Author: Timothy St. John

On Monday, U.S. stock futures climbed marginally higher after ending a 5-week losing streak on Thursday thanks to reports that a ceasefire may be in the works between Iran and the United States.

The Dow Jones Industrial Average was the only one of the three leading U.S. stock indices to fall on Monday, losing 0.1%. The Nasdaq added 0.3%, and the S&P 500 gained 0.1%. These mild changes are coming off of a strong performance at the end of last week when all three indices snapped a losing streak that had extended for five weeks.

Iran and the United States are discussing a ceasefire, and the deadline has been set for Tuesday this week. The terms of the ceasefire would ensure a 45-day break from fighting so that plans can be made to end the conflict permanently. The terms also allow for the reopening of the Strait of Hormuz- an event much anticipated by the stock market, which has been drastically impacted by  destroyed and restricted shipments through there.

Stocks Jump but Could Reverse on Trump Speech

President Donald Trump is scheduled to give a speech today at 1pm on the military situation in Iran, and if he reveals news that the ceasefire is not going as planned, then the stock market is likely to reverse course. The indices are still high from last week’s wins, where the Dow added 3% and the Nasdaq gained 4.4%. Those gains came after days of volatile movements in both directions.

Investors should note that the stock market is still incredibly volatile and prone to quick decreases at any bad news coming out about the Iran conflict. Protracted conflict can hurt the U.S. economy, especially in relation to the global foothold the country has on the price of goods when compared to China. The Asian superpower stands to benefit from the United States’ involvement in Iran as economic pressure is placed on the price of foodstuffs and other items.

Trump has already warned that if Iran does not meet the requirements for opening the Strait of Hormuz by Tuesday, then the United States will attack bridges and power plants. That could drastically extend the fighting and increase oil prices further. The price of crude oil fell about 1% Monday but is still elevated.

The other big news Monday besides the Iran conflict is the March jobs report. That released Friday, but with the shortened holiday week, the market will only now be able to react to the news. That report showed that unemployment stood at 4.3% and payrolls increased by nearly 180,000 for the month.

All three major U.S. stock indices looked bullish Wednesday morning after they rallied on Tuesday. Yesterday marked the best day in over a year for the stock market.

March ended with a bang for U.S. stock futures, as the Nasdaq Composite jumped nearly 4%. That index and others remained positive as premarket trading began for Wednesday. The quarter and the month ended with losses across much of the market but with a strong upswing at the end spurred by changing conditions in the war in Iran.

President Donald Trump may be looking to resolve the conflict in the Middle East quickly according to reports this week, and he may not wait for the Strait of Hormuz to open for that to happen. The news gave the stock market a much needed boost, causing the Dow and other leading indices to climb sharply.

Bullish Market to Start off April

On Wednesday morning, the market was still holding onto its gains as the Nasdaq added 1.08% and the Dow jumped 0.69%. The S&P 500 index looked bullish as well with an increase of 0.72%. These numbers tell us that  the market has some upward momentum and that Tuesday’s jump was not just a fluke to be followed by a quick reversal.  

News continued to pour out about the Middle East conflict, with one unconfirmed report stating that Iran’s president was looking to end the war soon as well. Sharp losses for March will plague the market for now, and the indices have a lot of ground to make back to recover from March’s decline.

Microsoft (MSFT) is one of several technology stocks that performed well early this week and made up for losses from the past few days. The tech niche has suffered tremendously throughout the last few months, and Microsoft has weathered storms of scrutiny over their spending even with a strong quarterly performance. Now at $370 per share, the MSFT stock is making upward progress but still has a long way to go to recover from months of decline.

Walmart (WMT) is holding a steady line, neither severely up nor down through the latest developments in the stock market. This is one of the rare notable stocks that has actually improved since January, climbing from $112 per share at the start of the year to its current price of $123. WMT is considered one of the more reliable stocks that tends to perform consistently during stock market upheavals.

One of the biggest stock drops this week came from Nike (NKE), which saw a decline of nearly 14%. The company released their quarterly earnings report this week and beat Wall Street projections for sales. However, they offered a disappointing forecast for the remainder of the year, causing their stock to plummet.

We will likely continue to see wild swings up and down across the stock market this week as investors process new Iran conflict reports. Many of the stocks that struggled last week, however, are showing signs of strong bullish momentum this week.