The end of the Iran conflict appears closer. Trump announced that Iran’s president asked for a ceasefire, but the U.S. wants the Hormuz Strait opened first. is down 2.5% today to below $99/bbl. Crude futures for August are down 3% to under $80/bbl. While things could change quickly if a consensual agreement can’t be reached, the market reflects the strong demand for stocks on the prospects of an end to the oil price shock.
The recovery has been substantial. All industry sectors except energy are in the green for the trailing week, albeit all are still in the red, again except energy, for the trailing month. YTD, we’re looking at now down 4.6%, -3.6%. Worldwide equities are down 2.2% YTD, while World ex-U.S. is up 2.8%. Growth stocks remain down the most, -7.6% YTD, 5.4% of that in the trailing month, while high dividend stocks are up 1.1%. It’s encouraging that the even-weighted S&P is positive for the year at +0.2%.
In economic events, retail sales for February came in strong at +0.6%, core retail (excluding autos) was +0.5%, both above forecasts. Y-o-y retail sales are up 3.7%. While these are pre-Iran numbers, it still reflects a healthy consumer. In manufacturing, we saw modest weakness in employment and new orders, and noticeably higher prices. Home mortgage data was weak as expected due to higher loan rates.
Interest rates are flat today. The at 3.79% is still up over 40bps since the Iran conflict began. The is at 4.30%, up 34bps since before Iran. Bets for a Fed cut remain weak. The is down 0.6% today to 99.1, up a full point since Iran began.
We’re two weeks away from the beginning of the 1Q26 earnings season. If the good news about Iran continues and earnings go well, we should be back into the green for ’26.