[BRIEFING.COM] The major averages are off their session lows following a report from The New York Times that an Iranian delegation is slated to head to Islamabad for the next round of talks with the U.S., which is contingent on participation from Vice President JD Vance.

Cleveland-Cliffs (CLF 9.72, -0.22, -2.21%) is trading lower despite delivering a modest EPS beat and a solid revenue upside in Q1, as investor focus shifts to rising energy costs, particularly crude-linked inputs, which are emerging as a key earnings headwind. Management highlighted that extreme cold weather and a spike in energy prices created an $80 million drag on EBITDA in the quarter, overshadowing otherwise improving fundamentals. While results marked the start of a "sustained improvement progression" through 2026, the market appears more focused on cost inflation risks tied to fuel, freight, and broader energy inputs.

Q1 steel shipments reached 4.1 million net tons, with average selling prices rising to $1,048/ton, up approximately $55 sequentially, reinforcing improving price realization despite extended contract lags. Against this backdrop, peers such as Nucor (NUE 202.71, +6.84, +3.49%) and Steel Dynamics (STLD 211.18, +10.86, +5.42%) are outperforming, reflecting relative strength in their lower-cost, scrap-based electric arc furnace models, which are viewed as more insulated from energy-driven margin pressure.

The materials sector (+0.7%) is one of the best-performing S&P 500 sectors as a result.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.6%), and DJIA (-0.2%) are moving lower this morning as geopolitical volatility takes center stage after last week's rally. The Russell 2000 (+0.1%) and S&P Mid Cap 400 (+0.3%) are modestly higher.

There are some lingering concerns after an escalation in tensions between the U.S. and Iran over the weekend. The U.S. seized an Iranian-flagged cargo ship, and President Trump threatened another wave of bombing strikes if a deal is not achieved. The major averages moved further below their baselines after President Trump told Bloomberg that it is "highly unlikely" he will extend the current ceasefire if a deal is not reached this week.

As for the stocks themselves, action is mixed at the sector level. Momentum across mega-cap and tech names has at least momentarily stalled after last week's rally, with the consumer discretionary (-1.2%), communication services (-1.2%), and information technology (-0.6%) sectors among the worst performers. Cruise lines, airlines, and other oil-sensitive pockets of the market are also underperforming.

However, the broader market is showing resilience, with the S&P 500 Equal Weighted Index (-0.2%) modestly higher, suggesting that investors remain confident a more durable ceasefire agreement will eventually be reached. 

[BRIEFING.COM] The major averages continue to drift lower this morning.

The consumer discretionary sector (-1.4%) faces the widest loss this morning, with Norwegian Cruise Line (NCLH 19.86, -1.12, -5.36%) and other cruise lines among the worst-performing S&P 500 components as crude oil moves higher today.

Additionally, Tesla (TSLA 390.26, -10.36, -2.59%) is a mega-cap laggard ahead of its earnings release Wednesday after the close.

[BRIEFING.COM] The S&P 500 (-0.1%), Nasdaq Composite (-0.3%), and DJIA (flat) are trading in a relatively tight range this morning.

Marvell (MRVL 145.43, +5.74, +4.11%) and Alphabet (GOOG 337.50, -1.90, -0.56%) are in focus following a report from The Information that the two companies are partnering to develop two new tensor processing units (TPUs) aimed at competing with NVIDIA's (NVDA 199.34, -2.34, -1.16%) dominant AI GPUs, with plans to finalize the chip designs by next year.

The initiative underscores Alphabet's push toward vertical integration in AI infrastructure, leveraging Marvell's custom silicon expertise to design workload-specific accelerators. This effort reflects a strategic pivot to reduce dependence on NVIDIA while optimizing performance per watt and total cost of ownership at hyperscale.

Alphabet is one of the better-performing "magnificent seven" names this morning, as Apple (AAPL 274.09, +3.86, +1.43%) is the only stock in the group that trades higher.

[BRIEFING.COM] The S&P 500 (-0.1%), Nasdaq Composite (-0.2%), and DJIA (flat) are mostly lower shortly after the open, though the losses are modest in comparison to recent gains.

After a rally to fresh record highs last week and an uptick in geopolitical uncertainty over the weekend, mega-cap and tech stocks, which paced the recent gains, have taken a step back this morning. The communication services (-0.7%) and consumer discretionary (-0.8%) sectors are the early laggards, and the Vanguard Mega Cap Growth ETF is down 0.2%.

However, the top-weighted information technology sector (+0.1%) has reclaimed its flatline amid another strong start across software names.

The health care sector (-0.4%) is also lower as its largest component, Eli Lilly (LLY 922.99, -4.04, -0.44%) takes a step back after headlines that the company will acquire Kelonia Therapeutics for up to $7.0 billion in cash.

Meanwhile, the rest of the market trades modestly higher, with broad strength in the financials sector (+0.5%) and the energy sector (+0.7%) moving higher amid a bounce in oil prices.

