S&P Futures Jump To Record, Oil Tumbles On Report Iran Foreign Minister Going To Pakistan

US equity futures jumped to a new all time high, reversing modest overnight losses, and oil tumbled to session lows on reports that Iran is sending a delegation to Pakistan today for talks, boosting hopes of ceasefire extension or more. Iranian Foreign Minister Araqchi is expected to arrive in Islamabad at 22:00 local time (1:00pm ET), the NY Post reports. As of 8:00am ET, S&P futures rallied as much a 0.6% to a new all time high of 7,190, reversing a modest loss in overnight trading as Brent tumbled from $107 to around $104 on the report. Tech shares rallied on the back of strong results from Intel and SAP SE, with the Nasdaq 100 up 1.3% and on track for a fourth straight weekly gain with most Mag 7 stocks trading higher. INTC added +29% amid surprises in both earnings and sales across all major businesses; the move will almost certainly extend the gains for semiconductor stocks to 18 straight days. The dollar slid 0.2%.  Brent erased gains to fall 1.2% to below $104 a barrel while WTI dropped $1.2 and is now at $94.68 after trading as high as $98 earlier. Treasuries advanced, with the 10-year yield down two basis points at 4.31%. Metals are mixed, gold rebound above $4700; ags are higher. Today's macro data include the final UMich consumer sentiment survey. 

In premarket trading, Mag 7 stocks are mostly higher (Microsoft +1.2%, Amazon +0.9%, Alphabet +0.6%, Meta +0.6%, Apple -0.1%, Tesla +0.9%)

• Comfort Systems USA (FIX) climbs 7% after the HVAC company reported revenue that beat estimates.
• Coursera (COUR) falls 10% after the online education company’s first-quarter profit missed the average analyst estimate and the midpoint of its full-year revenue forecast also undershot expectations.
• Edwards Lifesciences (EW) gains 2% after the medical devices firm reported a first quarter adjusted earnings per share beat, and boosted its sales forecast for the full year.
• HCA Healthcare (HCA) falls 7% after the health-care services company reported net income for the first quarter that met the average analyst estimate.
• Hims & Hers Health (HIMS) climbs 4% after JPMorgan initiated the stock with an overweight rating, citing improving vitals for the telehealth firm.
• Intel (INTC) shares are up 27% — and on track to close at an all-time high if gains hold through regular trading — after the chipmaker delivered a blockbuster sales forecast.
• MaxLinear (MXL) jumps 43% after the semiconductor company’s first-quarter results and second-quarter revenue forecast were both better than expected.
• Organon & Co. (OGN) climbs 21% after the Economic Times reported that Sun Pharma is planning to submit a binding offer of $13 billion to acquire the US-based pharmaceutical company.
• Procter & Gamble (PG) gains 3% after the consumer-products maker reported stronger-than-expected results for its latest quarter, driven by growth in the beauty category.
• SLB (SLB) falls 3% after the oilfield services company reported adjusted earnings per share for the first quarter that matched the average analyst estimate. The company also agreed to buy S&P Global Geoscience & Petroleum Engineering portfolio.
• World Kinect Corp. (WKC) rises 22% after the fuel-services company reported adjusted earnings per share for the first quarter that beat the average analyst estimate.

In corporate news, DeepSeek rolled out preview versions of a new flagship AI model a year after upending Silicon Valley, calling it the most powerful open-source platform in a challenge to rivals from OpenAI to Anthropic. Cognition AI is said to be in early talks to raise a new round of funding that would more than double its valuation to $25 billion. Mercedes-Benz is assessing potential cybersecurity risks linked to Anthropic’s Mythos model, signaling that concerns over threats from AI bots are spreading beyond the financial sector into the industrial economy. SoftBank plans to transform part of its Osaka factory into a major battery production line to power its AI data centers. President Trump said he is considering having the US purchase Spirit Aviation, saying it could be a potentially good investment for the federal government. United Airlines CEO Scott Kirby on deals, fuel price spikes and turf wars is the subject of today’s

Sentiment was boosted this morning after Pakistani officials familiar with the matter said Iran’s foreign minister was expected in Islamabad on Friday (around 10pm local time), with a second round of talks between Tehran and Washington expected. S&P futures jumped to a record high just under 7,200 as Brent erased gains to fall 1.2% to below $104 a barrel; the dollar slid 0.2%. Treasuries advanced, with the 10-year yield down two basis points at 4.31%. Still, we've seen such premature hope fizzle before; meanwhile in the Middle East, a US-sanctioned supertanker laden with Iranian oil appeared to be attempting to cross the Strait of Hormuz on Friday, with traffic through the waterway otherwise at a virtual standstill. As usual, traders will watch for headlines and signals from the US and Iran, along with shipping flows, for clues on energy supply risks, with any Strait of Hormuz escalation likely to keep oil elevated.

