Betting on Restraint

Investors are starting to act as though the Middle East war is something the market can live with. That is a remarkable shift. The S&P 500 has already recovered the losses tied to the Iran conflict, and the Nasdaq 100 is back in positive territory for 2026. Wall Street is clearly betting that this crisis, however dangerous, will not keep getting worse.

That optimism rests mostly on diplomacy, or at least the hope of it. Reports that the United States and Iran could resume talks, possibly in Pakistan, gave traders the excuse they were looking for. Donald Trump said Iran had reached out and wanted a deal, while making clear that any agreement must prevent Tehran from getting a nuclear weapon. JD Vance added that progress had been made and that the next move belonged to Iran.

So even with the U.S. blockade of maritime traffic into and out of Iranian ports entering its second day, investors leaned back into risk. Oil, after briefly surging above $100 a barrel, slipped below that threshold again, with Brent dropping from roughly $104 to around $96. Treasury yields eased as bond prices rose. The dollar fell to a six-week low against a basket of currencies. The euro climbed. Gold gained support from the softer dollar.

First-quarter results have offered a mixed but not disastrous start. BlackRock posted stronger profit, helped by ETF inflows and performance fees. JPMorgan and Wells Fargo disappointed enough to send their shares lower. Citigroup and Johnson & Johnson remained in focus. In other corporate news, BP plc expected an unusually strong oil-trading result, even as its stock fell along with crude. LVMH reported weak sales and said the war had hurt business. Bloom Energy jumped after expanding its fuel-cell deal with Oracle to support AI and cloud infrastructure. FedEx said its CFO will step down once the freight spinoff is complete. United Airlines and American Airlines rose after news that United’s CEO had floated a possible merger.

The inflation question, however, has not gone away. March consumer-price data had already shown the strongest annual increase in nearly four years, largely because of gasoline and diesel. But the latest producer-price report offered at least a measure of relief: prices rose 4.0% from a year earlier, below the 4.6% expected, and climbed 0.5% month over month, well under the 1.1% forecast. That does not erase inflation pressure, and it certainly does not mean the war is harmless, but it does suggest that, for now, wholesale price pressures are not accelerating quite as badly as feared.

Officials such as Michael Barr will be watched closely for clues about what this means for rates. Treasury Secretary Scott Bessent has already taken the cautious line that the Fed is right to stay put and assess the consequences of the war.

Today's economic highlights:

Today's agenda includes: in Australia, the Westpac Consumer Confidence Index and Consumer Confidence Change, followed by NAB Business Confidence; In China, the Balance of Trade, Imports, and Exports YoY; In Germany, Wholesale Prices YoY and MoM; In the United States, PPI and Core PPI MoM, followed by speeches from several Fed members and the API Crude Oil Stock Change; In the United Kingdom, BoE Gov Bailey's speech; In the Euro Area, ECB President Lagarde's speech. See the full calendar here.

• Dollar index: 98.096
• Gold: $4,773
• Crude Oil (BRENT): $98.95 (WTI) $97.24
• United States 10 years: 4.29%
• BITCOIN: $74,420

In corporate news:

