The cease-fire between the United States and Iran, however shaky, helped lift stocks and calm the sort of panic that sends traders lunging for the nearest exit. The S&P 500 has rallied sharply from its late-March low, while the Dow is on track for one of its best weeks in months. The central question hanging over this session is whether the market's recent bounce rests on anything sturdier than hope. The fighting may have eased, but the region is not calm.

Washington and Tehran have accused each other of violating cease-fire commitments. Israel, under pressure from President Trump, has agreed to begin direct talks with Lebanon, a move meant to keep the truce from collapsing before U.S.-Iran negotiations this weekend. Iran continues to limit shipping through the narrow channel, and traffic remains badly disrupted. Until that changes, oil stays central to the story. Prices have cooled from the panic highs near $115 a barrel, but they are still hovering in the mid-to-high $90s, well above where they sat before the conflict.

That is why today’s inflation report mattered so much. It offered the first real test of how last month’s energy shock hit American consumers, and the results were firm but not as bad as feared. Consumer prices rose 0.9% in March from the prior month, matching expectations, while annual CPI came in at 3.3%, just below the 3.4% forecast. Core CPI, which strips out food and energy, rose 0.2% on the month and 2.6% from a year earlier, both cooler than expected.

The message for the economy is mixed, but not alarming. Headline inflation was clearly pushed up by energy, confirming that the oil shock made its way into consumer prices. But the softer core reading suggests underlying price pressures remain more contained than the headline number alone would imply. That should offer some reassurance to the Federal Reserve: inflation has not reaccelerated broadly across the economy, even if geopolitical unrest is still feeding through at the gas pump.

A headline number driven by oil is less troubling than a broad-based rise in underlying inflation, because it is less likely to force the Fed into a more hawkish stance. The report does not clear the way for aggressive rate cuts, but it may help preserve the view that policymakers can stay patient rather than turn more restrictive. In that sense, the data modestly supports the recent rally in equities, especially in interest-rate-sensitive groups. Futures rose slightly after the report.

Regional banks such as Ally Financial and Truist are especially sensitive to changes in rate expectations. Homebuilders like D.R. Horton and Lennar are too, because mortgage demand depends heavily on where borrowing costs go next. With core inflation coming in softer than forecast, both groups could find some relief, even if higher oil prices still cloud the broader outlook.

Meanwhile, one corner of the market is behaving as if none of this applies: the AI trade. That theme came roaring back as optical-equipment makers such as Lumentum, Coherent, and Corning gained on reports of strong demand tied to artificial-intelligence infrastructure. Corning, in particular, has become an unlikely symbol of this moment: a 175-year-old glass company suddenly recast as an AI winner. But this rebound is narrow, and that is worth noticing. Investors are rewarding the hardware backbone of AI: chips, networking gear, data-center components, the industrial picks and shovels. They are much less generous toward software firms and IT-services companies, some of which are increasingly viewed not as beneficiaries of AI, but as future casualties of it. Even Palantir, usually treated as an AI favorite, came under pressure. The market is drawing a sharper line now between companies building the machine and companies that might be replaced by it.

Elsewhere, Taiwan Semiconductor rose after beating revenue expectations, another sign that investors still trust the firms closest to the silicon. Organon jumped on reports that India’s Sun Pharmaceutical made a binding offer for the company.

Today's economic highlights:

On today's agenda: the PPI and inflation indices in China; consumer confidence in Switzerland; industrial production in Italy; in the United States, the CPI, inflation indices, University of Michigan consumer sentiment, factory orders, and the monthly budget; in Canada, employment changes, unemployment rate, and participation rate. See the full calendar here.

