Morning Bid: Back to business

By Mike Dolan

April 15 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

Global stock markets are largely back near pre-war levels and Wall Street is once again flirting with record highs, as the mood music from the Middle East and Washington turns positive on hopes of more peace talks.

Real or imagined, that narrative is capping crude prices, allowing investors to refocus on earnings and economic fundamentals.

I’ll get into that and more below.

But first, check out my latest column, where I dig into markets’ apparent belief that the war is likely over, bar the shouting.

And listen to the latest episode of the Morning Bid daily podcast, where I discuss corporate earnings and the IMF’s latest global growth forecasts.

Finally, don’t forget to mark April 23 in your calendar, when I’ll be joining my ROI colleague Jamie McGeever for a timely webinar discussion on rethinking safe-haven assets in uncertain times. Sign ⁠up here.

BACK TO BUSINESS

Brent and WTI crude were still comfortably below $100 a barrel heading into Wednesday, trading at around $96/bbl and $92/bbl, respectively. That followed comments from President Trump on Tuesday that talks with Iran could resume in days, even as the U.S. military said it had halted Iran’s maritime trade as part of its naval blockade of the Strait of Hormuz.

This helped fuel another Wall Street rally on Tuesday. The Nasdaq jumped 2%, while the S&P 500 rose 1% to close just shy of its record high. Asian equities followed suit on Wednesday, with Japan’s Nikkei up 0.9% and South Korea’s KOSPI surging 3%. European stocks traded flat, as did U.S. futures before the bell.

In a sign that the recovery hasn’t only been on Wall Street, the MSCI all-country index, excluding U.S. stocks, hit its best levels since March 2 on Tuesday. Elsewhere, the VIX volatility index returned to its February levels and the dollar continued to give back its safe-haven gains, hovering near its lowest point since the war.

The optimism at large looks to be justified by corporate earnings, which kicked off in earnest this week with mostly bumper results from the U.S. banks. JPMorgan beat first-quarter profit expectations, helped by robust trading revenue and dealmaking, while Citi reported its strongest quarterly revenue in a decade, sending its shares to their highest point since 2008. Bank of America and Morgan Stanley will report later today.

ASML, the world’s largest chipmaking tool supplier, added to the upbeat tone on Wednesday as it beat earnings expectations and lifted its 2026 revenue outlook on AI-driven demand.

Although the IMF trimmed its global growth forecasts on Tuesday - and even warned the world could be drifting toward an “adverse scenario” amid the war - its reference forecast assumes a short-lived conflict, with its global growth forecast unchanged for 2027.

Meanwhile, U.S. producer prices jumped in March due to the energy shock, but the increase was almost half what economists had expected - a reassuring sign, particularly as the data covered a period after the start of the Iran conflict.

Chart of the day

As financial markets return to pre-war levels, many investors are looking at just why the March oil shock has not shifted the dial much on global economic forecasts. One of many reasons is the world economy’s dwindling dependency on fossil fuels, with the share of power generated by wind and solar more than trebling over the past decade.

Today’s events to watch

* U.S. March import prices (8:30 a.m. EDT)

* Fed’s Michael Barr and Michelle Bowman speak

* Fed issues the Beige Book

* U.S. corporate earnings: Bank of America, Morgan Stanley

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Mike Dolan)