Wall Street: Still Cautious, Still Buying

Markets have bounced back with striking confidence, brushing aside the Iran war as earnings hold up, inflation looks a little less threatening, and hopes for U.S.-Iran talks calm investors' nerves. Yet that optimism rests on a fragile foundation.

The S&P 500 is edging back toward record territory. The Nasdaq 100 has just logged its 10th straight gain, its longest winning streak since 2021. Losses tied to the Iran conflict have been erased, and the index has clawed its way back into positive territory for 2026.

That recovery reflects a broader shift in mood. Donald Trump said the war was close to being over, and there is growing confidence that Washington and Tehran may resume talks. The market has seized on that possibility: oil prices, while still high, have backed off their panic extremes. WTI has retreated toward $90 a barrel, while Brent remains around $95.

Even so, the facts on the ground remain more complicated. The U.S. military is still enforcing a blockade of Iranian ports, and the Strait of Hormuz remains shut to global oil shipments. Commodity markets continue to price in real stress. The IMF has cut its global growth outlook and warned that a prolonged conflict could push the world close to recession.

Iran has also raised the stakes rhetorically. On Wednesday, Tehran threatened to shut down shipping not only in the Persian Gulf and the Gulf of Oman, but also in the Red Sea, even though Iran does not border it, if the United States keeps its maritime blockade in place. An Iranian commander described the American move as a possible prelude to a ceasefire violation and warned that Iran would not allow exports or imports to move through key regional waterways.

Still, equity investors are behaving as though de-escalation is not just possible but increasingly durable. That helps explain why every dip now looks less like danger and more like a buying opportunity. A strategist at Bank of America offered a good description of the current strange mood: the market is "long and bearish." Investors are buying while still insisting they are cautious.

That mood has been reinforced by earnings. Bank of America and Morgan Stanley both posted stronger first-quarter profits, helped by the kind of market volatility that makes ordinary people tired and trading desks rich. The banks' message has been reassuring: the American consumer still looks healthy, and pipelines for IPOs and dealmaking remain open, provided this conflict does not drag on much longer.

There are macro reasons for that confidence, too. Producer prices in the United States rose less than feared in March, feeding the hope that inflation may cool faster than expected. If energy stops climbing, that hope gets more credible. Federal Reserve officials, including Michael Barr and Michelle Bowman, are due to speak, and the Beige Book will offer another snapshot of how businesses are handling the moment. Treasury Secretary Scott Bessent is already pressing the Fed to cut rates, though even he seems to understand that central bankers are not usually at their most adventurous when tankers, missiles, and oil chokepoints are still in the news.

Today's economic highlights:

On the agenda today: industrial production in the Euro Area; In the United States, the MBA 30-Year Mortgage Rate, export and import prices, the NY Empire State Manufacturing Index, the NAHB Housing Market Index, EIA gasoline and crude oil stocks changes, net long-term TIC flows, along with speeches from Fed's Barr and Bowman; In the United Kingdom, a speech from BoE Governor Bailey; In the Euro Area, a speech from ECB President Lagarde. See the full calendar here.

• Dollar index: 98.227
• Gold: $4,809
• Crude Oil (BRENT): $95.48 (WTI) $91.84
• United States 10 years: 4.27%
• BITCOIN: $69,908

In corporate news:

• M&T Bank reported stronger Q1 adjusted results, with EPS of $4.18 beating expectations and revenue rising year over year to $2.44 billion.
• Citigroup signed a 1.6 billion rand ($98 million) borrowing facility with the World Bank's IFC to support local-currency private-sector financing in South Africa.
• SoftBank Group lenders are seeking additional banks to join a $40 billion loan tied to the company's investment in OpenAI.
• Anthropic has reportedly attracted fresh venture capital interest at valuations as high as $800 billion as it explores a possible IPO later this year.
• Goldman Sachs plans to launch a Bitcoin Premium Income ETF that will invest primarily in bitcoin-linked products and options.
• Google is facing a new antitrust lawsuit from rival app store Aptoide, which alleges the company unfairly dominates Android app distribution and billing.
• Uber plans to invest more than $10 billion in autonomous vehicles and robotaxi developers as it pivots to secure future supply in driverless mobility.
• RTX unit Collins Aerospace won Helix cabin seat orders for nearly 200 aircraft across Boeing 737 and Airbus A320 fleets.
• Ford was urged by China's vice commerce minister to deepen its presence in the Chinese market and expand cooperation with local companies.
• Meta Platforms extended its custom chip partnership with Broadcom through 2029 to support AI infrastructure across its apps, while Broadcom CEO Hock Tan will leave Meta's board for an advisory role.
• Denso formed a strategic partnership with Oracle to modernize its core supply chain systems.
• Amazon agreed to acquire Globalstar for about $11.5 billion to strengthen its satellite ambitions and add direct-to-device connectivity capabilities in its challenge to Starlink.

Analyst Recommendations:

• Alphabet Inc.: Phillip Securities downgrades to accumulate from buy and raises the target price from USD 340 to USD 395.
• Citigroup Inc.: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
• Cloudflare, Inc.: Piper Sandler & Co upgrades to overweight from neutral with a target price of USD 222.
• Lattice Semiconductor Corporation: William O'Neil & Co Incorporated initiates coverage with a buy recommendation. Zacks downgrades to neutral from outperform and reduces the target price from USD 122 to USD 121.
• Molson Coors: Zacks upgrades to neutral from underperform with a price target raised from USD 37 to USD 47.
• Public Service Enterprise Group, Inc.: Jefferies downgrades to hold from buy and reduces the target price from USD 90 to USD 89.
• Apa Corporation: Roth Capital Partners maintains its neutral recommendation and raises the target price from USD 27 to USD 37.
• Eog Resources, Inc.: Roth Capital Partners maintains its neutral recommendation and raises the target price from USD 110 to USD 134.
• Fair Isaac Corporation: Deutsche Bank maintains its buy recommendation and reduces the target price from USD 2148 to USD 1658.
• Freeport-Mcmoran Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 58 to USD 72.
• Humana Inc.: Baird maintains its neutral recommendation and reduces the target price from USD 264 to USD 205.
• Mastec, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 335 to USD 406.
• Moderna, Inc.: Jefferies maintains its hold recommendation and raises the target price from USD 37 to USD 45.
• Murphy Oil Corporation: Roth Capital Partners maintains its neutral recommendation and raises the target price from USD 28 to USD 35.
• Occidental Petroleum Corporation: Roth Capital Partners maintains its neutral recommendation and raises the target price from USD 45 to USD 55.
• Servicenow, Inc.: Citi maintains its buy recommendation and reduces the target price from USD 237 to USD 177.
• Zscaler, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 220 to USD 160.