  • Dollar index: 98.930
  • Gold: $4,743
  • Crude Oil (BRENT): $97.81 (WTI) $100.11
  • United States 10 years: 4.3%
  • BITCOIN: $71,673

In corporate news:

  • SpaceX reportedly posted a roughly $5 billion net loss in 2025 despite generating more than $18.5 billion in revenue.
  • Apple led global smartphone shipments in the first quarter, with shipments up 5% year on year, according to Counterpoint Research.
  • Anthropic briefed U.S. officials and major banks on the cyber risks of its new Mythos AI model, prompting warnings from Treasury Secretary Scott Bessent and Fed Chair Jerome Powell to bank CEOs.
  • Taiwan reported record March exports of $80.18 billion, driven by strong AI and technology demand.
  • Meta Platforms is reassigning top engineers to its new applied AI engineering division to strengthen its competitiveness in AI.
  • Eli Lilly's Mounjaro sales in India fell in March as generic semaglutide gained share after Novo Nordisk's patent expiry.
  • ConocoPhillips is evaluating a possible return to Venezuela for oil and gas drilling opportunities after leaving the country in 2007.
  • Lumentum Holdings said booming demand from U.S. hyperscalers could keep its optical component order book full through 2028.
  • iQPS signed a contract with Rocket Lab for three additional Electron satellite launches.
  • Zebra Technologies partnered with Aiva Health to bring AI-powered hands-free nurse workflow tools to Zebra healthcare devices.
  • Amgen's lung cancer drug tarlatamab won approval in China through its partner BeOne Medicines.
  • EQT and Glencore agreed to buy an additional 1 million metric tons of LNG annually from Commonwealth LNG under 20-year contracts.
  • OpenAI executive Peter Hoeschele, linked to the Stargate project, has left the company.
  • Abbott Laboratories was ordered by a Chicago jury to pay $53 million in compensatory damages in litigation over preterm infant formula warnings.
  • CoreWeave has signed a massive $21 billion AI contract to provide computing power to Meta.
  • A $7 billion private credit fund managed by The Carlyle Group has capped redemptions following withdrawal requests totaling 15.7% of assets under management in Q1.
  • Google has committed to using future generations of Intel's Xeon processors.
  • ConocoPhillips is sending a team to Venezuela to assess oil potential, according to Bloomberg.
  • Lockheed Martin has secured a $4.8 billion missile order from the Pentagon.
  • Amazon is increasing its investment in Mississippi data centers by $12 billion.

Analyst Recommendations:

  • Aflac Incorporated: Evercore ISI downgrades to underperform from outperform and reduces the target price from USD 236 to USD 112.
  • Axalta Coating Systems Ltd.: Wells Fargo downgrades to market weight from overweight and reduces the target price from USD 39 to USD 30.
  • Madison Square Garden Sports Corp.: Seaport Global upgrades to buy from neutral with a target price of USD 430.
  • Nexstar Media Group, Inc.: Citi upgrades to buy from neutral and reduces the target price from USD 252 to USD 220.
  • Nike, Inc.: Piper Sandler & Co downgrades to neutral from overweight and reduces the target price from USD 60 to USD 50.
  • Servicenow, Inc.: UBS downgrades to neutral from buy and reduces the target price from USD 170 to USD 100.
  • The Sherwin-Williams Company: Wells Fargo downgrades to market weight from overweight and reduces the target price from USD 410 to USD 365.
  • Booking Holdings Inc.: B Riley Securities Inc. maintains its buy recommendation and reduces the target price from USD 6800 to USD 272.
  • Builders Firstsource, Inc.: Goldman Sachs maintains its buy recommendation and reduces the target price from USD 142 to USD 110.
  • Graphic Packaging Holding Company: Jefferies maintains its hold recommendation and reduces the target price from USD 13 to USD 10.
  • Houlihan Lokey, Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from USD 210 to USD 155.
  • Lumentum Holdings Inc.: TD Cowen maintains its hold recommendation and raises the target price from USD 675 to USD 875.
  • Permian Resources Corporation: Wells Fargo maintains its overweight recommendation and raises the target price from USD 21 to USD 27.
  • Sandisk Corporation: Mizuho Securities maintains its outperform rating and raises the target price from USD 710 to USD 1000.
  • Stifel Financial Corp.: Citizens maintains its market outperform recommendation and reduces the target price from USD 155 to USD 103.
  • Strategy Incorporated: TD Cowen maintains its buy recommendation and reduces the target price from USD 440 to USD 350.