Tech shares rallied on the back of strong results from Intel and SAP, with the Nasdaq 100 on track for a fourth straight weekly gain. Intel surged 29% in premarket trading on a blockbuster sales forecast. Taiwan Semiconductor Manufacturing jumped 5% in Taipei after regulators eased limits on single-stock fund holdings.

“Those who called the end of the AI trade made a big mistake, as we can see looking at the semiconductor space,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers. “The earnings growth is just astounding. It’s a sweet spot where the offer for chips can’t meet the demand.”

Barclays strategist Emmanuel Cau notes the “renewed AI frenzy has seen semis stocks surging, widening further the US/Asia vs Europe performance gap.” US equity strength is supported by technical factors, Bloomberg notes as it echoes what we have been saying since late March, adding that gross exposure is high, net exposure isn’t, and there’s still cash that needs to be put to work. Discretionary managers have benchmarks to beat and higher dispersion shows the earning season is leading to a resumption of micro over macro.

Resurgent optimism over the economic potential of artificial intelligence has powered semiconductor manufacturers to an unprecedented 17-day rally. Investors also see the sector as at little risk of spillover from the Iranian war, with corporate profits and outlooks outpacing expectations in most instances.

“One takeaway from this earnings season is that the US leadership is back because of its dominance in tech, and semiconductors notably,” said David Kruk, head of trading at La Financiere de l’Echiquier in Paris. “Investors are now focusing more on earnings than geopolitics and taking the view that eventually a peace deal will occur.”

Equity and bond funds attracted the bulk of inflows this week, with stocks and IG bonds already tracking record annualized inflows, Bank of America says. Equity funds drew $25.9 billion, with US inflows at $18 billion in the week through April 22, according to BofA citing EPFR Global data. 

In Europe, SAP climbed 5.5% after reporting cloud backlog growth that reassured investors amid AI disruption concerns. Still, the Stoxx 600 fell 0.1%, with sectors such as autos and retail hit on concern that the war in the Middle East will have a long-lasting impact on consumer  sentiment; the energy sector gained. Here are some of the biggest movers on Friday:

• SAP shares rise as much as 7.3% after reporting current cloud backlog — a crucial indicator for future revenue to be booked — maintained a 25% growth rate on constant-currency terms in 1Q, beating expectations.
• Volvo shares rise as much as 2.6% as the Swedish firm raised its outlook for the European truck market after orders increased. Morgan Stanley calls the results strong and stable.
• Telia gains as much as 3.9% after the Swedish telecommunications group reported earnings. Analysts say the mostly in-line print is a good start to the year, noting a slight beat to Ebitda as a key positive.
• Siemens Energy rises as much as 4.9%, setting a new record high, after the firm saw significant order beats for both its Gas Services and Grid Technologies divisions in the second quarter and increased its outlook for the full year.
• Adyen shares rise as much as 5.3% after agreeing a deal to buy Talon.One in its first ever acquisition. The deal, while small to Adyen’s scale, is a good starting point for the payments firm and should boost its unified commerce offerings, according to analysts.
• Coloplast shares extend losing streak into a fifth day, dropping as much as 3.5% to the lowest since February 2014, after issuing a profit warning for the full year.
• Electrolux falls as much as 25%, the most on record, after the Swedish home appliances group reported significantly weaker-than-expected 1Q figures, driven by poor performance in its key North American market.
• MTU Aero Engines shares fall as much as 4.8% as UBS downgrades the German aircraft engine manufacturer to sell from neutral, citing exposure to a hard landing as the aftermarket cycle turns.
• Safran shares fall as much as 3.6% as Oxcap lowers its recommendation on the aerospace and defense firm to equal-weight from overweight, citing concerns around global commercial flight growth.
• Mondi shares fall as much as 8.9% as higher costs and lower prices hit the packaging company’s first-quarter earnings.

