Stocks Rally on US-Iran Peace Hopes and Cooler PPI Growth
Stock indexes are rallying today, with the S&P 500 at a 1.5-month high, the Dow Jones Industrial Average at a 5-week high, and the Nasdaq 100 at a 2.25-month high. Optimism that the US and Iran will extend the two-week ceasefire has knocked crude oil prices sharply lower and pushed stocks higher. Reuters reported today that the US and Iran are considering negotiations to extend a two-week ceasefire that expires on April 22, and that they could resume talks this week in Pakistan. There are also reports that Iran might pause shipments through the Strait of Hormuz to avoid sparking an incident with the US military. The news knocked crude oil prices down by more than -5%.
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The US military began a naval blockade of the Strait of Hormuz on Monday, and President Trump threatened to retaliate in the event of Iranian resistance. Iran said it would target all ports in and close to the Persian Gulf if its own shipping hubs are threatened.
The stock market saw support after today’s US March PPI report of +0.5% m/m and +4.0% y/y, which was weaker than market expectations of +1.1% m/m and +4.6% y/y. The March core PPI report of +0.1% m/m and +3.8% y/y was weaker than market expectations of +0.4% m/m and +4.1% y/y. The report suggested that higher fuel prices are only slowly filtering into US inflation statistics.
A positive factor for the stock market is that the Senate Banking Committee will hold a hearing next week on Kevin Warsh as the new Fed Chair. South Carolina Senator Tim Scott said he is optimistic that the Trump administration will soon drop its investigation into Fed Chair Powell, allowing Senator Thom Tillis to vote in favor of approving Kevin Warsh as the new Fed Chair and moving his nomination out of the Senate Banking Committee and to the full Senate for a vote. Mr. Tillis has said he will not vote in favor of Mr. Warsh until the Trump administration drops its threat to prosecute Fed Chair Powell for cost overruns on the Fed building.
WTI crude oil prices (CLK26) are down by more than -5% today on hopes that the US and Iran will resume negotiations to end the war. On Monday, the US vowed to blockade all vessels passing through the Strait of Hormuz that call at Iranian ports or were headed there. The 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. Iran has been able to export crude oil during the war, exporting about 1.7 million bpd in March.
Earnings season begins this week as money center banks report, with Q1 S&P 500 earnings 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 are higher today. The Euro Stoxx 50 rose to a 6-week high and is up by +1.24%. China’s Shanghai Composite climbed to a 3.5-week high and closed up +0.95%. Japan’s Nikkei Stock 225 rallied to a 6-week high and closed up +2.43%.
Interest Rates
June 10-year T-notes (ZNM6) today are up by +3 ticks. The 10-year T-note yield is down -1.8 bp at 4.276%. T-note prices are also seeing support from today’s favorable PPI report. Also, today’s -5% plunge in WTI crude oil prices has knocked inflation expectations lower, a bullish factor for T-notes. Gains in T-notes are limited as stocks rally today from hopes for an end to the US-Iran war.
European government bond yields are moving lower today. The 10-year German bund yield is down -6.3 bp to 3.029%. The 10-year UK gilt yield is down -7.9 bp to 4.790%.
ECB President Christine Lagarde said the Eurozone economy is “between the baseline and the adverse” projections in the ECB’s base case, reflecting the war in Iran.
ECB Governing Council member Olli Rehn said faster inflation due to the Iran war doesn’t make an interest rate hike “self-evident.”
Swaps are discounting a 28% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.
US Stock Movers
Most of the Magnificent Seven are trading higher, led by gains of more than 3% in Meta Platforms (META) and Tesla (TSLA). Also, Amazon.com (AMZN), Nvidia (NVDA), and Alphabet (GOOGL) are up more than +2%. In addition, Microsoft (MSFT) is up more than +1%, and Apple (AAPL) is the lone decliner, down -0.45%.
Cryptocurrency-exposed stocks are moving higher today, with the price of Bitcoin (^BTCUSD) up more than +2% at a 1-month high. Riot Platforms (RIOT) and Galaxy Digital Holdings (GLXY) are up more than +7%, and Strategy (MSTR) is up more than +6% to lead gainers in the Nasdaq 100. Also, Coinbase Global (COIN) is up more than +6%, and MARA Holdings (MARA) is up more than +4%.
Energy producers and service providers are falling today, with WTI crude down more than -5%. Apa Corp (APA) is down more than -5% to lead losers in the S&P 500. Also, Devon Energy (DVN), ConocoPhillips (COP), and Occidental Petroleum (OXY) are down more than -4%. In addition, Chevron (CVX) is down more than -3% to lead losers in the Dow Jones Industrials, and Exxon Mobil (XOM), Diamondback Energy (FANG), and Valero Energy (VLO) are down more than -2%.
Travere Therapeutics (TVTX) is up more than +33% after the US FDA approved the company’s Filspari medication to reduce proteinuria in patients 8 years and older with focal segmental glomerulosclerosis without nephrotic syndrome.
Bloom Energy (BE) is up more than +19% after expanding its partnership with Oracle to support the buildout of AI and cloud computing infrastructure.
Globalstar (GSAT) is up more than +9% on reports that Amazon.com is in advanced talks to acquire the company.
American Airlines Group (AAL) is up more than +8% after United Airlines Holdings CEO Kirby floated a possible combination with the company. United Airlines Holdings (UAL) is up +2%.
BlackRock (BLK) is up +4% after better-than-expected Q1 adjusted earnings, while assets under management were in line with the consensus.
CoreWeave (CRWV) is up more than +4% after Bernstein raised its price target on the stock to $67 from $56.
Citigroup (C) is up more than +1% after reporting Q1 investment banking revenue of $1.33 billion, better than the consensus of $1.25 billion.
CarMax (KMX) is down more than -13% after reporting a Q1 loss per share of -85 cents versus a profit of +58 cents in the year-ago period.
Wells Fargo & Co (WFC) is down more than -5% after reporting Q1 net interest income of $12.10 billion, below the consensus of $12.27 billion.
Dell Technologies (DELL) is down more than -3%, and HP Inc. (HPQ) is down more than -1% after Nvidia denied a report that it was seeking to acquire one or both of the companies.
Earnings Reports(4/14/2026)
Albertsons Cos Inc (ACI), Blackrock Inc (BLK), CarMax Inc (KMX), Citigroup Inc (C), Johnson & Johnson (JNJ), JPMorgan Chase & Co (JPM), Wells Fargo & Co (WFC).
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