Tuesday's session opens with that familiar mix of tension and denial. U.S. stock futures are slipping. Oil is still high, hovering around $110 to $111 a barrel. The Middle East war has now dragged into its second month, and Donald Trump's deadline for Iran to reopen the Strait of Hormuz expires tonight. Markets, for now, are not collapsing: but they are wobbling. 

Trump's language is growing more aggressive, more frantic, and frankly more alarming. Reuters reports that he again pressed Iran to strike a deal before his Tuesday deadline, warning that "a whole civilization will die tonight" if no agreement is reached to end the conflict. In a Truth Social post, Trump wrote: "A whole civilization will die tonight, never to be brought back again. I don't want that to happen, but it probably will." He added: "We will find out tonight, one of the most important moments in the long and complex history of the World."

The basic choice in front of investors is brutally simple. Either Washington or Tehran steps back, and markets get a relief rally with lower oil and easier nerves. Or the conflict widens, energy infrastructure gets hit harder, and the cost of everything from freight to groceries gets another shove upward. On one hand, there are reports of possible diplomacy, with Axios saying talks over a 45-day ceasefire were being discussed. On the other hand, Iran reportedly answered with a maximalist ten-point proposal, Reuters reported Kharg Island was struck, and Iranian officials are warning neighboring countries about attacks on U.S.-aligned infrastructure.

Investors are also looking ahead to a packed U.S. data calendar. Durable goods orders arrive today. On Wednesday, the Fed releases minutes from its latest meeting. Thursday brings household income, spending, and PCE inflation. Friday brings March CPI and core inflation. China will publish annual inflation data overnight from Thursday to Friday. Meanwhile, Fed officials including Austan Goolsbee, Philip Jefferson, and Mary Daly are on deck to speak.

The question hanging over all of it is whether high oil prices are starting to seep into broader inflation. Many analysts still think a return to the inflation nightmare of 2022 is unlikely. For now, the Fed looks comfortable waiting. Friday's jobs report gave it room to do that. The U.S. added 178,000 jobs in March, far above expectations for 65,000. The unemployment rate ticked down to 4.3% instead of rising to 4.4%. Those numbers were stronger than expected, though they also look like a partial correction after February's ugly report, which showed 92,000 job losses and was distorted by strikes and weather. That resilience is good news for the economy. It is less obviously good news for investors hoping the Fed might ride in with easy money at the first sign of trouble. 

There are, to be fair, a few signs that the energy situation is not worsening in a straight line. OPEC said Sunday it would raise production quotas by 206,000 barrels a day starting in May. That is not nothing, but it is also not enough to replace the several million barrels per day effectively missing from Gulf producers. Several cargo vessels have managed to pass through the Strait of Hormuz in recent days, and Bloomberg says traffic has reached its highest level since the conflict began. 

There are other moving pieces this week, and they are not minor. Several European finance ministers, including those from Germany, Austria, Spain, Italy, and Portugal, are backing an exceptional tax on oil and gas profits to offset rising prices. Washington's new 100% surtaxes on medicines, meanwhile, will not apply to countries with existing agreements, especially the European Union and Switzerland. In Congress, lawmakers from both parties want tighter restrictions on exports to China of semiconductor-manufacturing equipment. 

Corporate news is thin this week, though that changes next week when earnings season picks up. Premarket, health insurers are jumping after the government raised reimbursement rates for Medicare Advantage plans for 2027 more than expected. Broadcom is also higher after striking a long-term AI chip deal with Google and supplying more computing capacity to Anthropic.

Today's economic highlights:

See the full calendar here.

  • Dollar index: 99.772
  • Gold: $4,660
  • Crude Oil (BRENT): $110.37 (WTI) $114.88
  • United States 10 years: 4.33%
  • BITCOIN: $68,322

In corporate news:

  • UnitedHealth, Humana, CVS Health, Elevance Health, Centene, and Molina Healthcare rose after the US government announced a larger-than-expected increase in 2027 Medicare Advantage payment rates.
  • Anthropic signed a deal with Google and Broadcom for multiple gigawatts of next-generation TPU capacity, with the expansion expected to begin coming online in 2027.
  • Tesla's UK new car sales rose 20% year over year in March to 8,599 units, according to SMMT data.
  • Deere settled its US right-to-repair litigation, agreeing to fund a class settlement pool while continuing to provide repair tools, manuals, and diagnostic software.
  • Huntington Ingalls Industries and GrayMatter Robotics signed an MOU to explore integrating AI-driven autonomous technologies into shipbuilding operations.
  • OpenAI, Google, and Anthropic are reportedly cooperating through the Frontier Model Forum to detect and prevent Chinese AI model imitation and data extraction.
  • JPMorgan Chase received approval to build a 265-meter tower in Canary Wharf that would become the tallest building in the district.
  • GE Vernova Hitachi Nuclear Energy signed an agreement with Afry to support engineering services for deployment of the BWRX-300 small modular reactor in Europe.
  • Pershing Square proposed a cash-and-stock takeover of Universal Music Group valuing the company at about $64.3 billion.
  • Ford is recalling more than 422,000 vehicles in the US because windshield wiper arms may fail and reduce visibility.
  • Vietnam's MoMo is exploring strategic options including new investors in a process that could value the fintech company at more than $2 billion.
  • OpenAI, Anthropic, and Google are reportedly collaborating to try to curb Chinese competitors, according to Bloomberg.
  • Microsoft has committed to investing $10 billion to strengthen its AI and cybersecurity capabilities in Japan.
  • Apple's foldable iPhone is facing technical hurdles, and delivery delays are possible, according to Nikkei Asia.
  • Broadcom and Google have signed an agreement to supply TPUs and network solutions through 2031.
  • Amazon has reached a delivery agreement with the U.S. Postal Service, according to the WSJ.
  • Elbit Systems has secured a $750 million contract to supply rocket launchers to Greece.
  • CrowdStrike is ramping up its $500 million share buyback plan.
  • Neurocrine Biosciences is set to acquire Soleno Therapeutics for $2.9 billion.
  • The restart of Three Mile Island is being held up by delays in power transmission projects, according to Constellation Energy.
  • OpenAI's CFO has expressed doubts about the viability of an IPO in 2026.
  • SpaceX is reportedly in talks with the Saudi sovereign wealth fund PIF for a $5 billion investment during its IPO, according to Reuters.

Analyst Recommendations:

  • Dr Horton: Seaport Global downgrades to neutral from buy.
  • Lennar Corporation: Seaport Global downgrades to sell from buy and reduces the target price from USD 140 to USD 74.
  • Pultegroup, Inc.: Seaport Global downgrades to sell from buy and reduces the target price from USD 155 to USD 100.
  • Alcoa: B Riley Securities Inc. maintains its buy recommendation and raises the target price from USD 78 to USD 96.
  • Booking Holdings Inc.: BTIG maintains its buy recommendation and reduces the target price from USD 6250 to USD 250.
  • Cf Industries Holdings, Inc.: RBC Capital maintains its sector perform recommendation and raises the target price from USD 100 to USD 125.
  • Cognizant Technology Solutions Corporation: Citi maintains its neutral recommendation and reduces the target price from USD 86 to USD 68.
  • Esab Corporation: Baird maintains its outperform recommendation and reduces the target price from USD 161 to USD 128.
  • Ionq, Inc.: Mizuho Securities maintains its outperform recommendation and reduces the target price from USD 80 to USD 61.