Ten Stories Moving the Market

Ten Stories Moving the Market:

Mediators are trying to get the diplomatic process between the U.S. and Iran back on track, including arranging a possible meeting between the two sides as soon as the end of this week – WSJ. (Why you should care – returning to the negotiating table by the end of this week would be ahead of investors’ expectations)

U.S. President Donald Trump said the truce agreed April 7 with Iran would stay in place indefinitely while Washington waits for Iran to submit a new peace proposal; Tehran says it has no plans to take part in negotiations imminently – Bloomberg. (Why you should care – the White House said reports of a three- to five-day extension are incorrect)

The U.S. military has intercepted at least three Iranian-flagged tankers in ‌Asian waters and is redirecting them away from their positions near India, Malaysia, and Sri Lanka; all three were laden with crude oil – Reuters. (Why you should care – U.S. Central Command said it has directed 28 vessels to turn around or return to port since the Strait of Hormuz blockade started)

The U.K. and France will hold a fresh summit of military planners to discuss how the Strait of Hormuz can be kept open, as Prime Minister Keir Starmer and President Emmanuel Macron continue a diplomatic push to restore free transit through the vital shipping route – Bloomberg. (Why you should care – more than 30 countries are seeking a plan to ensure free transit, saying the plan will be defensive in nature)

South ‌Korea's SK Hynix posted a more than five-fold jump in first-quarter operating profit to a record high, as the artificial intelligence boom drove strong demand for both advanced and conventional memory chip products – Reuters. (Why you should care – the results point to solid demand for AI data center chips)

Software for business provider ServiceNow reported results that disappointed investors and said some sales deals have been delayed by the war in the Middle East; subscription revenue of $3.67 billion in the quarter ended March 31 was in-line with Wall Street’s expectation – Bloomberg. (Why you should care – management said the expansion rate would have been 1% higher if not for the lack of deal closure)

Tesla raised its spending plan to more ​than $25 billion for the year as CEO Elon Musk pours money into artificial intelligence, robotics and chips - moves he said were "well justified" to build big future revenue streams – Reuters. (Why you should care – management unexpectedly reported a positive free cash flow number during the first quarter)

IBM posted quarterly sales in its software unit that were in line with estimates, failing to shake investor concerns about AI disruption to its business; the company maintained an earlier forecast for revenue to grow more than 5% this year – Bloomberg. (Why you should care – analysts questioned whether businesses were holding back on software purchases, sending the shares lower)

The war in Iran has lifted U.S. gasoline prices to more than $4 a gallon, but that’s till far lower than the cost in most other developed countries; U.S. taxes make up around 13% of the cost compared to 50%-60% in other countries – WSJ. (Why you should care – the lack of taxes helps to insulate the domestic economy relative to the rest of the world)

The ongoing conflict in the Middle East is solidifying the US dollar’s dominant role in global trade, according to the Society for Worldwide Interbank Financial Telecommunication; the 51.1% portion of international transactions is the highest share since 2023 when the Belgium-headquartered consortium revised how it collects the transaction data – Bloomberg. (Why you should care – this goes against the negative narrative that the dollar is losing its status as the most important global currency)

Economic Calendar:

Earnings – AXP, BX, CMCSA, DLR, GILD, HON, INTC, LMT, NDAQ, SAP

Japan – Au Jibun Bank Japan Manufacturing, Services, Composite PMI (Preliminary) for April

U.K. – Public Sector Net Borrowing (2 a.m.)

Eurozone – HCOB Eurozone Manufacturing, Services, Composite PMI (Preliminary) for April (4 a.m.)

U.K. – S&P Global U.K. Manufacturing, Services, Composite PMI (Preliminary) for April (4:30 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

Treasury Auctions $26 Billion in 5-Year TIPS (1 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)