Asian stocks edged higher as tech stock gains outweighed concerns over the progress of US-Iran peace talks and shipping flows in the Strait of Hormuz. The MSCI Asia Pacific Index rose as much as 0.5% after swinging between gains and losses Friday. The gauge is headed for its third week of gains, the longest streak since the Iran war started. Taiwan’s Taiex index was the best performer in the region, with TSMC leading gains to a fresh record, after the island’s financial regulator eased limits on single-stock fund holdings. Tech stocks were also buoyed by Intel’s stronger-than-expected sales outlook. Meanwhile, equity benchmarks in China, India and Indonesia slipped. Despite mild gains on Friday, risk appetite remains muted into the weekend as investors await further signals from Washington and Tehran for clues on energy supply risks. While elevated oil prices remain a key macro risk, traders are looking for selective opportunities in the artificial intelligence theme. In Japan, investors will be watching out for next week’s Bank of Japan meeting. The BOJ is leaning toward leaving its policy rate unchanged on April 28 amid lingering uncertainty over the war in Iran, according to people familiar with the matter.

Brent erased gains to fall 1.2% to below $104 a barrel. A Pakistani official familiar with the matter said Iran’s foreign minister was expected in Islamabad on Friday, with a second round of talks between Tehran and Washington expected. The dollar slid 0.2%.

In rates, treasuries advanced, with the 10-year yield down two basis points at 4.31%. European bonds underperform over the early London session, led by gilts following stronger-than-expected UK retail sales data. UK yields lead European bond weakness, trading cheaper by up to 5bp across front-end of the curve

US economic data calendar slate includes April University of Michigan sentiment (10am) and Kansas City Fed services activity (11am)

Market Snapshot

• S&P 500 mini 0.5%,
• Nasdaq 100 mini +1.3%,
• Russell 2000 mini 0.4%
• Stoxx Europe 600 -0.1%,
• DAX -0.1%,
• CAC 40 -0.6%
• 10-year Treasury yield +0.4 basis points at 4.31%
• VIX 18.69, -0.70 points
• Bloomberg Dollar Index -0.2%
• euro little changed at $1.1685
• WTI crude -1.4% at $94.5/barrel

Top Overnight News

• Iran Foreign Minister to Visit Islamabad Friday, Pakistan Says; Oil Dips After Pakistan Says US-Iran Peace Talks Are Expected: BBG
• US President Trump posted that the meeting between Israel and Lebanon went well, the US is to work with Lebanon to protect itself from Hezbollah and that the Israel-Lebanon ceasefire is to be extended by three weeks: RTRS
• Israeli media: A limited operation against Iran may be carried out to avoid a prolonged war: Al Arabiya 
• An Iranian Ship Tried to Slip Past the Blockade. A U.S. Destroyer Chased It Down: WSJ
• Tanker Helga arrives at Iraq’s Basra offshore terminal to load 2mln BPD of crude, sources say; Helga is the second tanker to reach Basra terminals since the Hormuz closure.
• U.S. Soldier Charged With Using Classified Information to Bet on Maduro’s Ouster: WSJ
• Pentagon email floats suspending Spain from NATO, other steps over Iran rift: RTRS
• China to Curb US Investment in Tech Companies After Meta Deal: BBG
• Intel Shares Set to Eclipse Dot-Com Peak on Sales Forecast
• Conservative super PAC threatens to unseat Republicans over immigration bill: RTRS
• Hedge Fund at Center of Avis Squeeze Added to Stake Before Rout: BBG
• Citadel Sends Warning Shot to NYC After Mamdani Jabs Griffin: WSJ
• Meta Signs Multibillion-Dollar Deal With Amazon to Use Its CPU Chips for AI: WSJ
• Lilly’s New Obesity Pill Off to Slow Start in Race With Novo: BBG
• Oracle’s Deluge of AI Debt Pushes Wall Street to the Limit: WSJ
• Orban’s Son-in-Law Waits Out Hungarian Wealth Probe in New York: BBG
• Chinese Securities Regulator said that China is to allow qualified foreign investors to trade treasury futures from April 24, 2026, for hedging purposes only.
• US official said Russia is to be included in G20 summit invitations

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly in the red, ex. Nikkei 225, as bourses caught up to the selloff seen stateside, as risk-off flows dominated the tape after the reports that Israel is on high alert in anticipation of a possible renewed war this weekend. ASX 200 slipped further below the 8,800 handle, as losses in IT offset the gains made by Energy names. Nikkei 225 outperformed, supported by the tech sector as chips benefitted from Intel’s earnings (see more below). Ibiden, one of Japan’s biggest electronics companies, hit a new ATH while Canon fell after cutting its FY profitability guidance. Hang Seng and Shanghai Comp traded with the biggest losses, albeit just slightly, after a flurry of earnings. China Telecom reported Q1 net that fell by 17% Y/Y while autos underperformed.

