Is This Really a Win?

This morning's rally is easy enough to explain: a two-week cease-fire between the United States and Iran, along with a pledge to reopen the Strait of Hormuz, has given investors a reason to believe the worst-case scenario may be off the table, at least for now. Stock-index futures are sharply higher, oil is falling fast, Treasury yields eased and the dollar is weaker. The VIX, Wall Street's favorite fear gauge, has dropped. Airlines, cruise operators, and other travel stocks are jumping, while energy stocks are sliding. What investors are cheering is not peace, but the possibility that the world may avoid another self-inflicted economic shock.

Yesterday was the day the White House changed direction. After threatening catastrophic escalation, President Trump agreed to a two-week cease-fire framework with Iran and tied it to the reopening of the Strait of Hormuz. He said U.S. military objectives had already been achieved and that talks on long-term peace were advancing. He added that Washington would discuss tariff and sanctions relief with Tehran. He also warned that any country supplying Iran with military weapons would face immediate 50% tariffs on exports to the United States. That is a lot to stuff into one foreign-policy turn, even by modern standards. The administration says there will be no uranium enrichment and that many elements of its proposed plan have already been accepted. Trump even said in a social media post that the US will work with Iran to "dig up and remove" the country's nuclear material.

For weeks, the great fear was that conflict in the Middle East would keep driving oil higher, push inflation back up, and make the Federal Reserve's life even harder. Now that oil has dropped sharply, investors are beginning to unwind that fear. 

Not to be a buzzkill, but this optimism may be getting ahead of itself. Iran has put forward a 10-point peace plan published by Nour News, an Iranian outlet close to Iran's Supreme National Security Council, and the terms do not appear especially favorable to the US. It includes the continuation of Iran's control over the Strait of Hormuz., acceptance that Iran can enrich uranium for its nuclear program, the removal of all primary sanctions on Iran, the end of all International Atomic Energy Agency resolutions on Iran's nuclear program, as well as compensation payment to Iran for war damage. Taken together, those terms would still leave Iran with several important gains it did not have before the war, which is why this would hardly count as a win for Trump.

Deutsche Bank noted that investors are understandably relieved to see an off-ramp emerging, but also warned that the real test is whether this leads to lasting de-escalation. Hargreaves Lansdown put it even more plainly. If traffic through the strait is not fully restored, and restored without new Iranian interference, oil prices are unlikely to settle down for long. That is the question hanging over the coming week. Is this the start of a real cooling-off period, or just a temporary pause with good branding?

For now, markets are choosing optimism. Brent crude has fallen hard, after briefly surging above $110 a barrel during the crisis. Some analysts think oil could end the year near $80 if a broader U.S.-Israel-Iran deal actually holds. Small caps are up, tech is rebounding, and cyclical sectors are coming back to life. At the same time, gold is also climbing, which tells you that not everyone is fully convinced.

In  company news, Shell says the Middle East conflict hurt natural-gas production, in part because of lost Qatari volumes, though strong oil trading should help offset some of the damage. Its stock is still falling because right now the market cares more about lower oil prices than about trading gains. Blue Owl was downgraded by Moody's after investors asked to withdraw a large amount of money, but the stock still rose in premarket trading because broad risk appetite is lifting almost everything outside energy. Levi Strauss had a more straightforward reason to rally: its turnaround appears to be working, and it raised guidance. Earnings from Delta, RPM International, and Constellation Brands should offer more clues about whether corporate America sees this as a genuine reset or just a temporary breather. Meanwhile, investors will be parsing minutes from the Fed's March meeting, along with comments from Mary Daly and Christopher Waller. 

Today's economic highlights:

See the full calendar here.

• Dollar index: 98.612
• Gold: $4,797
• Crude Oil (BRENT): $94.49 (WTI) $95.35
• United States 10 years: 4.23%
• BITCOIN: $71,843

In corporate news:

