The S&P 500 Index ($SPX) (SPY) on Friday closed +1.20%, the Dow Jones Industrial Average ($DOWI) (DIA) closed +1.79%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed +1.29%. June E-mini S&P futures (ESM26) rose 1.20%, while June E-mini Nasdaq futures (NQM26) rose 1.28%.
Stock indexes were mostly flat on Friday, with the S&P 500 and Nasdaq 100 posting all-time highs and the Dow Jones Industrials posting a 7-week high. Stocks rallied on Friday amid growing speculation that a deal to end the US-Iran conflict is near, fueling risk-on sentiment in stock markets. Crude prices fell more than -11% after Iran announced that the Strait of Hormuz is now “fully open” to shipping, a major step toward ending the war with the US and Israel. Lower crude oil prices eased inflation concerns and lowered the ten-year T-note yield -7 bp to 4.24%. Also, optimism about artificial intelligence and strong earnings added to the stock market’s momentum.
Stocks regained support on Friday after Axios reported that the US and Iran are negotiating a deal to end the war, one of which is that the US will release $20 billion in frozen Iranian assets in order for Iran to supply its stockpile of enriched uranium. Talks between the US and Iran are expected to continue in Pakistan on Sunday or Monday.
President Trump on Thursday said Iran had made important concessions in ongoing talks to end the seven-week war. Mr. Trump said, “They have agreed on almost everything, and they have to come to the table with a pen.” Mr. Trump said he “might” go to Pakistan if a deal with Iran is not reached.” Chances of a formal peace deal rose again when Israel and Lebanon agreed to a 10-day ceasefire on Thursday, and the deal appears to be on hold today.
WTI crude oil prices (CLK26) fell more than -11% on Friday to a 5-week low after Iran said the Strait of Hormuz was open to commercial shipping, potentially paving the way for a deal to end the conflict. President Trump said the US naval blockade in the crisis “will remain in full effect” until a full agreement is reached. On Monday, the US vowed to block all ships passing through the port calling at or bound for Iranian ports. The blockade could exacerbate global oil and gas shortages, as nearly one-fifth of the world’s oil and liquefied natural gas flows through the crisis. Iran has managed to export crude oil during the war, exporting about 1.7 million bpd in March.
Comments on Friday from San Francisco Fed President Mary Daly indicated that she favors keeping Fed policy tight, noting that the oil shock in the US is stronger on the side of inflation than growth, and that leaving policy unchanged will still prevent inflation.
Earnings season got off to a strong start this week, with 81% of the 48 S&P 500 companies reporting Q1 earnings that beat estimates. Q1 S&P 500 earnings are expected to rise +12% year over year, according to Bloomberg Intelligence. Stripping out the tech sector, Q1 earnings are expected to rise around +3%, the weakest figure in two years.
Markets are discounting a 1% chance of a +25 bp FOMC rate hike at the April 28-29 policy meeting.
International stock markets on Friday were steady and mixed. The Euro Stoxx 50 hit a 7-week high and closed up +2.10%. China’s Shanghai Composite fell from a 4-week high and closed down -0.10%. Japan’s Nikkei Stock 225 closed -1.71%.
Interest rates
June 10-year T-notes (ZNM6) closed +16 ticks on Friday. The 10-year T-note yield fell -6.7 bp to 4.244%. June T-notes rose to a 1-month high on Friday, and the 10-year T-note yield fell to a 1-month low of 4.224%. Friday’s -11% drop in WTI crude oil prices to a 5-week low inflation expectations and higher T-note prices. The 10-year inflation rate fell to a 1-week low of 2.346% on Friday.
European government bond yields fell on Friday. Germany’s 10-year bund yield fell to a 1-week low of 2.945% and finished down -7.2 bp to 2.960%. UK 10-year yields fell to a 1-week low of 4.725% and finished down -8.5 bp at 4.762%.
ECB President Christine Lagarde said, “The risks to the outlook for rates are tilted to the upside, especially in the near term, while the medium term results will depend on the intensity and duration of the war.”
A member of the ECB Governing Council, Madis Muller, said the ECB needs to remain “vigilant” about possible inflation risks from the Iran war, but “we don’t have hard evidence of second-round effects, so it’s hard to argue that there is a clear case for raising rates.”