Top Asian News

• Samsung Electronics (005930 KS) has produced the first working single-digit nanometer DRAM working die, TheLec reported citing sources; Co. intends to adjust processing conditions based on this.
• Nomura Holdings (8604 JT) FY25/26 (JPY): Net 362.1bln (prev. 340.7bln Y/Y), Pretax 539.8bln (prev. 432.1bln Y/Y), Revenue 4.76tln (prev. 4.74tln Y/Y). Cuts dividend.
• Hyundai Steel (004020 KS) Q1 (KRW) oper. profit 15.7bln (prev. loss 19.0bln Y/Y).
• Kia Motor (000270 KS) Q1 2026 (KRW): Net 1.83tln (exp. 1.93tln), Operating Profit 2.21tln (exp. 2.3tln), Revenue 29.5tln (exp. 29.3tln).
• Mercuria is to take a 25% stake in an aluminium smelter, as well as hunt for copper mining investments, the FT reported.
• Taiwan regulator is to increase the equity exposure limit per stock to 25% from 10% for funds and ETFs.
• Renesas (6723 JT) Q1 2026 (JPY): Revenue 380.3bln (prev. 308.8bln Y/Y) , Operating profit 90.6bln (prev. 21.5bln Y/Y).

European bourses started the European session with broad based losses, continuing the downbeat mood seen across APAC trade. From an index perspective, the IBEX 35 (-1.3%) lags peers, whilst the AEX (-0.1%) fares a bit better vs peers. European sectors hold a strong negative bias. Energy leads, buoyed by strength in underlying oil prices. Also for the sector, Siemens Energy  (+2.4%) gains post-earnings after it reported a mixed set of results, but raised its FY outlook; elsewhere, Eni (+1%) beat on its Adj. EBIT metric, and announced a 90% increase to its share buyback, citing an upbeat commodities outlook. Tech and Telecoms complete the top three. The Tech sector has been boosted today by post-earnings strength in SAP (+6.4%). The Co. reported better-than-expected operating profit and revenue, with cloud metrics also topping expectations. It also said it will buy back EUR 10bln of shares. To the bottom of the pile resides Autos, Basic Resources and Retail. The autos sector is underperforming this morning with seemingly broad-based losses; Volvo (+1%) reported Q1 metrics today, where its metrics were mixed, but ultimately indicating resilience amidst challenges.

Top European News

• German Ifo Current Conditions (Apr) 85.4 vs. Exp. 85.5 (Prev. 86.7, Low. 83, High. 87).
• German Ifo Business Climate (Apr) 84.4 vs. Exp. 84.8 (Prev. 86.4, Low. 83.7, High. 87.5).
• German Ifo Expectations (Apr) 83.3 vs. Exp. 83.9 (Prev. 86.0, Low. 82, High. 87.3).
• Spanish PPI YoY (Mar) Y/Y 3.4% (Prev. -7%).
• French Consumer Confidence (Apr) 84 vs. Exp. 88 (Prev. 89, Low. 87, High. 89).
• Hungarian Unemployment Rate (Mar) 4.7% (Prev. 4.9%).
• UK Retail Sales YoY (Mar) Y/Y 1.7% vs. Exp. 1.3% (Prev. 2.5%, Low. 0.8%, High. 2.2%).
• UK Retail Sales ex Fuel YoY (Mar) Y/Y 1.7% vs. Exp. 2.0% (Prev. 3.4%, Low. 1.5%, High. 2.5%).
• UK Retail Sales ex Fuel MoM (Mar) M/M 0.2% vs. Exp. 0.2% (Prev. -0.4%, Low. -0.5%, High. 0.6%).
• UK Retail Sales MoM (Mar) M/M 0.7% vs. Exp. 0.0% (Prev. -0.4%, Low. -0.8%, High. 1.8%).

