Stocks closed mixed yesterday with the big three indexes (Dow, S&P 500 and Nasdaq) ending modestly lower, while the small-cap Russell 2000 and mid-cap S&P 400 added 0.58% and 0.61% respectively, and hitting new all-time highs in the process.

After weeks of optimism for a longer-lasting peace deal, following the ongoing ceasefire, and the recent declarations by both the U.S. and Iran saying the Strait of Hormuz was open, that was thrown for a loop over the weekend when Iran's Revolutionary Guard Corps (IRGC) said the Strait was closed and under their control ? and firing on a ship and turning several others around.

Over the weekend, President Trump called Iran's recent actions a breach of the ceasefire agreement and said if they don't agree to a peace deal, the U.S. will resume bombing.

In the meantime, the U.S. seized an Iranian-flagged cargo ship near the Strait.

Peace talks were tentatively scheduled for yesterday in Islamabad. But those failed to materialize. And so far, in light of recent developments, Iran has not committed to a future date.

In other news, Fed Chair nominee, Kevin Warsh, will testify in front of the Senate today for his confirmation hearing to replace outgoing Fed Chair Jerome Powell when his term ends on May 15.

Mr. Warsh, in his prepared remarks for today, is expected to say that the current time "will rank among the most consequential in our nation's history," and that he believes a "reform-oriented Federal Reserve can make a real difference."

The market was/is expecting him to be a strong advocate for lowering rates.

The Fed, per their latest SEP (Summary of Economic Projections), is still calling for one 25-basis point rate cut this year, and another next year. But the Fed has insisted all along they will remain data dependent. And the latest data has suggested it might end up happening later rather than sooner. But we'll have to see.

In other news, it was announced that Apple CEO Tim Cook will be stepping down, and transitioning to his new role as Executive Chairman of the Board of Directors. The current Board unanimously approved Senior Vice President of Hardware Engineering, John Temus, to be his successor come September 1, 2026.

Apple expects to release its latest iPhone in September of this year. It's expected to be heavily AI-centric. And is being touted as a major upgrade, and one that could bring those who have skipped recent model upgrades to make the switch with this release.

Earnings season kicks into gear with another 491 companies set to report this week, and another 841 stocks on deck to report next week, with 5 of the Magnificent 7 stocks reporting in the coming days.

Middle East headlines will continue to influence the market. But it's good to remember that geopolitical conflicts and events usually only have a short-term impact on the markets. And that over the last 40 years of geopolitical shocks, markets usually bounce back quite fast. And we literally just witnessed that play out again over the last few weeks.

But the recent surge in equities goes far beyond hopes for a permanent de-escalation. That includes the resiliency of the economy, surging productivity, the expectation for eventually lower interest rates, double-digit earnings growth not only for this earnings season, but also for the next 3 quarters out, and of course, the ongoing AI boom.

So there's plenty to be excited about.

See you tomorrow,