The stock market is on track for a lower opening this week as investors await updates on the state of negotiations between the U.S. and Iran.

Even without this weekend's escalation in geopolitical tensions, a pullback wouldn't be surprising given the major averages' rapid move from near-correction levels to fresh record highs in just three weeks.

In corporate news, Eli Lilly (LLY 925.99, -1.04, -0.1%) is set to acquire Kelonia Therapeutics, and Kelonia shareholders will receive up to $7.00 billion in cash, inclusive of an upfront payment of $3.25 billion, and subsequent payments upon achievement of certain clinical, regulatory, and commercial milestones.

The S&P 500 futures currently trade 25 points below fair value.

Equity indices in the Asia-Pacific region began the week on a higher note even though the conflict with Iran escalated over the weekend, as Iran's navy continued restricting traffic through the Strait of Hormuz over the weekend. A U.S. delegation was expected to meet with Iranian officials in Pakistan today, but Iran has not committed to another round of negotiations yet. Tokyo Steel announced that its price hikes will continue into May while other Japanese companies are also expected to increase prices. The approval rating of Prime Minister Takaichi's cabinet fell to 66% from 71%. The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%.

• In economic data:
  • Japan's February Tertiary Industry Activity Index -0.7 (last -8.7)
  • New Zealand's March trade surplus NZD698 mln (expected surplus of NZD175 mln; last deficit of NZD365 mln)

---Equity Markets---

• Japan's Nikkei: +0.6%
• Hong Kong's Hang Seng: +0.8%
• China's Shanghai Composite: +0.8%
• India's Sensex: UNCH
• South Korea's Kospi: +0.4%
• Australia's ASX All Ordinaries: +0.1%

Major European indices trade in the red, weighed down by news that maritime traffic is still not flowing through the Strait of Hormuz. European Central Bank policymaker Demarco said that the central bank should wait a bit longer before raising rates, adding that bets on two rate hikes are not unreasonable. Moody's lowered Belgium's rating to A1 from Aa3, revising the outlook to Stable from Negative while DBRS reaffirmed Italy's A rating with a Stable trend.

• In economic data:
  • Eurozone's February Construction Output -1.9% m/m (last -1.33%)
  • Germany's March PPI 2.5% m/m (expected 1.4%; last -0.5%); -0.2% yr/yr (last -3.3%)

---Equity Markets---

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

The S&P 500 futures currently trade 32 points below fair value.

Futures have seen a modest bump off their lows following a few optimistic developments pertaining to the U.S.-Iran negotiations.

The Associated Press reported that Pakistani officials said Iranian authorities are still willing to attend the second round of peace negotiations in Islamabad this week. Additionally, Chinese President Xi Jinping urged that the Strait of Hormuz be reopened during a call with Saudi Crown Prince Mohammed bin Salman.

Equity futures point to a lower opening this morning after an escalation in geopolitical tensions between the U.S. and Iran over the weekend. The major averages are coming off their third consecutive week of gains of 3% or wider across the board, with the S&P 500 and Nasdaq Composite notching fresh record highs and the Nasdaq Composite recording 13 straight winning sessions.

Stocks are poised to take a step back at the open after Iran has put a pause on the next round of peace talks that were set to take place before the ceasefire expires on Wednesday. NBC News reported Iran has vowed retaliation after the U.S. seized an Iranian cargo ship, with President Trump issuing renewed threats against the country's energy infrastructure.

Crude oil is currently up $4.93 (+6.0%) to $87.52 per barrel.

Still, the broader undertone remains constructive for stocks as recent decreases to the price of oil have improved the market's rate cut odds, while mega-cap and tech stocks have continued to provide steady leadership alongside signs of improving market breadth. That said, today's pullback looks more like a pause following an extended rally rather than the start of a deeper reversal, as investors weigh elevated geopolitical risks against a still-supportive macro backdrop.

On the earnings front, a slate of regional banks will report today before earnings ramp up considerably tomorrow.

There is no economic data of note scheduled for today to kick off a week of relatively few data releases.

In corporate news:

• American Airlines (AAL 12.36, -0.42, -3.3%) is down in the premarket after the company rejected merger talks with United Airlines (UAL 99.11, -2.69, -2.6%), according to CNBC.
• Alphabet (GOOG 336.52, -2.88, -0.9%) is in discussions with Marvell (MRVL 147.82 +8.31, +5.8%) to construct new artificial intelligence chips, according to The Information.
• Meta Platforms (META 682.47, -6.08, -0.9%) plans to reduce its workforce by roughly 8,000, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a higher note even though the conflict with Iran escalated over the weekend, as Iran's navy continued restricting traffic through the Strait of Hormuz over the weekend. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: +0.8%, India's Sensex: UNCH, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +0.1%.

