by Michael P. Reinking, CFA

Published on 4/20/26 (a/o 1:30 pm)

On Friday after reports of the Strait of Hormuz reopening and a barrage of social media posts from President Trump suggesting a deal with Iran was in the works sent oil tumbling and the S&P 500 to its third straight day of record highs. Follow-up reports showed that the Strait may not be as open as hoped for, however, that did little to Curb the Enthusiasm heading into the weekend. The week’s 4.5% gain also made it three straight weeks of 3%+ gains, after five straight weeks of declines, something Larry David would describe as, “Pretty, Pretty, Pretty Good”.

With the ceasefire deadline coming into view again, news flow around the situation remains fluid. Over the weekend the IRGC attacked two ships in the Strait and the US then seized an Iranian-flagged ship that tried to breach the blockade. President Trump also said a second round of talks would take place in Pakistan on Tuesday, while also warning of airstrikes on infrastructure if a deal wasn’t accepted. There still hasn’t been an official confirmation of those talks with mixed messaging coming from Iranian officials. The weekend’s events and the up in the air nature of the next round of negotiations along with President Trump saying a ceasefire extension was “highly unlikely” is weighing on sentiment. That being said given the historic nature of the recent rally, which we documented last week, the resilience in equity markets is impressive. As we head to print the S&P 500 is modestly lower driven primarily by weakness in the mega-cap tech stocks while the equal-weight version of the index and small/mid-cap indices are modestly higher. 

There’s no major US economic data today. Treasury yields are slightly higher out to the 10y while the 30y is flat. The US Dollar Index is back below 98 after testing resistance at its 200d ~98.35 earlier. The UAE has proactively reached out to the US Treasury about an FX swap line in case financial stress increases in the country according to the WSJ. Tariffs are back in the headlines after the administration launched its refund portal. Speaking of…. the US-Mexico-Canada trade treaty (USMCA) is up for a joint review in July. Commerce Secretary Lutnick, who has been relatively quiet over the past couple of months, is getting things warmed up. On Friday he slammed Canada like he was a Team USA fan in the upper deck during the Gold Medal game, saying during a conference that “They Suck”.  

In corporate news, this week will be very busy on the earnings front with ~20% of companies in the S&P expected to report. Investment banks reported last week, talking about the robust pipelines and we got a glimpse of that with a Merger Monday. Building supply distributor QXO announced an acquisition of TopBuild for ~$17B in a cash and stock deal. Eli Lilly continued its recent shopping spree agreeing to buy Kelonia Therapeutics for up to $7B based upon achievement of certain clinical, regulatory and commercial milestones. US Rare Earth also announced its intention to acquire Brazilian mining company Sera Verde Group for ~$2.8B in cash and stock.

Within the S&P 500 the mega-cap tech triumvirate are all in the red. Comm Services is off >1% with Netflix still under pressure after last week’s earnings along with weakness in GOOG/META which is offsetting strength in cable and telecom companies. Similar story in consumer discretionary with the mega-cap components accounting for most of the losses though there is also some weakness in cruise operators, casinos, and apparel. Auto makers are also underperforming as aluminum shortages are becoming more of an issue due to the Middle East disruptions. The news flow in tech remains busy and despite losses at the sector level the action in mixed. A WSJ article spotlighted Salesforce (+>2.5%) founder Marc Benioff’s view of how AI is making the company, and software in general, more formidable, and not the existential threat of the SAAS-pocolypse. Today a couple other software companies announced new AI features (ADBE +1.5%, NOW +2.5%).  Healthcare rounds out the underperformers while most other sectors are +/-< 0.5% hugging the flat line. Commodity related sectors are outperforming with both Energy and Materials up >0.5%. 

Markets in Asia closed mostly higher overnight but keep in mind this was a bit of catchup with both US/European which benefited from the Iran news flow on Friday. In China, both the Hang Seng and Shanghai indexes rose 0.8%. The PBOC left its LPRs unchanged, as expected. A Bloomberg story noted the growing global popularity of China’s AI models and investor enthusiasm for the companies developing them. European equities closed down ~1% trading in a pretty tight range completely within Friday’s range. Germany’s PPI was sharply higher in March. 

Oil prices are bouncing back >5% reversing Friday’s decline. The metals complex is modestly lower but off of the worst levels since futures re-opened. Ag has a bid.  Precious metals and copper are lower though gold is off its worst level. Crypto is lower with Bitcoin down 3% from Friday, having slipped lower after making a run at its 100d ma ~78.8K on Friday. Another defi hack of ~$300m on the Kelp DAO is not helping the complex (Eth down 5%). Negotiations for the CLARITY act were reported to be progressing with hopes that a vote could take place in May.  

Quickly looking ahead to tomorrow it is setting up to be an interesting day. We’ll see what happens with the next round of peace talks. In addition, Kevin Warsh’s confirmation hearings which could make for some interesting television. The ADP weekly jobs report, retail sales and pending home sales round out the economic data. Earnings will also be busy with a mix of impactful reports ranging from financials, industrials, defense, healthcare and housing companies.

Earnings:

After-Market: AGNC, ALK, R, STLD, WTFC, ZION

Pre-Market (Tues): CBSH, DGX, DHI, DHR, EFX, GE, GPC, HAL, MMM, MSCI, NOC, NTRS, RTX, SYF, TSCO, UNH, VMI

After-Market (Tues): ADC, CALX, CB, COF, EQT, EWBC, HWC, IBKR, ISRG, MANH, MCRI, OZK, PEGA, RRC, SON, UAL, WAL, WRB, WRFD

US:

Global: