June S&P 500 E-Mini futures (ESM26) are down -0.42%, and June Nasdaq 100 E-Mini futures (NQM26) are down -0.43% this morning, pointing to a lower open on Wall Street as oil prices surged following a weekend flare-up in U.S.-Iran tensions.

Iran on Saturday closed the Strait of Hormuz once again and opened fire on at least two commercial vessels. Iran’s Parliament Speaker Mohammad Bagher Ghalibaf said that the ongoing U.S. naval blockade is the reason behind the restricted transit through the Hormuz. Meanwhile, the U.S. Central Command said it fired on, boarded, and seized an Iranian-flagged vessel on Sunday while it was heading toward the Iranian port of Bandar Abbas.

U.S. President Donald Trump pledged a quick second round of U.S.-Iran talks in Islamabad this week, while once again threatening to target all power plants and bridges in the country if negotiations collapse. “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran,” Trump said in a social media post on Sunday. Bloomberg reported that Vice President JD Vance, special envoy Steve Witkoff, and the president’s son-in-law Jared Kushner will travel to Islamabad for talks scheduled for Tuesday. Still, Iran’s semi-official Tasnim news agency reported that the Islamic Republic would refuse to attend any talks while the U.S. Navy blockade remains in effect.

The price of WTI crude climbed over +5% on Monday amid renewed tensions in the Middle East. The 10-year T-note yield rose two basis points to 4.27% on concerns that higher oil prices will stoke inflation.

Aside from monitoring Iran-related headlines, investors are awaiting a fresh batch of U.S. economic data as well as a slew of corporate earnings reports this week.

In Friday’s trading session, Wall Street’s major equity averages closed sharply higher, with the S&P 500 and Nasdaq 100 notching new record highs. The Magnificent Seven stocks advanced, with Tesla (TSLA) rising over +3% and Apple (AAPL) gaining more than +2%. Also, travel stocks rallied as oil prices plummeted, with Alaska Air Group (ALK) jumping over +10%, and Royal Caribbean (RCL) surging more than +7% to lead gainers in the S&P 500. In addition, chip and AI-infrastructure stocks gained, with Analog Devices (ADI) and Marvell Technology (MRVL) climbing over +4%. On the bearish side, Netflix (NFLX) sank over -9% and was the top percentage loser on the Nasdaq 100 after the streaming giant provided below-consensus Q2 guidance and announced that chairman and co-founder Reed Hastings will step down from the board once his term ends in June.

“The equity market went from oversold to overbought in no time,” said Michael O’Rourke, chief market strategist at JonesTrading Institutional Services.

Fed Governor Christopher Waller said on Friday that he is cautious about the need to cut interest rates in the near term due to the energy shock sparked by the Middle East conflict, and cautioned about the risk of a prolonged impact on inflation stemming from the conflict. Separately, San Francisco Fed President Mary Daly said that before the Middle East conflict, she had believed one or two rate cuts might be needed this year, but she is now in “wait-and-see” mode as she monitors how long the conflict lasts and oil prices remain elevated.

U.S. rate futures have priced in a 99.5% chance of no rate change and a 0.5% chance of a 25 basis point rate hike at next week’s monetary policy meeting.

First-quarter corporate earnings season heats up this week, with investors looking forward to fresh reports from major companies such as Tesla (TSLA), Lam Research (LRCX), Intel (INTC), Texas Instruments (TXN), International Business Machines (IBM), UnitedHealth Group (UNH), GE Aerospace (GE), RTX Corp. (RTX), Lockheed Martin (LMT), Boeing (BA), AT&T (T), American Express (AXP), Philip Morris International (PM), Procter & Gamble (PG), and Gilead Sciences (GILD). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +12% increase in quarterly earnings for Q1 compared to the previous year, marking the sixth consecutive quarter of double-digit growth.

Market participants will also monitor U.S. economic data this week to gauge how severely the surge in energy prices caused by the Middle East conflict has affected consumer and business sentiment. Preliminary U.S. April purchasing managers’ surveys for manufacturing and services will be the main highlight, with particular focus on whether the twin shocks to growth and inflation seen in PMIs after the first month of the conflict intensified in the second month. U.S. retail sales data for March will also attract attention, offering a glimpse of what spending was like amid the conflict. Other noteworthy data releases include U.S. Initial Jobless Claims, Pending Home Sales, and the University of Michigan’s Consumer Sentiment Index.

U.S. central bankers are in a media blackout period before the April 28-29 policy meeting, so they are prohibited from making public comments on the economic outlook or policy this week. Fed policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Fed blackout periods.

Meanwhile, Kevin Warsh is set to appear before the Senate Banking Committee on Tuesday in what could be the most closely watched confirmation hearing for a Fed chair nominee in decades. ING economist James Knightley said Warsh will likely be questioned on how closely his monetary policy views align with those of President Trump, who has said he favors lower interest rates.

The U.S. economic data slate is empty on Monday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.27%, up +0.45%.

