The stock market is on track for a higher opening this morning as a pullback in oil prices, more earnings buzz, and an inclination to buy yesterday's dip combine to create a favorable backdrop for stocks.

On the data front, the March trade deficit widened to $60.3 billion, as expected, from a downwardly revised $57.8 billion (from -$57.3 billion) in February. The widening was the result of exports increasing $6.2 billion more than February exports and imports increasing $8.7 billion more than February imports.

The key takeaway from the report is that it has yet to fully capture the pickup in crude oil exports from the U.S. that has been driven by the Strait of Hormuz blockade. That pickup should be considerably higher in the next report and a boon for Q2 GDP growth forecasts.

The S&P 500 futures currently trade 36 points above fair value.

Equity indices in the Asia-Pacific region had a mixed showing on Tuesday while markets in China, Japan, and South Korea were closed for holidays. Emerging market currencies have faced pressure with India's rupee and Indonesia's rupiah falling to fresh record lows against the dollar with the rupiah pressured by expectations for a Q1 contraction. The Reserve Bank of Australia raised its cash rate by 25 bps to 4.35%, as expected, hinting at a near-term pause in the tightening cycle.

• In economic data:
  • Singapore's March Retail Sales 3.7% m/m (last -4.3%); 4.8% yr/yr (last 8.3%)
  • Hong Kong's Q1 GDP 2.9% qtr/qtr (last 1.0%); 5.9% yr/yr (expected 3.5%; last 3.8%)
  • Australia's April Services PMI 50.7 (expected 50.3; last 46.3) and ANZ Commodity Price Index -0.8% m/m (last 4.2%)

---Equity Markets---

• Japan's Nikkei: CLOSED
• Hong Kong's Hang Seng: -0.8%
• China's Shanghai Composite: CLOSED
• India's Sensex: -0.3%
• South Korea's Kospi: CLOSED
• Australia's ASX All Ordinaries: -0.2%

Major European indices trade in the green while the U.K.'s FTSE (-1.3%) lags with financials and consumer names among the laggards. U.K.'s Gilts also lag with the 10-yr yield up nine basis points to 5.31% while other sovereign debt is little changed. HSBC missed Q1 profit expectations while UniCredit reported record results. Military contractor Rheinmetall missed Q1 revenue expectations. European Central Bank policymaker Nagel said that the ECB should be ready to act any time, echoing comments from other officials.

• In economic data:
  • Spain's April Unemployment Change -62,700 (expected -18,600; last -22,900)
  • Swiss April CPI 0.3% m/m, as expected (last 0.2%); 0.6% yr/yr (last 0.3%)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: +1.2%
• U.K.'s FTSE 100: -1.4%
• France's CAC 40: +0.7%
• Italy's FTSE MIB: +2.0%
• Spain's IBEX 35: +1.1%

The S&P 500 futures currently trade 37 points above fair value.

Trump administration officials reiterated the notion that the U.S.-Iran ceasefire is holding at a Pentagon press conference despite numerous attacks against U.S. forces in the region, with several officials urging Iran to "keep attacks under the threshold."

Just released, the March Trade Balance came in at -$60.3 billion (Briefing.com consensus -$60.3 billion) from a prior revised level of -$57.8 billion (from -$57.3 billion).

Equity futures point to a higher opening this morning after the major averages finished lower to start the week amid an escalation in hostilities between the U.S. and Iran that sent oil prices higher. Further escalation from yesterday afternoon's exchange has not yet been reported, which is resulting in tamer oil prices this morning.

President Trump has so far not declared Iran in violation of the ongoing ceasefire after yesterday's drone attacks, according to The Wall Street Journal. Crude oil is currently down $2.52 (-2.4%) to $103.90 per barrel.

With geopolitics once again on the back burner, the market can turn its attention to a busy week of earnings that will see roughly 120 S&P 500 companies report earnings.

So far, 70% of the index's components have reported their earnings, with the Q1 blended growth rate currently sitting at 27.5%.

