Stocks closed higher again yesterday, but off their intraday highs.

Oil was up more than 3%.

The start of the release of U.S. Strategic Petroleum Reserves (SPR) should help smooth over any supply disruptions due to the effective Strait of Hormuz closure. But it's just a short-term solution. The longer-term solution, which will ultimately calm markets, is the reopening of the Strait, and resumption of normal transit.

But the Strait is only part of the problem. Iran launched a new wave of attacks on the UAE, targeting their energy infrastructure. And another tanker was hit near the Strait.

The U.S. has called for countries being impacted by the Strait's closure to assist in reopening the waterway, but numerous countries have declined. A few are debating it, but have not yet made any commitments.

Even though Iran's military capabilities have been severely degraded, they can still wreak havoc in the region, underscoring the difficulties in reopening the shipping channel.

Additionally, the U.S. Embassy in Baghdad is urging Americans to "leave Iraq now," as "Iran-aligned terrorist militia groups pose a significant threat to public safety in Iraq."

In other news, yesterday's Pending Home Sales Index was up 1.8% m/m vs. last month's -1.0% pace and views for the same. The Index came in at 72.1 vs. last month's 70.8.

Today we'll get MBA Mortgage Applications, Factory Orders, and the Atlanta Fed Business Inflation Expectations.

We'll also get another look at inflation with the Producer Price Index (PPI) wholesale inflation report. The headline number for February is expected to be up 0.3% m/m vs. January's 0.5% pace. The y/y rate last month came in at 2.9%. The core rate (ex-food & energy) is forecast at 0.3% m/m vs. last month's 0.8%. The y/y rate last month came in at 3.6%.

Retail inflation, per the Consumer Price Index (CPI) last week, put the core annual rate at 2.5% for February, in line with January.

And this afternoon we'll get the FOMC Announcement on rates. Virtually nobody is expecting the Fed to cut rates today (there's less than a 1% chance they do). The odds of a rate cut don't break 50% until October at the earliest (56.2%), with even better odds in December at 66.5%. Current Fed Chair Jerome Powell's term ends in May, and the new nominee, Kevin Warsh, is expected to push for cuts in the first couple of months he's at the helm. But rising energy prices and stubborn inflation have pushed out that timeline.

The FOMC Announcement comes out at 2:00 PM ET, followed by the Fed Chair Press Conference at 2:30.

Also of note today is Micron's earnings after the close. As AI inference workload continues to grow, memory will be a key component to making it all work seamlessly. So all eyes will be on Micron's earnings this afternoon.

After numerous bullish headlines already this week, another bullish piece of news could help reignite the AI trade that has recently been consolidating.

We'll also hear from Jabil, and non-AI related companies WilliamsSonoma, General Mills, and New Gold, to name a few.

Two up days in a row so far. We'll see if the markets can keep the streak alive and keep building on recent gains.

See you tomorrow,