The Euro Stoxx 50 Index is down -1.25% this morning as oil prices jumped following a weekend escalation in U.S.-Iran tensions, dampening optimism that strains in the Middle East were easing. The U.S. seized an Iranian-flagged cargo vessel in the Gulf of Oman, while Tehran reinstated restrictions in the Strait of Hormuz and said it would not participate in a second round of talks as long as the U.S. keeps its naval blockade in place. “Oil prices are being whipsawed by developments in the Middle East once again, with what appears to be de-escalation quickly turning to re-escalation,” ING analysts said. Travel stocks led the declines on Monday. Technology, bank, and automobile stocks also slumped. At the same time, energy stocks climbed as oil prices jumped. Eurozone government bond yields rose on Monday amid concerns that higher oil prices will fuel inflation. Investors this week will closely watch preliminary Eurozone PMI data for April, which will offer new insight into how businesses view the economic outlook for the coming months amid elevated energy prices. The PMI data “will offer a useful measure of how activity is being affected by the crisis in the Middle East,” according to Oxford Economics’ chief European economist Angel Talavera. Market participants will also keep an eye on French business confidence and Germany’s closely watched Ifo business climate index, both due this week. In addition, investors will hear perspectives from European Central Bank officials this week, with President Christine Lagarde among those scheduled to speak before the pre-decision quiet period begins. In corporate news, Loomis (LOOMI.S.DX) slid over -4% after Goldman Sachs downgraded the stock to Neutral from Buy.

Germany’s PPI data was released today.

The German March PPI rose +2.5% m/m and fell -0.2% y/y, stronger than expectations of +1.4% m/m and -0.5% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.76%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.60%.

China’s Shanghai Composite Index closed higher today, hitting a 1-month high as signs of the nation’s economic resilience and new market-friendly policies boosted sentiment. Technology stocks led the gains on Monday. Also, AI-related stocks climbed following reports that Chinese AI startup DeepSeek is in discussions with investors to raise at least $300 million at a $10 billion valuation. In addition, robotics stocks gained after a half-marathon race on Sunday showcased the sector’s rapid technological progress. Reflecting economic resilience, China on Monday kept its key lending rates unchanged for the 11th straight month in April, following better-than-expected economic growth performance at the start of the year. The one-year loan prime rate was kept at 3.00% and the five-year LPR at 3.50%, according to the People’s Bank of China. Meanwhile, China’s securities regulator on Friday expanded the range of strategic investors allowed in companies’ additional share offerings, overhauled fund managers’ incentive systems, and tightened enforcement against illegal share sales by major shareholders. Elsewhere, China will begin this year’s ultra-long special government bond issuance with a record sale of 30-year notes on Friday, a move that will serve as a test of investor demand.

Japan’s Nikkei 225 Stock Index closed higher today as optimism surrounding the red-hot AI sector overshadowed concerns about the Middle East conflict. Technology stocks were among the biggest gainers on Monday. One of the Nikkei’s heavyweights, tech investment firm SoftBank Group, climbed over +5% as the AI trade swung back into investor focus. Healthcare and automobile stocks also advanced. Takayuki Miyajima, senior economist at Sony Financial Group, said, “The trend of major U.S. indices hitting record highs across the board, along with expectations for the AI sector and corporate earnings, is providing support for Japanese stocks.” Meanwhile, Japanese government bonds climbed on Monday as investors assessed how inflationary pressures would influence the timing of Bank of Japan rate hikes. A quarterly BOJ survey released on Monday showed that inflation expectations among households remained broadly steady, with 83.7% of respondents saying they expected prices to be higher a year from now. At the same time, the survey showed that respondents reduced their spending on dining out, clothing, and travel compared with a year earlier, suggesting that rising prices are likely starting to squeeze Japanese households. Mitsubishi UFJ Morgan Stanley Securities has pushed back its forecast for a BOJ rate hike to June from its earlier projection of April. “The BOJ is likely to proceed with caution given the limited amount of hard economic data available since the escalation of tensions in the Middle East,” the brokerage’s analysts said. Investor focus this week is on Japan’s April PMI data, which will offer a timely snapshot of business conditions, as well as the March National Core CPI that will provide early evidence of the pass-through from higher energy prices. The nation’s trade data for March will also draw attention, providing an early indication of external demand. In addition, the BOJ will publish its semiannual Financial System Report. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +15.81% to 32.89.

Pre-Market U.S. Stock Movers

Most members of the Magnificent Seven stocks fell in pre-market trading, with Nvidia (NVDA) and Meta Platforms (META) dropping over -1%.

AST SpaceMobile (ASTS) plunged more than -12% in pre-market trading after Blue Origin’s New Glenn rocket failed to deliver a company-built satellite into its planned orbit.

American Airlines (AAL) slid over -2% in pre-market trading after the carrier said it was not involved in any discussions about a merger with rival United Airlines.

Intel (INTC) slipped more than -1% in pre-market trading after KGI Securities downgraded the stock to Neutral from Outperform.

Marvell Technology (MRVL) climbed about +8% in pre-market trading after The Information reported that Alphabet’s Google was in talks with the company to develop two custom AI chips.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - April 20th

Steel Dynamics (STLD), AGNC Investment (AGNC), Wintrust Financial (WTFC), Zions Bancorporation, National Association (ZION), BOK Financial (BOKF), Cleveland-Cliffs (CLF), Alaska Air Group (ALK), ServisFirst Bancshares (SFBS), Bank of Hawaii (BOH), Park National (PRK), Dynex Capital (DX), NETSTREIT (NTST), Capital City Bank Group (CCBG), SmartFinancial (SMBK), Washington Trust Bancorp (WASH), Home Bancorp (HBCP), Sierra Bancorp (BSRR), Greene County Bancorp (GCBC), RBB Bancorp (RBB), FVCBankcorp (FVCB), Flexsteel Industries (FLXS), Peoples Bancorp of North Carolina (PEBK), MainStreet Bancshares (MNSB).

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