In addition to the earnings buzz, the market has a moderate batch of economic data on the slate for this morning, including the March trade balance (Briefing.com consensus: -$60.3 billion), the April ISM Manufacturing Index (Briefing.com consensus: 53.9%), and New Home Sales for March (Briefing.com consensus: 654K).

In corporate news:

• Apple (AAPL 275.71, -1.12, -0.4%) is considering using Intel (INTC 99.34, +3.56, +3.7%) and Samsung (SSNLF) to construct main device chips in the U.S., according to Bloomberg.
• Marathon Petroleum (MPC 254.77, +2.23, +0.9%) beat EPS expectations by $0.91 and beat revenue expectations.
• Pfizer (PFE 26.86, +0.56, +2.1%) beat EPS expectations by $0.03, beat revenue expectations, and reaffirmed its FY26 EPS in-line, with revenues in-line.
• Palantir Technologies (PLTR 141.79, -4.24, -2.9%) beat EPS expectations by $0.05, beat revenue expectations, and guided Q2 and FY26 revenues above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Tuesday while markets in China, Japan, and South Korea were closed for holidays. Japan's Nikkei: CLOSED, Hong Kong's Hang Seng: -0.8%, China's Shanghai Composite: CLOSED, India's Sensex: -0.3%, South Korea's Kospi: CLOSED, Australia's ASX All Ordinaries: -0.2%.

In news:

• Emerging market currencies have faced pressure with India's rupee and Indonesia's rupiah falling to fresh record lows against the dollar with the rupiah pressured by expectations for a Q1 contraction.
• The Reserve Bank of Australia raised its cash rate by 25 bps to 4.35%, as expected, hinting at a near-term pause in the tightening cycle.

In economic data:

• Singapore's March Retail Sales 3.7% m/m (last -4.3%); 4.8% yr/yr (last 8.3%)
• Hong Kong's Q1 GDP 2.9% qtr/qtr (last 1.0%); 5.9% yr/yr (expected 3.5%; last 3.8%)
• Australia's April Services PMI 50.7 (expected 50.3; last 46.3) and ANZ Commodity Price Index -0.8% m/m (last 4.2%)

Major European indices trade in the green while the U.K.'s FTSE (-1.3%) lags with financials and consumer names among the laggards. STOXX Europe 600: +0.5%, Germany's DAX: +1.0%, U.K.'s FTSE 100: -1.3%, France's CAC 40: +0.4%, Italy's FTSE MIB: +1.8%, Spain's IBEX 35: +1.0%.

In news:

• U.K.'s Gilts also lag with the 10-yr yield up nine basis points to 5.31% while other sovereign debt is little changed.
• HSBC missed Q1 profit expectations while UniCredit reported record results.
• Military contractor Rheinmetall missed Q1 revenue expectations.
• European Central Bank policymaker Nagel said that the ECB should be ready to act any time, echoing comments from other officials.

In economic data:

• Spain's April Unemployment Change -62,700 (expected -18,600; last -22,900)
• Swiss April CPI 0.3% m/m, as expected (last 0.2%); 0.6% yr/yr (last 0.3%)

[BRIEFING.COM] The S&P 500 (-0.4%) and Nasdaq Composite (-0.2%) took a modest step back from Friday's record highs as renewed hostilities between the U.S. and Iran prompted a spike in oil prices, weighing on stocks. There was some early enthusiasm across select tech and mega-cap names, which saw the two indices trade higher for most of the morning before mounting pressure forced them lower.

Meanwhile, the DJIA (-1.1%) spent the entire session below its flatline.

Stocks moved lower in broad fashion just before midday in response to headlines that the UAE intercepted a wave of missiles from Iran. More reports of Iranian cruise missile attacks against U.S. military ships in the region followed, with the U.S. Central Command saying they sank several Iranian boats in response. The escalation in hostilities throws an already tenuous ceasefire further into question, weighing on stocks and U.S. Treasuries as oil prices spiked.

