Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.5%), and DJIA (+0.4%) recorded modest gains to start the week, trading in a stable range throughout the day amid a relatively quiet session.

There were no material changes surrounding negotiations between the U.S. and Iran, which kept both oil prices and stocks free from any major swings today. Axios reported that the U.S. and Iran were involved in mediated discussions for a potential 45-day ceasefire, but later reports stated that Iran is not interested in a temporary solution.

In a 1:00 p.m. ET press conference, President Trump reiterated his threat of strikes against Iranian power plants and bridges if a deal is not negotiated before the previously imposed deadline of Tuesday at 8:00 p.m. ET. The press conference was relatively devoid of any new developments, and while the major averages dipped toward their baselines in reaction to the threat of further escalation, they quickly reclaimed their modest gains.

Crude oil futures settled today's session $0.77 higher (+0.7%) at $112.25 per barrel.

Strength across the stock market was broad, though the gains were largely modest in nature.

The consumer discretionary sector (+0.8%) notched the widest gain, supported by gains in nearly all of its components that overshadowed a weak showing from Tesla (TSLA 352.82, -7.77, -2.15%).

The energy sector (+0.8%) captured a similar gain amid the modest increase in oil prices.

Memory storage names saw another day of sharp gains after Morgan Stanley reaffirmed its Overweight rating for Seagate Tech (STX 453.30, +23.94, +5.58%) and Western Digital (WDC 304.15, +9.18, +3.11%), helping the PHLX Semiconductor Index finish 1.1% higher while the broader information technology sector gained 0.5%.

Meanwhile, the utilities (-0.4%), health care (-0.4%), and materials (-0.4%) sectors finished modestly lower.

Outside of the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.5%) posted similar gains to those of the major averages.

Corporate news flow was on the lighter side today, though there was some merger and acquisition activity with Neurocrine Biosciences (NBIX 132.48, +0.88, +0.67%) agreeing to acquire Soleno Therapeutics (SLNO 52.26, +12.77, +32.34%) for $53 per share in cash.

Altogether, some lingering optimism remains that a last-minute ceasefire agreement could still be reached. However, a cautious tone continues to prevail, keeping the S&P 500 and DJIA pinned just below their 200-day moving averages, while the Nasdaq Composite remains further behind.

U.S. Treasuries began the week in mixed fashion with relative strength in longer tenors allowing the long bond to reclaim its loss from Friday's abbreviated session while the short end underperformed, extending Friday's losses. Those losses were incurred in reaction to the Employment Situation report for March, which beat headline expectations by a wide margin, masking some softness on the earnings side. The 2-year note yield settled up two basis points to 3.85%, and the 10-year note yield settled down two basis points to 4.33%.

• S&P Mid Cap 400: +3.6% YTD
• Russell 2000: +2.4% YTD
• DJIA: -2.9% YTD
• S&P 500: -3.4% YTD
• Nasdaq Composite: -5.4% YTD

Reviewing today's data:

• March ISM Non-Manufacturing Index 54.0% (Briefing.com consensus 54.9%); Prior 56.1%
  
  • The key takeaway from the report is that the services sector remained in expansion, but the Employment Index returned to contraction while the Prices Index saw its biggest one-month increase in over 13 years. This combination will present a headwind to growth, especially if it persists in the coming months.