Markets rally despite geopolitical risk

U.S. stocks jumped on April 14, with the Standard and Poor’s 500 up 1.1% and the Nasdaq Composite nearly 2%, even as the United States and Iran remained at odds. (finance.yahoo.com) The Dow Jones Industrial Average rose 0.6%, and the Nasdaq extended its winning streak to 10 sessions. Yahoo Finance reported West Texas Intermediate crude fell 7% to about $91 a barrel and Brent crude dropped 4% to about $95. (finance.yahoo.com) The move followed President Donald Trump’s April 14 comments that Iran had been in touch and wanted a deal, while he said he would not accept any agreement that let Tehran keep a nuclear weapon. Reuters reported stock-index futures had already risen before the open on hopes of de-escalation. (money.usnews.com) Markets had sold off earlier in the conflict because the Strait of Hormuz is a chokepoint for oil shipments, and higher energy prices can feed into inflation. On April 13, West Texas Intermediate settled at $99.08 and Brent at $99.36 after the United States began a blockade of maritime traffic to and from Iranian ports. (cnbc.com) Inflation data also shifted the mood. The Bureau of Labor Statistics said producer prices rose 0.5% in March, below the 1.1% increase economists expected, after consumer prices had risen 0.9% in March and 3.3% over the prior 12 months. (bls.gov 1) (bls.gov 2) That softer producer-price reading gave investors room to focus on earnings. Yahoo Finance reported JPMorgan Chase posted a 13% profit increase, while BlackRock, Wells Fargo and Citigroup also beat expectations. (finance.yahoo.com) Technology shares did much of the lifting a day earlier. CNBC said Oracle rose nearly 13% on April 13 and Palantir Technologies gained more than 3%, helping the Standard and Poor’s 500 erase its decline since the Iran war began. (cnbc.com) The rebound has come fast enough to revive warnings from technical traders that stocks look stretched after a 10-day Nasdaq run. TradingView’s market guide says “overbought” usually refers to a Relative Strength Index reading that signals prices have risen quickly enough to raise the odds of a pullback. (tradingview.com) (barchart.com) For now, investors are trading the possibility that diplomacy can keep oil below the triple-digit levels seen earlier this week. If those talks stall again, the same energy and inflation pressures that rattled markets on April 13 could return just as quickly. (finance.yahoo.com) (cnbc.com)