Trade/Tariffs

• China reportedly to add seven EU companies to export control list, according to reported. Hensoldt (HAG GY) was added.
• Canada is reportedly to seek talks with the EU regarding access to ‘Made in Europe’ scheme, according to FT.
• China's Commerce Minister met with the President of European Automotive Manufacturers Association to talk about the China-EU auto industry cooperation and EU trade restrictions. Commerce Minister stated that China will firmly safeguard Chinese firm's rights.
• US President Trump tells the Telegraph that the US will retaliate if the UK continues to target companies such as Apple (AAPL) , Google (GOOGL) and Meta (META) through the digital services tax.
• US President Trump said the US will put a tariff on the UK if the digital service tax is not dropped.

FX

• FX price action is lacklustre on the final trading day of the week. DXY leads marginally, while CHF and JPY are slightly lower.
• DXY trades tentatively and broadly in tandem with oil prices. A light calendar ahead with the Fed on blackout ahead of next week's meeting and only UoM final data on the docket. USD-specific news light, though the Japanese Finance Minister said overnight there were no plans to change currency swap lines with the US. DXY still remains supported above 100 and 200 DMAs at 98.50; upside resistance is 98.90, which marks the session high.
• SNB Chairman Schlegel was on the wires a couple of times. He said they have "unrestricted" room for manoeuvre when it comes to the policy rate and FX intervention - Vice Chair Martin also echoed these remarks. EUR/CHF is unchanged on the session; it attempted to approach 0.92, but the move faltered at 0.9199.
• Katayama is also on the wires, she said "will take decisive action on speculative activity", JPY unchanged, in a signal that markets are becoming comfortable with the Finance Minister's threats. USD/JPY unchanged, looks at 160 to the upside. BoJ rate decision next week, likely to remain on hold, with all eyes on Governor Ueda's tone at the presser.
• GBP shrugged off strong UK Retail Sales for March, as it does not change the narrative into next week's BoE, where a hold is the base case. The data showed upside was driven by an increase in fuel sales, with retailers reporting that motorists were filling their tanks when buying following the start of the Middle East conflict. Online sales saw upside and are potentially indicative of a robust spring sale period. However, the core figures were in line/softer-than-expected, and potentially point to some greater-than-expected caution among consumers during the early stages of the Middle East conflict. EUR/GBP and Cable both unchanged, the former on a 0.8670 handle.

Fixed Income

• A modestly bearish session for fixed benchmarks, initial action a function of the modest and since increasing energy upside as we count down to and participants position into a potentially risk-packed weekend.
• Amidst this, USTs post downside of a handful of ticks in a thin 110-30 to 111-03 band. Ahead, the US docket is light, and we look to next week's FOMC.
• Bunds post slightly larger downside, perhaps as Dutch TTF has been leading oil benchmarks throughout the morning. Currently, in the red by c. 30 ticks but also in a relatively narrow 125.20-44 band. The European docket is light, aside from Italian supply (should be well received, particularly after the sizeable demand at last week's syndications); as such, price action will likely be dictated by geopolitical developments.
• Gilts gapped lower at the open, acknowledging the pressure in fixed peers seen late-Thursday. Opened at 87.10, lower by 41 ticks. Thereafter, slipped another 28 to an 86.82 low and has held there since; the second bout of pressure spurred by further energy upside and a hawkish BoE DMP. The DMP spurred end-2026 BoE pricing to 59bps of tightening from c. 54bps this morning and significantly above the 23bps implied this time last week.
• To recap the day's data. UK Retail Sales were strong on a headline level but in-line/soft on a core basis, with consumer motor fuel purchases driving the headline, no implications for the BoE next week (hold expected, guidance in focus). Thereafter, Germany's Ifo was soft across the board, with no real follow-through to EGBs.
• Italy sold EUR 2.5bln vs exp. EUR 2.25-2.5bln 2.20% 2028 BTP Short Term: b/c 1.63x (prev. 1.78x) & average yield 2.80% (prev. 2.89%).
• Australia sold AUD 1bln vs exp. AUD 1bln 2.50% 2030 AGB: b/c 3.82x (prev. 3.44x), average yield 4.6947% (prev. 4.2888%).

