The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.72%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.48%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.18%.  June E-mini S&P futures (ESM26) rose +0.74%, and June E-mini Nasdaq futures (NQM26) rose +1.15%.

Stock indexes extended Tuesday’s sharp rally on Wednesday, with the Dow Jones Industrials posting a 2-week high on mounting optimism that the war in the Middle East is nearing a conclusion.   President Trump said Wednesday that he foresaw the US ending the war with Iran within two to three weeks.  Mr. Trump said Iran has asked for a ceasefire, which he will consider when the Strait of Hormuz is “open, free and clear.”  Meanwhile, the US and Israeli forces kept up their bombardment of Iran, while Israel, Bahrain, Kuwait, and the UAE all reported attacks by Iran, with Qatar saying a fuel oil tanker was struck in Qatari waters. 

Stocks remained higher on Wednesday amid better-than-expected US economic news on Mar ADP employment, Feb retail sales, and Mar ISM manufacturing activity.

US MBA mortgage applications fell -10.4% in the week ended March 27, with the purchase mortgage sub-index down -2.6% and the refinancing sub-index down -17.3%.  The average 30-year fixed rate mortgage rose +14 bp to a 7-month high of 6.57% from 6.43% in the prior week.

The US Mar ADP employment change rose by +62,000, stronger than expectations of +40,000.

US Feb retail sales rose +0.6% m/m, stronger than expectations of +0.5% m/m, and Feb retail sales ex-autos rose +0.5% m/m, stronger than expectations of +0.3% m/m.

The US Mar ISM manufacturing index unexpectedly rose +0.3 to 52.7, stronger than expectations of a decline to 52.3 and the strongest pace of expansion in 3.5 years.  The Mar ISM prices paid sub-index rose +7.8 to a 3.75-year high of 78.3, stronger than expectations of 74.0.

Hawkish comments on Wednesday from St. Louis Fed President Alberto Musalem were bearish for stocks, as he said risks are rising to both inflation and employment and added, "I expect the current setting of the policy rate will remain appropriate for some time."

President Trump will give a televised address to the country at 9 pm Eastern time on Wednesday night to provide an “important update” on Iran. He said Iran could still reach a deal with the US, but that an agreement with Iran isn’t a prerequisite for ending the war. 

Crude oil prices (CLK26) fell more than -1% on Wednesday on hopes for an end to the Iran war and a reopening of the Strait of Hormuz.  The Wall Street Journal reported on Wednesday that the UAE is preparing to help the US and other allies open the Strait of Hormuz by force and is lobbying for a United Nations Security Council resolution authorizing such action.

The markets are discounting a 1% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets settled higher on Wednesday.  The Euro Stoxx 50 climbed to a 2-week high and closed up +2.93%.  China's Shanghai Composite rose to a 1.5-week high and closed up +1.46%.  Japan's Nikkei Stock 225 closed up sharply by +5.24%.

Interest Rates

June 10-year T-notes (ZNM6) on Wednesday closed down by -2 ticks.  The 10-year T-note yield rose by +0.6 bp to 4.323%.  June T-notes fell from a 1.5-week high on Wednesday, and the 10-year T-note yield moved higher from a 1.5-week low of 4.257%.  T-notes gave up an early advance on Wednesday due to stronger-than-expected US ADP, retail sales, and ISM manufacturing reports.  Also, price pressures weighed on T-notes after the Mar ISM prices paid sub-index rose more than expected to a 3.75-year high.  In addition, hawkish comments on Wednesday from St. Louis Fed President Alberto Musalem undercut T-note prices when he said, "I expect the current setting of the policy rate will remain appropriate for some time." 

T-notes initially moved higher today on Wednesday after WTI crude oil prices fell more than -1%, easing inflation expectations.  Also, optimism that a resolution to the Iran war will lead to lower energy prices, allowing the Fed to cut interest rates, is supportive of T-note prices. 

European government bond yields moved lower on Wednesday.  The 10-year German bund yield dropped to a 2-week low of 2.931% and finished down -1.8 bp to 2.986%.  The 10-year UK gilt yield fell to a 2-week low of 4.777% and finished down -8.6 bp to 4.830%.

