JPMorgan CEO Jamie Dimon
These are the early headlines and other items poised to influence the market at the start of trading Monday. As we share this collection of market drivers, U.S. equity futures point to a modestly higher open.
1. The U.S., Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war, according to four U.S., Israeli and regional sources with knowledge of the talks. (Axios)
While sources for that report said the chances for reaching a partial deal over the next 48 hours were slim, in speaking with Axios on Sunday, President Trump commented that the U.S. is “in deep negotiations” with Iran and that a deal can be reached before his deadline expires on Tuesday at 8 PM ET. Per Axios, Trump said, “There is a good chance, but if they don’t make a deal, I am blowing up everything over there.”
We are back in “wait and see” mode with oil prices down a few dollars overnight and holding steady this morning, and the dollar also steady as we wait for more on this potential peace plan. Odds are the market, for the most part, is going to tread water until we hear from Trump at a 1 PM ET press conference. As we digest his comments, we’ll be keeping a close eye on the S&P 500 against its downward-sloping 20-day moving average at 6644.60, a favorite among traders.
2. The finance ministers of Spain and four other European countries are urging the European Union to impose a bloc-wide windfall tax on energy companies, concerned that surging oil and gas prices driven by the war in Iran will fuel inflation and strain households. (AP News)
Unlike the U.S., Europe is largely dependent on imported oil and gas, and if this proposal finds legs, it has the potential to reshape expectations. While Exxon Mobil (XOM) doesn’t disclose its precise geographic exposure, its non-U.S. regions, which include Europe, account for ~62% of total revenue. For BP Plc (BP) , Europe accounts for 40%-45% of its sales.
3. Chief Executive Jamie Dimon warned that the war in Iran could push up inflation and drag down financial markets even further if interest rates start to rise. In his annual letter to shareholders, Dimon said there is a risk of more oil and commodity price shocks in the months ahead, which could lead to prolonged inflation and ultimately higher interest rates. (WSJ)
This supports our view that where oil, gas, diesel, and other prices impacted by the conflict settle out in the coming weeks and months will determine the extent of renewed inflation pressures and their impact on consumer spending, corporate margin expectations, and Fed policy.
4. Citigroup has pushed back its Fed rate-cut timeline, citing unexpectedly strong U.S. job gains and persistent inflation risks. The Wall Street brokerage now expects a total of 75 basis points of rate cuts in September, October and December instead of June, July and September. (Reuters)
We are not surprised to see Citigroup (C) or other investment banks push out rate-cut timing expectations following Friday’s stronger-than-expected March Employment Report. For those that missed it, the domestic economy added 178,000 jobs during the month, the most since the end of 2024, and the Unemployment Rate fell to 4.3%.
Looking at the data through a three-month moving average lens, we find around 68,000 jobs were added, which points to a more modest view of job creation but still one that isn’t going to spur the Fed to cut rates, especially given the growing number of signs pointing to renewed inflation pressures.
The latest one is from United Airlines (UAL) : “For tickets purchased on or after April 3, 2026, fees will go up by $10 for your first and second checked bag and by $50 for your third checked bag in most markets.”
We will say that Citigroup’s call for three 25-basis-point rate cuts this year puts it in the minority. A fresh look at the CME FedWatch Tool this morning reveals that, as of now, the market does not expect a rate cut until the Fed’s October 2027 meeting. Developments in the coming days and weeks will reshape those expectations, much like they already have compared to January’s call for two rate cuts in 2026. Another reason why we will follow the data and adjust our thinking as needed.
5. The Semiconductor Industry Association (SIA) today announced global semiconductor sales were $88.8 billion during the month of February 2026, an increase of 7.6% compared to the January 2026 total of $82.5 billion and 61.8% more than the February 2025 total of $54.9 billion… Strong global demand is expected to persist during the remainder of the year, with annual sales projected to reach roughly $1 trillion globally.” (SIA)
When we contemplate those year-over-year and sequential comparisons against commentary for PC, smartphone, and other connected device volumes, it’s evident the strength in chip demand is from AI and data center and related areas like networking. That supports the Portfolio’s positions in Nvidia (NVDA) , Marvell (MRVL) , Broadcom (AVGO) , and Arista Networks (ANET) .
6. Hon Hai Precision Industry Co. reported a 29.7% rise in quarterly sales, driven by sustained AI demand. Hon Hai expects sales to continue growing quarter-on-quarter and year-on-year, but warns of uncertainty due to the volatile global political and economic situation… Strong AI demand led to robust revenue growth for its cloud and networking products division. (Bloomberg)
More backing for our chip and networking comment above, and despite that uncertainty flag, the company sees top-line growth for the current quarter on both a year-over-year and sequential basis with ”AI racks maintaining a continued growth trend.”
Could some of that strength be due to Hon Hai customers pulling demand forward, given concerns about the U.S.-Iran conflict and potential supply chain issues? Possible given that its March revenue rose 45.6% year over year to T$803.7 billion, a record for that month. But that could also reflect the large swell in 2026 hyperscaler capex figures. We’ll have a clearer sense of any potential pull forward when Hon Hai reports its April revenue figures in early May.
7. Economic data today per TipRanks: ISM Services PMI (March).
8. Companies reporting today per TipRanks: While there are no market moving earnings reports expected, with Q1 2026 over, we will want to lookout for earnings pre-announcements.
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At the time of publication, the Portfolio was long ANET, AVGO, MRVL, and NVDA.
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