Commodities

• In geopolitics, fresh updates have been light as focus remains on the state of the US-Iran ceasefire and talks. The week ahead centres on four key watchpoints. First, the Strait of Hormuz “red line”: President Trump has warned the US Navy could actively engage IRGC vessels suspected of laying mines or interfering with traffic, shifting from shadowing to potential direct strikes, particularly after an IRGC-escorted Iranian ship defied the blockade. Second, the nuclear deal standoff: Washington is pushing for a comprehensive deal, while Tehran insists the nuclear file is not part of the current talks, raising the risk that negotiations collapse if neither side compromises on uranium enrichment. Third, internal dynamics in Tehran: reports of leadership friction and IRGC influence over the negotiating team point to possible policy inconsistency or hardline escalation. Fourth, ceasefire fragility: despite the extended Israel-Lebanon truce, sporadic clashes and reported drone activity underline how easily a trigger event could occur.
• Oil rose for a fifth day as limited US-Iran progress towards resumed de-escalation talks kept supply concerns elevated; Brent climbed above USD 106/bbl (vs weekly lows of ~ USD 91/bbl) and is set for its biggest weekly gain since the war’s first week. WTI June, however, remains sub-USD 100/bbl. Brent currently trades in a daily range between 105.02-107.40/bbl while WTI resides in a USD 95.55-97.85/bbl range.
• Gold edged lower, below USD 4,970/oz, with investors weighing whether higher crude prices from the US-Iran conflict could keep inflation and interest rates elevated. XAU/USD resides in a USD 4,658.03-4,711.23/oz range at the time of writing.
• Copper heads for a weekly loss, with the broader base metals complex also mostly under pressure, as uncertainty over the Middle East war clouds the global growth outlook, while the US and Iran show little sign of returning to talks after Trump extended the ceasefire indefinitely, and the Strait of Hormuz remained largely blocked. 3M LME copper resides in a USD 13,215.58- 13,322.33/t. LME aluminium spread experiences the largest backwardation since 2024.
• Japanese PM Takaichi said she is urging the cabinet to seek new sources for oil imports.
• Union Spokesperson said workers at Australia's INPEX (1605 JT) LNG plant vote in favour of strikes.
• EU leaders have tasked Finance Ministers to come up with new measures to deal with potential energy shortages after assessing that current proposals were not enough, Bloomberg reported, citing sources.
• Japan's METI said Japan is to release 5.8mln kL of national oil reserves, starting May 1st.
• Imports of Russian fuel oil to Singapore has jumped with volume in April already more than double the average monthly amount in 2025, according to FT citing Vortexa data.
• The fire at Russia's Tuapse oil terminal is under control.
• US President Trump said that the US does not have an oil shortage and are taking millions of barrels of oil from Venezuela. Have a great relationship with Venezuela.
• CME cuts initial margin on its Comex 100 gold futures to 6% from 7% and Comex 5000 silver futures to 11% from 14%.

