Stock Market Update

Equity futures point to a slightly higher opening this morning after the major averages steadily improved from opening losses to post solid gains yesterday. Software stocks saw a notable buy-the-dip bid while mega-caps extended their recent gains, with several cyclical sectors posting solid gains. Notably, the strength saw the S&P 500 erase all the losses it incurred since the start of the Iran war.

Despite the U.S. and Iran walking away from negotiations over the weekend, yesterday's action suggested the market is still optimistic that a deal will be reached soon. Bloomberg reported that the U.S. and Iran are in talks to hold another meeting to discuss a longer-term ceasefire. Recent reports suggest that nuclear policy is a point of division between the two nations, with The New York Times reporting that the U.S. proposed a 20-year suspension of all Iranian nuclear activity, while Iran responded with a proposal to suspend activity for five years.

In addition to developments on the geopolitical front, Q1 earnings are ramping up, with several major banking names reporting earnings this morning.

On the data front, the market will receive the March PPI (Briefing.com consensus 1.2%) and Core PPI (Briefing.com consensus 0.4%) readings at 8:30 a.m. ET. Last week's release of the March CPI saw the headline figure come in hotter-than-expected due to the recent surge in oil prices, while the core reading was slightly cooler-than-expected.

The NFIB Small Business Optimism Index contracted to 95.8 in March (Briefing.com consensus 98.0), from a prior reading of 98.8.

In corporate news:

• Amazon (AMZN 241.64, +1.75, +0.7%) is close to a deal to acquire Globalstar (GSAT 79.44, +6.554, +9.0%), according to Bloomberg.
• Johnson & Johnson (JNJ 235.81, -2.15, -0.9%) beat EPS expectations by $0.02, beat revenue expectations, raised its FY26 guidance, and increased its quarterly dividend by 3.1%.
• JPMorgan Chase (JPM 311.47, -2.21, -0.7%) beat EPS expectations by $0.49 and beat revenue expectations.
• United Airlines (UAL 97.83, +2.63, +2.8%) floated the possibility of a merger with American Airlines (AAL, 12.08, +0.85, +7.6%), according to Bloomberg.
• Wells Fargo (WFC 84.90, -1.74, -2.0%) beat EPS expectations by $0.02 and missed revenue estimates.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a positive showing on Tuesday with South Korea's Kospi (+2.7%) and Japan's Nikkei (+2.4%) reaching levels from early March while markets in India were closed for a holiday. Japan's Nikkei: +2.4%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: +1.0%, India's Sensex: CLOSED, South Korea's Kospi: +2.7%, Australia's ASX All Ordinaries: +0.6%.

In news:

• China reported a much smaller-than-expected trade surplus for March as import growth exceeded estimates by a wide margin while export growth missed expectations. Furthermore, exports in yuan terms decreased.
• The trade surplus with the U.S. narrowed to $16.8 bln, the smallest gap since late 2003.
• The market is no longer expecting the Bank of Japan to announce a rate hike on April 30 with the next hike being forecast for June.

In economic data:

• China's March trade surplus $51.13 bln (expected $107.20 bln; last $213.62 bln). March Imports 27.8% yr/yr (expected 11.1%; last 19.8%) and Exports 2.5% yr/yr (expected 8.3%; last 21.8%)
• Japan's February Industrial Production -2.0% m/m (expected -2.1%; last 4.3%) and Capacity Utilization -0.1% m/m (last 2.9%)
• Singapore's Q1 GDP -1.3% qtr/qtr (expected -0.5%; last 1.3%); 4.6% yr/yr (expected 5.4%; last 5.7%)
• Australia's March NAB Business Survey 6 (last 6) and NAB Business Confidence -29 (last 0). April Westpac Consumer Sentiment -12.5% (last 1.2%)
• New Zealand's February Visitor Arrivals 1.7% m/m (last 1.1%)

Major European indices trade on a higher note while the U.K.'s FTSE (+0.1%) lags amid weakness in energy and consumer names. STOXX Europe 600: +0.6%, Germany's DAX: +1.0%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +0.7%.

In news:

• Luxury goods names are among the laggards in the region after disappointing Q1 results from LVMH.
• The Bank of France expects domestic Q1 GDP growth of 0.3%, according to its monthly economic survey.
• European Central Bank policymaker Rehn said that rate decisions are not locked in ahead of time and that the inflationary impact of the Iran war remains unclear.

In economic data:

• Germany's March WPI 2.7% m/m (expected 0.4%; last 0.6%); 4.1% yr/yr (last 1.2%)
• Spain's March CPI 1.2% m/m (expected 1.0%; last 0.4%); 3.4% yr/yr (expected 3.3%; last 2.3%). March Core CPI 2.9% yr/yr (expected 2.7%; last 2.7%)