Crude oil futures settled today's session $4.44 higher (+4.4%) at $106.28 per barrel. As a result, the energy sector (+0.6%) was the only S&P 500 sector to escape with a gain.

There was, however, some resilience across the top-weighted information technology sector (-0.2%), with its rebound from session lows helping limit losses at the index level. Several prominent chipmaker names, such as Advanced Micro Devices (AMD 341.54, -19.00, -5.27%) and Intel (INTC 95.78, -3.84, -3.85%), moved lower, pressuring the PHLX Semiconductor Index (-0.6%). Meanwhile, memory names, such as Micron (MU 576.45, +34.24, +6.31%) and Sandisk (SNDK 1256.01, +69.01, +5.81%), extended their impressive post-earnings run.

Software names also posted a strong showing, with Oracle (ORCL 180.36, +8.53, +4.96%) surging higher and Palantir Technologies (PLTR 146.03, +1.96, +1.36%) notching a solid gain ahead of its earnings after the close. The iShares GS Software ETF finished 2.1% higher.

The consumer discretionary sector (-0.2%) was another relative outperformer, despite just three of its components finishing higher. Amazon (AMZN 272.07, +3.81, +1.42%) and Tesla's (TSLA 392.56, +1.74, +0.45%) mega-cap leadership nearly offset the broader weakness, with Amazon trading higher after announcing the launch of Amazon Supply Chain Services, which will allow the company to offer the entire shipping process for other businesses, not just its own packages.

The announcement weighed heavily on courier names such as UPS (UPS 96.31, -11.26, -10.47%), C.H. Robinson (CHRW 161.24, -16.06, -9.06%), and FedEx (FDX 357.80, -35.87, -9.11%), which were among the worst-performing S&P 500 components. The industrials sector (-1.2%) lagged as a result.

Elsewhere in the consumer discretionary sector, eBay (EBAY 109.33, +5.26, +5.05%)  moved higher after GameStop (GME 23.84, -2.69, -10.14%) made an unsolicited $56 billion cash and stock bid for the company, while Norwegian Cruise Line (NCLH 17.20, -1.61, -8.56%) moved lower after missing revenue estimates and issuing disappointing guidance.

Tyson Foods (TSN 68.75, +5.07, +7.96%) was a standout after topping earnings estimates, but the stock's gain did little to help broader weakness in the consumer staples (-0.7%) sector.

The materials sector (-1.6%) finished with the widest loss, as the surge in oil prices weighed on construction names such as CRH Plc. (CRH 110.80, -4.65, -4.03%) and Vulcan Materials (VMC 287.72, -9.60, -3.23%).

On a related note, the iShares U.S. Home Construction ETF finished 3.8% lower.

Overall, today's session highlighted that "higher for longer" oil prices stemming from the U.S.-Iran conflict remain a headwind for risk assets in the near term. However, today's pullback was modest in the context of the market's recent strength, with the S&P 500 and Nasdaq Composite still near record highs following a five-week winning streak. Recent sessions have shown a tendency for investors to largely look past geopolitical headlines, with strong earnings growth providing a notable tailwind. That dynamic will be tested again this week, as another busy slate of earnings reports is set to drive market direction.

U.S. Treasuries started the week with a daylong slide that sent yields on 10s and 30s to their highest closing levels since mid-July while yields on shorter tenors settled near their highs from March. The 2-year note yield settled up seven basis points to 3.96%, the 10-year note yield settled up seven basis points to 4.45%, and the 30-year note yield settled up six basis points to 5.03%.

• Russell 2000: +12.7% YTD
• S&P Mid Cap 400: +9.4% YTD
• Nasdaq Composite: +7.9% YTD
• S&P 500: +5.2% YTD
• DJIA: +1.8% YTD

Reviewing today's data:

• March Factory Orders 1.5% (Briefing.com consensus 0.5%); Prior was revised to 0.3% from 0.0%
  • The key takeaway from the report is that factory order activity ramped up in March, driven by widespread strength that was punctuated by a big increase (3.4%) in new orders for nondefense capital goods excluding aircraft.