Stock Market Update

Equity futures point to a sharply higher open after the U.S. and Iran agreed on a two-week ceasefire to allow further negotiations.

Notably, Iran will allow ships to pass through the Strait of Hormuz during the ceasefire period, which has sent oil prices retreating. WTI Crude oil is currently down $19.64 (-17.4%) to $93.31 per barrel.

Stocks are coming off a choppy, mostly higher finish in yesterday's action, as the two-week ceasefire proposal set forth by Pakistan helped the major averages rise from earlier losses.

It is also worth noting that China intervened shortly before last night's 8:00 p.m. ET deadline to push Iran towards accepting the ceasefire, according to The New York Times.

CNBC reported that Vice President JD Vance has called the agreement a "fragile truce," underscoring the idea that the market will likely remain vulnerable to geopolitical volatility until a more permanent deal is reached. However, in a market that has been driven by oil prices, the sharp retreat in reaction to the ceasefire puts stocks on a sharp upward trajectory.

On the data front, the MBA Mortgage Applications Index for the week ended April 4 decreased 0.8%, from a prior decrease of 10.4%.

In corporate news:

• Apple's (AAPL 259.28, +5.78, +2.3%) foldable iPhone is on track for a September 2026 debut, easing previous concerns of manufacturing issues, according to Bloomberg.
• Delta Air Lines (DAL 73.75, +8.13, +12.4%) beat EPS expectations by $0.06, beat revenue expectations, and guided Q2 EPS below consensus.
• Exxon Mobil (XOM 155.14, -8.77, -5.4%) provided guidance and updates on Middle East operations, with the company now seeing Q4 Non-GAAP earnings of $7.3 billion.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a broadly higher note, encouraged by President Trump delaying the deadline for strikes on Iran's infrastructure due to progress in talks. Japan's Nikkei: +5.4%, Hong Kong's Hang Seng: +3.1%, China's Shanghai Composite: +2.7%, India's Sensex: +4.0%, South Korea's Kospi: +6.9%, Australia's ASX All Ordinaries: +2.7%.

In news: 

• Japan's cash earnings for February grew at their fastest pace since September while real cash earnings increased for the second month in a row.
• Japan's Finance Minister Katayama said that it is still uncertain if an extra budget will be needed.
• The Reserve Bank of India left its policy rate at 5.25%, as expected, while the Reserve Bank of New Zealand left its official cash rate at 2.25%, which was also expected, though RBNZ policymakers discussed a rate hike.

In economic data:

• Japan's February Average Cash Earnings 3.3% yr/yr (expected 2.7%; last 2.5%) and Overall Wage Income 3.3% yr/yr (expected 2.7%; last 2.5%). February Current Account surplus JPY2.71 trln (expected surplus of JPY2.40 trln; last surplus of JPY3.13 trln). March Economy Watchers Current Index 42.2 (expected 48.0; last 48.9)
• South Korea's February Current Account surplus $23.19 bln (last surplus of $13.26 bln)
• Hong Kong's March Manufacturing PMI 49.3 (last 53.3)

Major European indices trade with solid gains alongside a drop in energy prices after President Trump agreed to a two-week ceasefire with Iran. STOXX Europe 600: +4.2%, Germany's DAX: +5.1%, U.K.'s FTSE 100: +3.0%, France's CAC 40: +4.8%, Italy's FTSE MIB: +4.2%, Spain's IBEX 35: +4.3%.

In news:

• Sovereign debt also trades broadly higher with Germany's 10-yr yield falling 15 basis points to a three-week low of 2.93% while Italy's 10-yr yield is down 23 basis points to 3.69%, which also marks a three-week low.
• Germany reported weak Factory Orders growth for February (0.9%; expected 3.0%), making for just a small rebound from a sharp drop in January (-11.1%).

In economic data:

• Eurozone's February Retail Sales -0.2% m/m, as expected (last 0.0%); 1.7% yr/yr (expected 1.6%; last 2.1%). February PPI -0.7% m/m (expected -0.6%: last 0.8%); -3.0% yr/yr, as expected (last -2.0%)
• Germany's February Factory Orders 0.9% m/m (expected 3.0%; last -11.1%)
• U.K.'s March Halifax House Price Index -0.5% m/m (expected 0.2%; last 0.3%); 0.8% yr/yr (expected 1.5%; last 1.2%)
• France's February trade deficit EUR5.8 bln (expected deficit of EUR2.4 bln; last deficit of EUR2.0 bln)
• Swiss March Unemployment Rate 3.0%, as expected (last 3.0%)