In news:

• A U.S. delegation was expected to meet with Iranian officials in Pakistan today, but Iran has not committed to another round of negotiations yet.
• Tokyo Steel announced that its price hikes will continue into May while other Japanese companies are also expected to increase prices.
• The approval rating of Prime Minister Takaichi's cabinet fell to 66% from 71%.
• The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%.

In economic data:

• Japan's February Tertiary Industry Activity Index -0.7 (last -8.7)
• New Zealand's March trade surplus NZD698 mln (expected surplus of NZD175 mln; last deficit of NZD365 mln)

Major European indices trade in the red, weighed down by news that maritime traffic is still not flowing through the Strait of Hormuz. STOXX Europe 600: -1.1%, Germany's DAX: -1.3%, U.K.'s FTSE 100: -0.7%, France's CAC 40: -1.1%, Italy's FTSE MIB: -1.4%, Spain's IBEX 35: -1.3%.

In news:

• European Central Bank policymaker Demarco said that the central bank should wait a bit longer before raising rates, adding that bets on two rate hikes are not unreasonable.
• Moody's lowered Belgium's rating to A1 from Aa3, revising the outlook to Stable from Negative while DBRS reaffirmed Italy's A rating with a Stable trend.

In economic data:

• Eurozone's February Construction Output -1.9% m/m (last -1.33%)
• Germany's March PPI 2.5% m/m (expected 1.4%; last -0.5%); -0.2% yr/yr (last -3.3%)

[BRIEFING.COM] The stock market capped an impressive week with a strong rally as retreating oil prices, improved rate-cut odds, and broadening participation pushed stocks further into record territory. The S&P 500 (+1.2%) and Nasdaq Composite (+1.5%) notched record intraday and closing highs for the third consecutive session, with the Nasdaq Composite locking in a 13th consecutive higher finish, a feat not accomplished since 1992.

Solid participation across the broader market helped the DJIA (+1.8%) slightly outperform, while expectations for a potentially more favorable interest rate environment saw the Russell 2000 (+2.1%) and S&P Mid Cap 400 (+2.0%) capture even wider gains.

Stocks soared higher at the open following an announcement from Iran's foreign minister that the Strait of Hormuz will reopen to commercial traffic for the remainder of the U.S.-Iran ceasefire, which is set to expire on Tuesday. Additionally, The Wall Street Journal reported that the next round of talks between the two nations is likely to take place on Monday in Pakistan, and President Trump announced that Iran has indefinitely suspended its nuclear program.

Crude oil futures settled today's session $10.49 lower (-11.1%) at $84.22 per barrel, paving the way for broad participation and some impressive gains.

Airlines and cruise lines such as United Airlines (UAL 101.78, +6.75, +7.10%) and Royal Caribbean (RCL 285.48, +19.53, +7.34%) outperformed as oil retreated, contributing to strength in the consumer discretionary (+2.0%) and industrials (+1.8%) sectors.

Both sectors were also supported by solid gains across rate-sensitive stocks such as homebuilders and building supply names. The iShares U.S. Home Construction ETF finished 4.6% higher.

The pullback in oil prices has tempered the market's inflation expectations, and the CME FedWatch tool is now assigning a 50% probability to a rate cut of at least 25 basis points at the December FOMC meeting, up from around 30% yesterday.

Elsewhere, the top weighted information technology sector (+1.6%) also kept pace with the gains with semiconductor stocks leading the sector's advance, pushing the PHLX Semiconductor Index 2.4% higher.

Apple (AAPL 270.23, +6.83, +2.59%) was one of the best-performing "magnificent seven" stocks after Reuters reported China iPhone shipments increased 20% in the first quarter.

The communication services sector (+0.8%) logged one of the narrower gains today as Netflix (NFLX 97.31, -10.48, -9.72%) moved sharply lower after issuing disappointing Q2 guidance in its earnings release yesterday. Still, the sector finished well off its session lows due to strong leadership from its mega-cap components Alphabet (GOOG 339.40, +6.63, +1.99%) and Meta Platforms (META 688.55, +11.68, +1.73%). The Vanguard Mega Cap Growth ETF finished 1.4% higher.

Only the energy (-2.9%) and utilities (-0.4%) sectors finished lower.

Momentum remains firmly to the upside, with buyers continuing to push stocks into record territory with relative ease. The major averages have now notched week-to-date gains of at least 3% for three consecutive weeks, underscoring the strength of the rally as easing geopolitical tensions and improving rate-cut expectations continue to reinforce the market's bullish backdrop.

U.S. Treasuries had a strong finish to the week, pressuring yields on most tenors to their lowest closing levels in a month. The 2-year note yield settled down eight basis points to 3.70% (-10 basis points this week), and the 10-year note yield settled down six basis points to 4.25% (-7 basis points this week).

There was no economic data of note today.

• Russell 2000: +11.9% YTD
• S&P Mid Cap 400: +10.3% YTD
• Nasdaq Composite: +5.3% YTD
• S&P 500: +4.1% YTD
• DJIA: +2.9% YTD