Morning in New York: Trump's deadline for Iran in focus

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The news agenda related to the US-Iran conflict remains a key driver of market movements ahead of Washington's deadline to open the Strait of Hormuz (20:00 ET Tuesday or 02:00 Wednesday CET). The two sides had previously discussed a 45-day ceasefire, but Tehran is pushing for a more sustainable settlement. The US, meanwhile, maintains a tough stance and emphasizes the final nature of the deadline.

The mood of market participants remains reserved. According to Polymarket, the probability of reaching an agreement between Washington and Tehran is estimated at only 3%.

Oil prices moved up against this background: Brent was trading above $111 per barrel, WTI was above $116. This increases inflation risks and limits the growth potential of stock indices. The baseline scenario of the situation in the Middle East assumes that the status quo will be maintained, which will support the risk premium in oil prices and restrain demand for risky assets.

The participants of the upcoming session will focus on the preliminary data on the dynamics of durable goods orders for February (consensus: -1.2%, January: 0%). The forecast of the indicator excluding aviation and defense products suggests an increase of 0.5%. ADP employment statistics for the week to March 21 will also be released (10,000 new job openings in the previous corresponding period). In addition, the FRB New York will release its March estimate of the public's inflation expectations at the year horizon (consensus: 3.5%, February: 3%).

Investors are waiting for signals on the future course of monetary policy amid a combination of labor market stability and increased inflation risks from the scheduled speech of FRB Chicago President Austan Goolsbee today.

Futures on American stock indices demonstrate about zero dynamics. We assess the balance of risks for the current session as neutral with increased volatility.

- Broadcom (AVGO) shares added 3% in the premarket after announcing an agreement with Alphabet (GOOGL) to develop and deliver custom AI chips through 2030. The company is also expanding its partnership with Anthropic, which will have access to computing power based on Google's TPU processors starting in 2027, strengthening the chipmaker's position in the AI infrastructure segment.

- Health insurance companies demonstrated strong growth before the opening of the main trades. Humana (HUM) was up more than 10%, UnitedHealth (UNH) was up 7%, CVS Health (CVS) and Elevance Health (ELV) were up between 5-6%, and Centene (CNC) and Molina Healthcare (MOH) were up 4%. The occasion was the approval of final Medicare Advantage rates for 2027. Their base increase amounted to 2.48%, and the cumulative effect with adjustments is estimated at about 5%, well above market expectations. This creates grounds for improving the sector's margin forecasts.

- Organogenesis Holdings (ORGO) shares were soaring about 28% on the premarket after the company reported reaching the primary endpoint in a study of its PuraPly product.

- Owlet (OWLT) was up 3% before the start of the main session after the release of preliminary results for the first quarter, which exceeded average market expectations. The company's own revenue guidance is shifted closer to the upper boundary of the indicated range. The news of co-founder Kurt Workman's return to the post of CEO caused additional positivity.

April 6 trading on the U.S. stock exchanges ended on the positive territory near intraday highs. S&P 500 added 0.44%, Nasdaq 100 rose by 0.61%, Dow Jones rose by 0.36%, Russell 2000 rose by 0.42%.

The defensive consumer staples sector (XLP: +0.94%) led the growth, while materials producers (XLB: -0.38%) were the outsiders. Shares of major technology companies traded mixed. Alphabet (GOOGL: +1.43%) and Amazon (AMZN: +1.44%) were in high demand, while Tesla (TSLA: -2.15%) remained under noticeable pressure.

The informational background for stock players took a back seat to the technical rebound and improved positioning.

The ISM Services Business Activity Index for March declined to 54 points from 56.1 points a month earlier, with a consensus of 54.9, despite the strength of the new orders component. At the same time, the price component rose to its highest level in almost three and a half years. The Labor Department's March report released on April 3 was stronger than expected, which supported the overall macro backdrop. Despite this, Treasury yields remained stable, down 1-2 basis points on the long end of the curve. Reduced volatility in the debt market continues to be perceived as a supportive factor for risky assets.

-Soleno Therapeutics (SLNO: +32.3%) has agreed to a takeover by Neurocrine Biosciences (NBIX: +0.67%) at a price of $53 per share, which implies a premium of more than 34% to the previous close with a company valuation of approximately $2.9 billion.

-Encompass Health (EHC: +8%) was among the top gainers following a regulator's proposal to raise Medicare payments for rehabilitation facilities by 2.48% in 2027.

-Lucid Group (LCID: -6.3%) reported first quarter production of 5,500 vehicles and deliveries of 3,093 units, which was below market expectations. An additional negative was supplier quality issues affecting the production of the Gravity model.

- Seagate Technology (STX: +5.6%) shares reacted positively to signals of continued strong demand from hyperscalers and improved pricing environment in the HDD market. Quotes are supported by the expectation of sustained demand from data centers and AI infrastructure.

This article was AI-translated and verified by a human editor