• Accenture acquired Spanish cloud-native AI and data specialist Keepler Data Tech for an undisclosed amount, adding more than 240 employees to its team.
• Airline and cruise stocks including United Airlines, Southwest Airlines, Delta Air Lines, American Airlines, Ryanair, Carnival, Norwegian Cruise Line, and Royal Caribbean rose in premarket trading after the US and Iran agreed to a two-week ceasefire.
• SpaceX is reportedly targeting a $1.75 trillion IPO valuation, with investors betting heavily on the strength of Starlink and future upside from businesses such as Starship and xAI despite very stretched valuation multiples.
• Coinbase received an Australian financial services license from ASIC, allowing it to launch crypto and equity perpetuals in the country before later expanding into futures and options.
• General Motors is recalling about 271,770 US vehicles, including certain 2023-2025 Chevrolet Malibu models, because a rearview camera defect can display a distorted or blank image.
• Ford Motor and other US automakers are facing higher costs from aluminum tariffs and supply disruptions after a fire at a key Novelis plant, according to the Wall Street Journal.
• CME Group said its international average daily volume rose 30% year over year in the first quarter, helping lift global average daily volume by 22%.
• SIX Group partnered with Snowflake to let joint clients access and analyze SIX regulatory and reference data directly through Snowflake's cloud platform.
• Japan's Economy Watchers survey showed frontline service-sector sentiment deteriorated sharply in March as the Middle East war and higher oil prices weighed on confidence.
• US carmakers including Ford, General Motors, and Stellantis have accused the EU of effectively blocking oversized pickup trucks such as the Ford F-150, Chevrolet Silverado, and Ram 1500 from European roads, according to the Financial Times.
• Subsea 7 is partnering with Petronas on field development projects in Suriname.
• Intel is partnering with SpaceX and Tesla to operate a new computer chip factory.
• Apple's foldable iPhone remains on track for a September launch, according to Bloomberg, despite rumors to the contrary.
• AppLovin announces a succession plan for its executive leadership and appoints a new independent chairman.
• General Dynamics secures a $450 million contract with the U.S. Marine Corps.
• Insmed abandons development of its dermatological treatment following the failure of an interim study.

Analyst Recommendations:

• Deere & Company: Jefferies upgrades to hold from underperform with a target price of USD 550.
• Diamondback Energy, Inc.: Roth Capital Partners downgrades to neutral from buy and raises the target price from USD 180 to USD 200.
• Lazard: Keefe Bruyette & Woods downgrades to market perform from outperform and reduces the target price from USD 62 to USD 47.
• Lpl Financial Holdings Inc.: UBS upgrades to buy from neutral but reduces the target price from USD 406 to USD 380.
• Matador Resources Company: Roth Capital Partners downgrades to neutral from buy and raises the target price from USD 52 to USD 65.
• Permian Resources Corporation: Roth Capital Partners downgrades to neutral from buy and raises the target price from USD 20 to USD 22.
• Pjt Partners Inc.: Keefe Bruyette & Woods upgrades to outperform from market perform and reduces the target price from USD 180 to USD 166.
• Verizon Communications, Inc.: DBS Bank downgrades to hold from buy with a target price of USD 52.
• Apollo Global Management A: Jefferies maintains its hold recommendation and reduces the target price from USD 145 to USD 115.
• Cf Industries Holdings, Inc.: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 95 to USD 135.
• Chord Energy Corporation: Wells Fargo maintains its overweight recommendation and raises the target price from USD 136 to USD 175.
• Devon Energy Corporation: RBC Capital maintains its sector perform rating and raises the target price from USD 46 to USD 59.
• Eog Resources, Inc.: Wells Fargo maintains its overweight recommendation and raises the target price from USD 155 to USD 199.
• Fifth Third Bancorp: 22V Research LLC maintains its sector outperform recommendation and raises the target price from USD 45 to USD 55.
• Fortune Brands Innovations, Inc.: Barclays maintains its equalweight recommendation and reduces the target price from USD 55 to USD 43.
• Hamilton Lane Incorporated: Keefe Bruyette & Woods maintains its outperform rating and reduces the target price from USD 170 to USD 120.
• Lazard: Keefe Bruyette & Woods downgrades to market perform from outperform and reduces the target price from USD 62 to USD 47.
• Lumentum Holdings Inc.: Mizuho Securities maintains its outperform rating and raises the target price from USD 750 to USD 930.
• Robinhood Markets, Inc.: Barclays maintains its overweight recommendation and reduces the target price from USD 124 to USD 89.
• Servicenow, Inc.: President Capital Management Corp maintains its buy recommendation and reduces the target price from USD 1190 to USD 200.
• Valero Energy Corporation: Barclays maintains its overweight recommendation and raises the target price from USD 184 to USD 261.