NEW YORK, April 14 - U.S. stocks rallied on Tuesday while crude prices slipped as renewed indications that talks between the United States and Iran could continue raised hopes for reduced Middle East tensions. Corporate earnings dominated investor attention alongside inflation-related data that continue to influence views on interest-rate policy.
Before diving into the market action, a reminder: Jamie McGeever will host an LSEG webinar on April 23 with Mike Dolan to discuss safe havens in uncertain times.
Recommended reading to contextualize today’s moves:
- US, Iran could resume negotiations this week despite port blockade
- The IMF has cut its 2026 global growth forecast as Iran war hits prices
- Viktor Orban’s election defeat in Hungary prompts Europe’s far right to rethink its MAGA ties
- US producer prices were cooler than expected, but near-term rate cuts from the Fed remain unlikely
- Wall Street banks are reporting booming first-quarter trade revenues, but express caution over oil prices, geopolitical risks
Market snapshot
- Stocks: Wall Street rallied and European bourses rose to one-month highs on the prospect of Middle East de-escalation.
- Sectors and shares: Eight of the 11 major S&P 500 sectors closed higher, with communication services leading gains. Of the three large U.S. banks that reported quarterly results today, JPMorgan Chase fell 0.8%, Wells Fargo dropped 5.7%, while Citigroup advanced 2.6%.
- FX: The dollar extended losses for a seventh consecutive day amid hopes for a peace deal.
- Bonds: Benchmark U.S. Treasury yields eased on signs of progress in peace talks.
- Commodities and metals: Oil prices retreated as supply concerns softened, while gold rose against the weaker dollar.
Key talking points from policymakers and surveys
Bessent on inflation and rate cuts - U.S. Treasury Secretary Scott Bessent voiced confidence that core inflation - which excludes food and energy - will continue to decline despite the Iran war, and he reiterated his call for the Federal Reserve to lower its key interest rate. That stance contrasts with recent data: two of the three main inflation indicators released so far for March show core inflation ticking higher. The third measure, average hourly wage growth, recorded a cooler reading than the prior month.
Goolsbee signals caution on timing of cuts - Chicago Federal Reserve President Austan Goolsbee said rate reductions might need to be delayed until 2027 if fallout from the Iran conflict stalls the gradual decline of inflation toward the Fed’s 2% average annual target. At the Fed’s most recent meeting, policymakers kept the target range for the federal funds rate at 3.50%-3.75%, though a majority had signaled that at least one cut could be appropriate this year.
Small business sentiment softens - The National Federation of Independent Business reported that U.S. small business sentiment fell to an 11-month low in March, as rising oil prices undermined the benefits firms had felt from lower taxes. The NFIB index dropped below its 52-year average, while the index’s uncertainty component jumped four points to 92, well above its historical average of 68. The share of respondents expecting improved business conditions fell to the most pessimistic level since October 2024.
Events and data that could move markets next
Market participants flagged a range of upcoming items that could influence trading, including:
- Developments in the Middle East
- Energy market moves
- Social media posts from Trump
- Earnings from Bank of America and Morgan Stanley, and results from Dow Transports component J.B. Hunt
- China: industrial output and retail sales for March, and first-quarter GDP
- France: CPI for March
- Euro zone: industrial production for February
- India: unemployment rate for March
- Brazil: retail sales for February
- Canada: manufacturing sales for February
- Australia: employment for March
- Speeches from U.S. Federal Reserve officials including Fed Board Governor Michael Barr and Fed Vice Chair Michelle Bowman
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Note: Opinions expressed in this piece are those of the author.