereign wealth fund, L’imad Holding, to support its acquisition of Warner Bros. Discovery.
Broadcom (AVGO) closed up more than +6% to lead gainers in the Nasdaq 100 after announcing a long-term agreement with Google to develop and supply Tensor Processing Units and confirming plans to power some of Anthropic’s operations.
Intel (INTC) closed up more than +4% after saying it will join the Terafab project with SpaceX, XAI, and Tesla to help refactor silicon fab technology.
FuboTV (FUBO) closed up more than +3% after Barrington Research upgraded the stock to outperform from market perform with a price target of $16.
CF Industries Holdings (CF) closed up more than +2% after RBC Capital Markets boosted its price target on the stock to $125 from $100.
Trade Desk (TTD) closed down more than -6% after Ad Week reported that three key executives are exiting the company, citing executive vice president Colley.
Kimberly-Clark (KMB) closed down more than -4% after Piper Sandler said a large fire at the company’s distribution center in Ontario, California, will add “uncertainty” and likely “disruptions” to the company’s operations.
ARM Holdings Plc (ARM) closed down more than -3% after Morgan Stanley downgraded the stock to equal weight from overweight.
Tractor Supply Co (TSCO) closed down more than -3% after Bank of America Global Research downgraded the stock to neutral from buy.
Apple (AAPL) closed down more than 2% after Nikkei Asia reported that the company is seeing setbacks in the engineering test phase of its foldable iPhone, which could push back its production and shipment schedule.
First Interstate BancSystem (FIBK) closed down more than -1% after UBS downgraded the stock to sell from neutral with a price target of $30.
Earnings Reports(4/8/2026)
Constellation Brands Inc (STZ), Delta Air Lines Inc (DAL), RPM International Inc (RPM).