Geopolitics: Middle East

• US President Trump posted that the meeting between Israel and Lebanon went well, the US is to work with Lebanon to protect itself from Hezbollah and that the Israel-Lebanon ceasefire is to be extended by three weeks.
• US President Trump said nobody is trying to get through the US blockade.
• US President Trump said the Israel-Lebanon talks in the Oval Office went well and it would be great to resolve simultaneously with Iran. Looking forward to the next meeting with Israeli PM Netanyahu. Great chance of peace between Israel and Lebanon this year. Everyone seems united against Hezbollah. Israel-Lebanon peace should be an easy one. Israel will have to defend itself if they are shot at. Israel will be surgical in their self-defence. Iran has to cut its Hezbollah funding.
• Tanker Helga arrives at Iraq’s Basra offshore terminal to load 2mln BPD of crude, sources say; Helga is the second tanker to reach Basra terminals since the Hormuz closure.
• "Israeli media: A limited operation against Iran may be carried out to avoid a prolonged war", Al Arabiya reported.
• Pakistani official noted of a state of uncertainty regarding the second round of talks, "and we await Iran's response", Al Arabiya reported.
• Israel again attacks southern Lebanon, claiming retaliation for overnight rocket fire, Al Jazeera reported.
• Lebanese press Al-Jumhuriya noted of accelerated diplomatic efforts toward a Lebanon–Israel non-aggression agreement, driven by the US–Saudi–Egypt initiative, Journalist Kais reported. Plan revives idea of containing (not dismantling) Hezbollah’s weapons. Key proposed terms:. Israel withdraws to ceasefire line. Lebanese army deploys in south. Hezbollah moves north of Litani River. Start of weapons containment plan. Border disputes (Blue Line) adjusted. Prisoner releases, return of civilians, reconstruction. Deal would have international (especially US) guarantees. Coordination includes Iran to ensure Shiite/Hezbollah involvement. Parallel effort to resolve internal Lebanese political divisions. Saudi envoy pushing for meeting of Lebanon’s top leaders to create a unified position.
• "Iranian Foreign Ministry: Araqchi held two called with the Pakistani army chief and foreign minister to discuss a ceasefire.", Al Araby reported.
• Iranian Vice President said any attack on oil wells will be met with strikes on attackers’ oil facilities; said it will be beyond “eye for an eye” response, Mehr News reported.
• Senior IRGC Commander said Tehran is secure and its borders are stronger than before, Press TV reported.
• The US has put a USD 10mln bounty on the leader of the Iran-backed Shiite militia group in Iraq, CBS reported.
• Lebanese media reported that Israel have conducted airstrikes on the town of Al-Qasir in southern Lebanon a few hours after US President Trump announced the 3-week ceasefire extension, IRIB reported.
• Israel's ambassador to the UN said the extension of the Lebanon ceasefire is not 100% certain and that Israel is forced to answer every time a threat is detected, Tasnim reported citing CNN.
• US military are developing plans to target Iran's Hormuz defences if the ceasefire fails, CNN reported.
• Israel-Lebanon talks have gotten underway in the White House, according to reported.
• Hezbollah said it has launched rockets at Israel's Shtula region in response to Israel violating ceasefire and targeting towns in southern Lebanon.
• Israeli military said several launches crossed from Lebanon towards Israel were intercepted.
• An internal Pentagon email explores options to punishing NATO allies that the US believes failed to support the US operations against Iran, according to a US official. Options include:. Suspending Spain from NATO. Reviewing the US position on British claims to the Falkland Islands. Suspending difficult countries from important or prestigious positions at NATO.

Geopolitics: Ukraine

• Ukrainian authorities say a foreign-flagged ship bound for Odesa was attacked by Russian drones.
• Imports of Russian fuel oil to Singapore has jumped with volume in April already more than double the average monthly amount in 2025, according to FT citing Vortexa data.
• The fire at Russia's Tuapse oil terminal is under control.
• US official said Russia is to be included in G20 summit invitations.

US Event Calendar

Markets are entering the final day of the trading week in a cautious mood as US-Iran tensions show no signs of easing while the Strait of Hormuz remains essentially closed. Ahead of the weekend, there have been no signs of further talks, with Trump saying the “I don’t want to rush myself” when it comes to making a deal, while also claiming that “whatever I’m doing, it seems to be working very well”. Meanwhile, we saw Iran’s President, Foreign Minister and Parliamentary Speaker share similar messages of regime “unity” in short succession last night, after Trump posts claimed “infighting” between “Hardliners” and “Moderates” in Iran. The rhetoric had also leant in an escalatory direction earlier yesterday, with Trump posting that he’d ordered the US Navy to shoot boats placing mines in the Strait of Hormuz. So all that has left lingering uncertainty, even as Israel and Lebanon have agreed overnight to extend their ceasefire by three weeks according to the White House.

From a market perspective, that means oil prices continue to grind higher, with Brent crude rising +3.10% yesterday and another +0.97% overnight to $106.09/bbl. Unlike many recent sessions, this also weighed on US equities. The S&P 500 spiked lower just after Europe went home amid headlines that air defences had been activated in Tehran, before partially recovering to -0.41% by the close, with reports that this had been due to small drones rather than signifying a collapse of the ceasefire. Still, with the cacophony of headlines showing no signs of de-escalation, oil prices held onto most of their gains, while both 2yr (+3.6bps) and 10yr (+2.3bps) US Treasury yields closed higher on the day. We have seen some stablisation of these moves overnight, with both S&P 500 futures (-0.06%) and 10yr Treasury yields little changed.
In Asia, the Hang Seng (-0.20%), the CSI (-0.85%), the Shanghai Composite (-0.56%), the S&P/ASX 200 (-0.28%), and the KOSPI (-0.36%) are all in negative territory. In contrast, the Nikkei (+0.61%) is being boosted by tech, even in light of slightly stronger inflation figures from Japan. Core consumer prices increased by +1.8% year-on-year in March, up from +1.6% in February, a tenth ahead of expectations. Headline and core-core were inline. The BOJ is scheduled to convene next week, where it is anticipated that it will maintain current interest rates, while also signaling a potential readiness to raise rates.

