The S&P 500 (+0.7%), Nasdaq Composite (+1.2%), and DJIA (+0.5%) saw a meaningful extension of yesterday's rally as the potential for a ceasefire between the U.S. and Iran culminated in another session of broad gains. The DJIA traded above its 200-day moving average (46,698) but failed to close above the key technical level.

Equity futures signaled a higher opening following a Bloomberg report that President Trump told aides that the U.S. will withdraw from the conflict in two to three weeks, even if a deal has not been struck. However, that report was followed by a Truth Social post in which the president threatened continued bombing of Iran's infrastructure if the Strait of Hormuz is not opened.

Today's session progressed in a similar fashion in the sense that it remains unclear exactly where negotiations stand, or how close an off-ramp to the conflict truly is. Reuters reported that Iran denied requesting a ceasefire, while an Israeli report that negotiations are "not progressing in a positive way" saw the major averages give back a considerable chunk of their early gains during the early afternoon hours.

The market now awaits an address from President Trump tonight at 9:00 p.m. ET, in which Politico reported the president will likely announce a victory over Iran and state intentions to wind down military operations, while pressuring NATO allies to help reopen the Strait of Hormuz.

While the Iran situation continues to drive volatility, stocks steadily climbed from their intraday lows to end the session firmly higher. Oil retreated again today, which added support. Crude oil futures settled today's session $1.01 lower (-1.0%) at $100.14 per barrel, and continued to move lower after the session close.

Unsurprisingly, the energy sector (-3.9%) faced a sharp retreat, with all of its components trading lower.

The consumer staples sector (-0.6%) also finished lower as investors rotated into more growth-oriented holdings, while mixed strength in the financials sector saw it chart a flat finish.

Meanwhile, the broader market finished higher as the other S&P 500 sectors covered enough ground to weather the intraday slide. Mega-cap stocks were a point of strength again today, sending the Vanguard Mega Cap Growth ETF 1.2% higher.

That helped the communication services sector (+1.6%) finish near the top of the leaderboard again as Alphabet (GOOG 294.90, +8.04, +2.80%) and Meta Platforms (META 579.23, +7.10, +1.24%) continue to rebound from pronounced weakness after a jury found the companies liable in a social-media addiction case last week.

The information technology sector (+1.1%) was another top-mover, with sustained strength across semiconductor names outweighing weakness across software stocks that saw Microsoft (MSFT 369.37, -0.80, -0.22%) finish as the only "magnificent seven" name that failed to chart a gain.

The PHLX Semiconductor Index finished 2.8% higher, with memory storage names such as Western Digital (WDC 297.73, +27.24, +10.07%) and Micron (MU 367.85, +30.01, +8.88%) among the top-performing S&P 500 components.

Meanwhile, NIKE (NKE 44.63, -8.19, -15.51%) was the index's worst performer after topping earnings estimates, but weak guidance and admission that the company's turnaround efforts are taking longer than expected kept investors from buying the dip. Nike's underperformance did little to weigh down the consumer discretionary sector (+0.9%), which was supported by relatively broad strength and solid mega-cap leadership of its own.

In other corporate news, Eli Lilly (LLY 954.28, +34.51, +3.75%) made a sharp move higher after confirming the FDA approved its new weight-loss drug Foundayo.

Altogether, the stock market started the second quarter on a higher note, especially given the sharp losses that were realized in March. Today's strength was largely driven by geopolitical optimism, though the U.S. and Iran still appear to be far apart on negotiations. Attention now turns to President Trump's address tonight for further clarity on the path forward for U.S. involvement in the conflict and any potential timeline for de-escalation.

As a reminder, tomorrow will be the final session of the week, as the stock market will be closed on Friday for the Good Friday holiday.

U.S. Treasuries endured some volatility to begin April, though the movement unfolded inside a narrow range, leaving the market with slim losses after three days of gains in most tenors. The 2-year note yield finished unchanged at 3.80%, and the 10-year note yield settled up one basis point to 4.32%. 

• S&P Mid Cap 400: +3.0% YTD
• Russell 2000: +1.2% YTD
• DJIA: -3.1% YTD
• S&P 500: -4.0% YTD
• Nasdaq Composite: -6.0% YTD

 Reviewing today's data:

• Weekly MBA Mortgage Applications Index -10.4%; Prior -10.5%
• March ADP Employment Change 62K (Briefing.com consensus 42K); Prior was revised to 66K from 63K
• February Retail Sales 0.6% (Briefing.com consensus 0.5%); Prior was revised to -0.1% from -0.2%, February Retail Sales, ex-auto 0.5% (Briefing.com consensus 0.3%); Prior 0.0%
  • The key takeaway from the report is that it revealed solid spending activity across most kinds of retail businesses. The strength of the report is apt to be diluted, however, by the recognition that it preceded the hefty increase in gasoline prices and the sharp decline in stock prices in March that are expected to keep discretionary spending in check.
• March S&P Global U.S. Manufacturing PMI - Final 52.3; Prior 52.4
• March ISM Manufacturing Index 52.7% (Briefing.com consensus 52.3%); Prior 52.4%
  • The key takeaway from the report is that it conveys an ongoing expansion in manufacturing activity coupled with an ongoing increase in prices for raw materials that works against the notion of the Fed cutting rates soon.
• January Business Inventories -0.1%; Prior was revised to 0.0% from 0.1%