New Quarter Begins as Markets Search for Direction 01/04/2026

HOT stories for today

Market wrap:

• US stocks surged Tuesday in a broad relief rally after reports suggested the Iran war could be nearing an end. The Dow Jones Industrial Average climbed more than 1,100 points, or about 2.5%, while the S&P 500 gained 2.9% and the Nasdaq Composite jumped 3.8%. It was the strongest daily performance for all three major indexes since May. The advance followed an unconfirmed report that Iranian President Masoud Pezeshkian was open to ending the conflict if guarantees were provided. Pezeshkian had struck a similar tone earlier this month, saying any resolution would require recognition of Iran’s rights, reparations and firm international assurances against future aggression.
•  Signs of easing tensions also supported sentiment. The Wall Street Journal reported that President Donald Trump told aides he was willing to end the war even if the Strait of Hormuz remained largely closed for now. The New York Post later reported that Trump believes the conflict could end soon and that other nations would take responsibility for the waterway. Still, some investors remain skeptical that the rebound will hold. Tuesday closed out a losing month and quarter for all three major benchmarks. As the second quarter begins, investors are turning to a fresh batch of catalysts, including earnings from Conagra, Lamb Weston and Cal-Maine Foods ahead of Wednesday’s open. Traders will also be watching February retail sales, March ADP private payrolls and the ISM manufacturing report for further clues on the strength of the economy.

Oil Shock Drives Biggest Monthly Jump on Record

• Global oil prices posted their biggest monthly surge on record in March, as conflict in the Middle East and disruptions in the Strait of Hormuz drove the sharpest energy shock since 2022. Brent crude settled at $118.35 on Tuesday, up 63.3% for the month, the largest monthly gain in data going back to 1988. West Texas Intermediate closed at $101.38, rising 51.3% in March for its biggest monthly advance since May 2020. The rally has been fueled by a war-driven supply shock that began with US and Israeli strikes on Iran in late February and has since spread across regional energy infrastructure and shipping lanes. The Strait of Hormuz, one of the world’s most critical oil chokepoints, remains only partially functional, raising the risk of further supply disruption.At the same time, signs emerged that Washington may be willing to accept a ceasefire even without fully reopening the strait. That possibility offered some support to broader risk sentiment, as investors bet a unilateral halt in hostilities could reduce the odds of worst-case damage to regional energy assets. 
• Still, oil above $100 a barrel remains a politically and economically sensitive threshold. Analysts warn that if Hormuz stays constrained and crude remains elevated, inflation risks could reemerge and weigh more heavily on demand and market sentiment. The effects are already rippling well beyond crude. Higher energy costs and shipping disruption have lifted prices across a range of commodities, including natural gas, fertilizer, corn, helium, sugar and aluminum, reinforcing the view that the oil shock is reshaping the broader commodities outlook for 2026 and beyond. For investors, the message is increasingly clear: this is no longer just an oil story, but a wider supply-chain and inflation shock with few areas of the global economy left untouched.

Stocks on the move:

• Nike (NKE): Shares slipped 2% after North America revenue came in at $5.03 billion, just below the $5.04 billion expected by analysts surveyed by LSEG. The company still topped overall fiscal third-quarter estimates, reporting earnings of 35 cents a share on revenue of $11.28 billion, ahead of forecasts for 28 cents and $11.24 billion.
• Dave & Buster’s Entertainment (PLAY): Shares rose about 1% after management said it expects growth in same-store sales, revenue and adjusted EBITDA in 2026. The company reported a fourth-quarter adjusted loss of 35 cents a share on revenue of $529.6 million, missing FactSet estimates for a profit of 39 cents and revenue of $555.9 million.
• PVH (PVH): Shares gained 1% after the owner of Tommy Hilfiger and Calvin Klein posted fourth-quarter adjusted earnings of $3.82 a share on revenue of $2.51 billion. Both figures topped FactSet estimates of $3.31 a share and $2.43 billion.
• RH (RH): Shares plunged 18% after the home-furnishings company projected full-year revenue growth of 4% to 8%, below Wall Street’s 8.8% estimate. Fourth-quarter adjusted earnings were $1.53 a share on revenue of $843 million, missing LSEG forecasts of $2.22 and $873 million.

Watchlist: XOM, COIN, NKE, PLAY, PVH, RH, MSFT, META, CAG

Key Economic Events Today:

EST time

08:15 am: USD ADP Non-Farm Employment Change
08:30 am: USD Core retail Sales, Retail Sales
09:05 am: USD FOMC Member Musalem Speaks
09:10 am: USD FOMC Member Barr Speaks
10:00 am: USD ISM Manufacturing PMI, Prices
10:00 am: USD Business Inventories
10:30 am: USD Crude Oil Inventories



Earnings

BMO (Before Market Open): ConAgra Brands (CAG), Lamb Weston (LW), MSC Industrial Direct (MSM), Unifirst Corp. (UNF), Novagold (NG)

AMC (After Market Close): Pengiun Solution (PENG)



The TEFS Analyst team wishes you a successful day!