Back to yesterday and oil's gains extended across the futures curve. The 6-month Brent future (+2.34%) reached a 3-week high of $86.74/bbl as investors geared up to facing a more prolonged period of high energy prices. The pressures were even more visible in downstream products with US wholesale gasoline prices (+3.10%) reaching their highest level since 2022. This was echoed in near-term inflation swaps as well, with the 1yr Eurozone inflation swap (+16.2bps) surging up to 3.35%, whilst the 1yr US inflation swap (+8.6bps) rose to 3.32%, with the latter now only 6-7bps below its high on March 20.  

The exception to the overall cautious mood were semiconductor stocks. The Philadelphia semiconductor index (+1.71%) posted a record 17th consecutive advance, having now risen by an astonishing +41.1% over that run. See my CoTD yesterday here for more. The positive mood for chipmakers continued overnight after Intel’s Q2 sales guidance came in well above expectations ($13.8-14.8bn vs $13bn expected). Its shares surged by +20% in after-hours trading, helping NASDAQ futures to a +0.39% gain overnight.

The broader tech mood had been more downbeat in yesterday’s session, with the NASDAQ (-0.89%) underperforming and the Mag-7 (-1.56%) posting its biggest decline in four weeks. Meta (-2.31%) lost ground after announcing plans to cut 10% of its workforce, while Microsoft (-3.97%) announced voluntary buyouts that could cover up to 7% of its employees. There is a sense that these job losses are there to offset huge capex spend. Tesla slid by -3.56% after its results the previous evening.

In terms of yesterday’s other news, we saw a notable divergence between the US and European data with the release of the flash April PMIs. Strong US data raised hopes that the economy’s resilience was holding up into Q2. In fact, the flash composite PMI for April moved up to 52.0 (vs. 50.6 expected), with both the manufacturing (54.0) and services prints (51.3) coming in above expectations, while the subindices also pointed to rising price pressures. This saw markets dial down remaining Fed cut pricing, with a cut by year-end now only 20% priced, down from 30% at Wednesday’s close. 

Over in Europe, the PMIs told quite a different story, with clear weakness across much of the continent. Most notably, the Euro Area composite PMI fell to 48.6 (vs. 50.1 expected), which was a 17-month low and beneath the 50 mark that separates expansion from contraction. So that confirmed fears that Europe was headed for a more obvious stagflationary hit from the rise in energy prices. Indeed, that showed up in the price components, with input prices rising at their fastest since December 2022, and output prices at their fastest since March 2023.  

Given the stagflationary implications of the PMIs, European assets struggled to gain much traction yesterday before the US sell-off. Moreover, investors priced in a growing chance of ECB hikes to deal with the price shock, and the amount of hikes priced by December was up +10.5bps on the day to 59bps. Nevertheless, sovereign bond yields were broadly steady as higher inflation expectations were offset by lower real rates on the back of the growth fears. So 10yr bund yields were unchanged at 3.01%, while 10yr OATs (+0.7bps) and BTPs (+1.3bps) saw slight increases. Otherwise, the STOXX 600 (+0.05%) was basically flat, finally stabilising after three consecutive declines.
Here in the UK, gilts continued to underperform yesterday, with the 10yr yield (+3.0bps) up to 4.94%, whilst the 30yr yield (+3.6bps) hit a 7-month high of 5.61%. In part, that came as the political speculation around PM Starmer’s position continued to swirl. But the UK also saw a clear outperformance in the PMIs, with an unexpected increase that went against the pattern in the Euro Area. For instance, the composite PMI was up to 52.0 (vs. 49.8 expected), with a rise in both manufacturing (53.6) and services (52.0). So that added to expectations that the Bank of England would hike rates this year, with markets now pricing in 55bps of hikes by the December meeting, up +4.3bps on the day.

Looking at the day ahead, data releases include the Ifo Institute’s business climate indicator from Germany, and in the US there’s the University of Michigan’s final consumer sentiment index for April. Central bank speakers include the ECB’s Panetta, whilst today’s earnings include Procter & Gamble.