The Eurozone Mar S&P manufacturing PMI was revised upward by +0.2 to 51.6 from the previously reported 51.4, the strongest pace of expansion in 3.75 years.

The Eurozone Feb unemployment rate unexpectedly rose +0.1 to 6.2%, showing a weaker labor market than expectations of no change at 6.1%.

Swaps are discounting a 49% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Chip makers and AI-infrastructure stocks moved sharply higher on Wednesday, lifting the overall market.  Western Digital (WDC) closed up more than +10% to lead gainers in the S&P 500 and Nasdaq 100, and Sandisk (SNDK) closed up more than +9%.  Also, Intel (INTC) closed up more than +8%, and Seagate Technology Holdings Plc (STX) and Marvell Technology (MRVL) closed up more than +7%.  In addition, Lam Research (LRCX), Advanced Micro Devices (AMD), KLA Corp (KLAC), Applied Materials (AMAT), and ASML Holding NV (ASML) closed up more than +3%.   

Mining stocks rallied on Wednesday as gold and silver prices surged to 2-week highs.  Anglogold Ashanti (AU) closed up more than +6%, and Newmont Corp (NEM) closed up more than +5%.  Also, Freeport McMoRan (FCX) closed up more than +4%, and Barrick Mining (B) and Southern Copper (SCCO) closed up more than +3%.  In addition, Coeur Mining (CDE) and Hecla Mining (HL) closed up more than +2%.

Airline stocks moved higher on Wednesday as crude oil prices fell by more than -1% amid hopes that an end to the Iran war is near.  United Airlines Holdings (UAL) and American Airlines Group (AAL) closed up more than +3%, and Alaska Air Group (ALK), Delta Air Lines (DAL), and Southwest Airlines (LUV) closed up more than +2%.

Optoelectronic companies are rallying today.  Lumentum Holdings (LITE) closed up more than +8%, and Corning (GLW) closed up more than +4%.  Also, Coherent (COHR) closed up more than +3%, and Applied Optoelectronics (AAOI) and Credo Technology Group Holding Ltd (CRDO) closed up more than +2%. 

Energy producers and energy service providers retreated on Wednesday as WTI crude oil fell by more than -1%.  Exxon Mobil (XOM) closed down more than -5%, and Chevron (CVX) and Occidental Petroleum (OXY) closed down more than -4%.  Also, Diamondback Energy (FANG) closed down more than -3% to lead losers in the Nasdaq 100, and Phillips 66 (PSX) and Devon Energy (DVN) closed down more than -3%.  In addition, APA Corp (APA), ConocoPhillips (COP), Halliburton (HAL), Marathon Petroleum (MPC), and Valero Energy (VLO) closed down more than -2%. 

Target Hospitality (TH) closed up more than +36% after securing a multi-year contract worth over $550 million to construct and provide hospitality services for a data center development in Texas.

nCino (NCNO) closed up more than +10% after forecasting 2027 subscription revenue of $569 million to $573 million, better than the consensus of $568.5 million. 

Boeing (BA) closed up more than +4% to lead gainers in the Dow Jones Industrials after Wells Fargo Securities initiated coverage on the stock with an overweight rating and a price target of $250.

Eli Lilly & Co (LLY) closed up more than +3% after the FDA approved the company’s obesity pill, Foundayo, under the agency’s National Priority Voucher pilot program.

Oric Pharmaceuticals (ORIC) closed down more than 40% after announcing an update on its rinzimetostat program, which JPMorgan Chase said was based on a too-small sample and a short follow-up, making it unreasonable to expect clear efficacy differentiation at this stage. 

RH (RH) closed down more than -19% after forecasting 2027 revenue to be down -2% to -4%, much weaker than the consensus of an +8.1% increase. 

Nike (NKE) closed down more than -15% to lead losers in the S&P 500 and Dow Jones Industrials after forecasting Q4 revenue to be down -2% to -4% and saying its turnaround efforts are taking longer than originally planned. 

Hasbro (HAS) closed down by more than -4% after it said it discovered unauthorized access in its network on Saturday and has taken certain systems offline. 

Earnings Reports(4/2/2026)

Acuity Inc (AYI), AirSculpt Technologies Inc (AIRS), AngioDynamics Inc (ANGO), FS Bancorp Inc (FSBW), Lindsay Corp (LNN).

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