On April 14, 2023, the S&P 500 Index rose by 0.77%, reaching a 1.5-month high, while the Dow Jones Industrial Average increased by 0.59% to a 5-week high, and the Nasdaq 100 climbed by 0.98% to a 2.25-month high. This market rally was fueled by optimism surrounding potential negotiations to extend a ceasefire between the US and Iran, which has led to over a 5% drop in crude oil prices.
Concurrently, the US military initiated a blockade of the Strait of Hormuz, following threats from President Trump regarding Iranian activity. Approximately 1.7 million barrels per day of crude oil were exported by Iran in March, and about 20% of the world’s oil transits through this strategic route. The March Producer Price Index (PPI) indicated a modest increase of 0.5% month-over-month and 4.0% year-over-year, falling short of expectations and contributing to a positive sentiment in the stock market.
Next week, the Senate Banking Committee will review Kevin Warsh’s nomination as the new Federal Reserve Chair, amid hopes that the Trump administration will halt its investigation into current Fed Chair Powell, potentially enabling a smoother confirmation process. The upcoming earnings season anticipates a 12% year-over-year increase in Q1 S&P 500 earnings, with expectations running higher for large money center banks reporting their figures.