ECB Governing Council member Alexander Demarco said, “Given the high uncertainty at the moment, June is a better time than April” to decide whether the ECB’s interest rate response to the Iran war is necessary.
Swaps are discounting a 9% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.
US Stock Movers
Shares of airlines and cruise line operators rose sharply on Friday as WTI crude prices fell more than 11 percent, lowering fuel costs and boosting company profits. Alaska Air Group (ALK) closed up more than +10%, and Royal Caribbean Cruises Ltd (RCL) closed up more than 7% to lead the gainers in the S&P 500. Also, United Airlines Holdings (UAL) and Carnival (CCL) closed up more than +7%, and Norwegian Cruise Line Holdings (NCLH) closed up more than +5%. In addition, Southwest Airlines (LUV) and American Airlines Group (AAL) closed up more than +4%, while Delta Air Lines (DAL) closed up more than +2%.
Shares of Magnificent Seven technology edged higher on Friday, something that supported the overall market. Tesla (TSLA) closed up +3%, and Apple (AAPL) closed up +2%. Also, Alphabet (GOOGL), Nvidia (NVDA), and Meta Platforms (META) closed up more than +1%. In addition, Microsoft (MSFT) closed +0.60%, and Amazon.com (AMZN) closed +0.34%.
Chipmakers and AI infrastructure stocks edged higher on Friday to provide support to the broader market. Analog Devices (ADI) and Marvell Technology (MRVL) closed up more than +4%, while ASML Holding NV (ASML), Seagate Technology Holdings Plc (STX), and KLA Corp (KLAC) closed up more than +3%. Also, Western Digital (WDC), Microchip Technology (MCHP), ARM Holdings Plc (ARM), Lam Research (LRCX), and Texas Instruments (TXN) closed up more than +2%.
Cryptocurrency exposed stocks moved higher on Friday as Bitcoin (^BTCUSD) rose more than +3% to a 2.5-month high. Strategy (MSTR) closed up more than +11% to lead the gainers on the Nasdaq 100. Also, Riot Platforms (RIOT) closed up more than +7%, and Galaxy Digital Holdings (GLXY) closed up more than +6%. In addition, Coinbase Global (COIN) closed up more than +3%, and MARA Holdings (MARA) closed up more than +1%.
Energy and utilities stocks fell on Friday as WTI crude fell more than 11% to a 5-week low. Valero Energy (VLO) closed up more than -7%, and APA Corp (APA). Occidental Petroleum (OXY) and Marathon Petroleum (MPC) fell more than 5%. Also, ConocoPhillips (COP) and Phillips 66 (PSX) closed up more than -4%, while Diamondback Energy (FANG), Devon Energy (DVN), and Exxon Mobil (XOM) closed up more than -3%. In addition, Halliburton (HAL) closed more than -2%, and Chevron (CVX) closed more than -2% to lead the losers in the Dow Jones Industrials.
Onto Innovation (ONTO) closed up more than +8% after Stifel upgraded the stock to buy from hold with a price target of $350.
Ally Financial (ALLY) closed up more than +7% after reporting Q1 adjusted EPS of $1.11, better than consensus of 93 cents.
Autoliv (ALV) closed up more than +6% after reporting Q1 sales of 2.75 billion, above consensus of 2.61 billion.
Woodward Inc. (WWD) closed up more than +5% after RBC Capital Markets initiated coverage on the stock with an outperform recommendation and a price target of $450.
Netflix (NFLX) closed up more than -9% to lead losers in the Nasdaq 100 after forecasting Q2 revenue of $12.57 billion, below consensus of $12.64 billion.
Albemarle (ALB) closed up more than -8% after Baird downgraded the stock to a neutral from the lead.
Alcoa (AA) closed up more than -7% after reporting Q1 sales of $3.19 billion, weaker than the consensus of $3.27 billion.
Earnings reports (4/20/2026)
AGNC Investment Corp (AGNC), Alaska Air Group Inc (ALK), BOK Financial Corp (BOKF), Cleveland-Cliffs Inc (CLF), Steel Dynamics Inc (STLD), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).
As of the date of publication, Rich Asplund did not have (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