• Microsoft said its carbon removal program is still active, pushing back on speculation that it was abandoning those efforts.
• Prestige Estates Group announced a three-year strategic partnership with Autodesk.
• Oracle CEO Sicilia is scheduled to visit Japanese Prime Minister Sanae Takaichi on Wednesday afternoon.
• Corpay extended its foreign-exchange partnership with AC Milan under a new long-term agreement.
• Boeing will install SES in-cabin connectivity hardware during aircraft factory production, starting with the 737 and later the 787.
• EchoStar unit Hughes was selected by Air India to provide in-flight internet across part of its Airbus and Boeing widebody fleet.
• RTX unit Collins Aerospace will furnish seating products for Air Canada's new Airbus A321XLR fleet.
• Novo Nordisk partnered with OpenAI to deploy AI across its operations to speed drug discovery and improve efficiency through commercialization.
• Kambi Group and Google signed a multi-year esports data partnership covering major titles including League of Legends, Counter-Strike, Dota 2, and Valorant.
• A Bank of America survey showed investors were at their most bearish in 10 months in early April.
• Amazon is in advanced talks to acquire Globalstar, according to Bloomberg, as it seeks to strengthen its low-Earth-orbit satellite ambitions.
• Asian markets rose on hopes of further U.S.-Iran talks, though the Indonesian rupiah hit a record low and Singapore tightened monetary policy amid inflation concerns.
• McDonald's plans to add new cold drinks in the U.S., including specialty sodas and energy beverages, with a phased rollout starting next month.
• An analysis piece said Viktor Orban's electoral defeat in Hungary could remove a major political obstacle for broader European market sentiment and EU coordination.
• PolyPeptide has begun a review of strategic options after takeover speculation, though no transaction is guaranteed.
• Moody's warned the Philippines faces rising economic risks from the Middle East war, raising its inflation forecasts and cutting its growth outlook.
• Sazerac has approached Brown-Forman, but analysts see Pernod Ricard as the stronger fit in any potential tie-up with the Jack Daniel's owner.
• More than 1,000 Hollywood figures signed an open letter opposing Paramount Skydance's proposed acquisition of Warner Bros. Discovery, arguing it would further concentrate the media industry.
• OpenAI's reported $852 billion valuation is facing scrutiny from some investors as the company shifts strategy toward the enterprise market amid stronger competition.
• Ion Video confirmed it has held initial exploratory discussions with Meta Platforms, Alphabet, and other major technology companies.
• Texas Attorney General Ken Paxton is investigating Lululemon over possible PFAS in its activewear, while the company says it phased out the chemicals in fiscal 2023.
• A hacking group claims it stole nearly 80 million business records from Rockstar Games, though the company said only a limited amount of non-material information was accessed via a third-party breach.
• A Texas man was charged after allegedly throwing a Molotov cocktail at OpenAI CEO Sam Altman's home and attempting to set fire to the company's headquarters.
• U.S. Vice President J.D. Vance said Washington made substantial progress in talks with Iran and that the next move is up to Tehran.
• The Trump administration is considering ophthalmologist Houman Hemmati to lead the FDA's biologics center, according to media reports.
• Chevron agreed to an asset swap in Venezuela with PDVSA to deepen its focus on heavy-oil projects in the Orinoco Belt.
• The CEO of United Airlines, Scott Kirby, raised the possibility of a merger with American Airlines during a meeting with Donald Trump in late February, according to Reuters.
• Booking confirms that hackers have accessed its customers' data.
• Bloom Energy will supply up to 2.8 GW of fuel cells as part of an expanded agreement with Oracle.
• Today's key earnings reports: JPMorgan, Johnson & Johnson, Wells Fargo, Citigroup, BlackRock, Kering, Publicis, Givaudan, Sika…

Analyst Recommendations:

• Biogen Inc.: Piper Sandler & Co upgrades to overweight from neutral with a price target raised from USD 177 to USD 214.
• Ford Motor Company: UBS upgrades to buy from neutral with a target price of USD 15.
• Ge Vernova Inc.: Punto Research downgrades to sell from hold and raises the target price from USD 607.74 to USD 839.
• Lazard: Zacks downgrades to underperform from neutral and reduces the target price from USD 42.50 to USD 39.50.
• Nov Inc.: RBC Capital downgrades to sector perform from outperform with a target price of USD 21.
• Solstice Advanced Materials, Inc.: UBS downgrades to neutral from buy with a target price of USD 87.
• Viking Holdings Ltd: Rothschild & Co Redburn upgrades to buy from neutral with a target price of USD 72.
• Astera Labs, Inc.: Zacks maintains its neutral recommendation and raises the target price from USD 132 to USD 170.
• Bloom Energy Corporation: JP Morgan maintains its overweight recommendation and raises the target price from USD 166 to USD 231.
• Booking Holdings Inc.: Jefferies maintains its hold recommendation and reduces the target price from USD 4500 to USD 180.
• Cf Industries Holdings, Inc.: Goldman Sachs maintains its neutral recommendation and raises the target price from USD 103 to USD 132.
• Cleveland-Cliffs Inc: JP Morgan maintains its neutral recommendation and reduces the target price from USD 13 to USD 10.
• Comcast Corporation: Benchmark Co., LLC maintains its buy recommendation and raises the target price from USD 2.50 to USD 44.
• Costar Group, Inc.: Wolfe Research maintains its outperform rating and reduces the target price from USD 65 to USD 50.
• Equinix, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 1000 to USD 1220.
• Fair Isaac Corporation: Wolfe Research maintains its outperform rating and reduces the target price from USD 2050 to USD 1400.
• Graphic Packaging Holding Company: Citi maintains its neutral recommendation and reduces the target price from USD 13 to USD 10.
• Moderna, Inc.: Leerink Partners maintains its underperform recommendation and raises the target price from USD 12 to USD 21.
• Revolution Medicines, Inc.: Evercore ISI maintains its outperform rating and raises the target price from USD 140 to USD 200.
• The Trade Desk, Inc.: Zacks maintains its neutral recommendation and reduces the target price from USD 28 to USD 21.
• Toast, Inc.: Wells Fargo maintains its overweight recommendation and reduces the target price from USD 47 to USD 36.