(April 14): Stocks closed at session highs and were back in the green for 2026 after President Donald Trump said Iran still wanted to make a deal following a deadlock in peace talks and a US blockade of the Strait of Hormuz. Meanwhile, Goldman Sachs Group Inc. shares dropped in an underwhelming start to the earnings season.
The S&P 500 rose 1% to its highest level since late February. Brent crude was up 3% at around US$98 a barrel, paring earlier gains. Goldman retreated 1.9% as a revenue miss in fixed-income, currency and commodities outweighed a record haul from equities.
Equities extended their rally after Trump said Iran reached out to his administration over peace negotiations even as the US began a naval blockade of the Strait of Hormuz in the war’s seventh week.
“The oil retracement, in combination with bearish positioning, has fueled the equity rebound,” said JonesTrading chief market strategist Michael O’Rourke. “Overall, investors doubt the veracity of headlines, but they don’t want to be caught on the wrong side of them either.”
Even as Trump sought to jawbone negotiations back on track, there were few signs that was taking place after weekend talks failed in Islamabad. Iran blamed the deadlock on the US and Tehran has not confirmed further discussions on Monday.
“Given the economic costs of higher oil prices and with the immediate turn of events highly uncertain, we think investors should avoid attempts to “trade” geopolitics,” wrote Ulrike Hoffmann-Burchardi, the chief investment officer for Americas and global head of equities at UBS Global Wealth Management.
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At the same time, investors are eager to hear from executives about risks stemming from the war, the disruptive impact of artificial intelligence and worries over private credit as earnings season begins. Analysts project S&P 500 earnings will show roughly 12% annual growth for the first quarter.
The question is whether “this upcoming earnings season can be enough of a catalyst to dismantle the close link between stocks and oil, as corporate earnings are what traditionally drive stock prices,” wrote Clark Bellin, the president and chief investment officer at Bellwether Wealth.
For Morgan Stanley strategist Mike Wilson, a strong earnings backdrop is protecting the S&P 500 from deeper losses, and he recommends that investors stand ready to add risk even if the Iran conflict continues.
See also: US stocks trade flat as investors weigh Hormuz blockade, earnings
The yield on two-year Treasuries slipped to around 3.77%. The dollar reversed an earlier gain and was down 0.2%. Gold traded lower, near US$4,765 an ounce.
The latest spike in crude, coupled with the marked rise in March US consumer prices, is shifting the bond market’s focus back to inflation. Japan’s 10-year yield climbed to the highest level since 1997 earlier on Monday before paring the move. In the US, money markets pointed to less than a one-in-five chance of a rate cut by December.
“Time is playing against markets as each day that goes by with oil prices this high weighs on global growth and pushes inflation,” said Gilles Guibout, the head of European equities at BNP Paribas Asset Management. “It’s difficult to see how markets could stage a sustainable rebound without a sustainable solution to this crisis.”
Uploaded by Isabelle Francis
