Stocks closed lower yesterday with the Nasdaq giving up -0.89% and the S&P 500 shedding -0.41%.

The markets have been on a tear over the last several weeks, so there was bound to be a pause and some profit taking somewhere.

Despite the fragility of the ceasefire, and accusations from both sides that the other has breached it, the ceasefire remains.

Additionally, after the close, it was announced that the Israel-Lebanon ceasefire, a condition that Iran wanted in order to open the Strait of Hormuz, was extended for another 3 weeks.

At the moment, peace talks are stalled. Iran has fired on, and apparently boarded, merchant vessels in the Strait. The U.S. has stopped and boarded Iranian vessels. And the U.S. is keeping its blockade in place.

Regardless, the bombing has stopped on all sides, even if the escalatory rhetoric has not.

And that has helped lift stocks.

But the gains go beyond the Middle East ceasefire. That includes the resilient economy, better-than-expected inflation numbers, surging productivity, and an ongoing (and accelerating?) AI boom. And of course, another excellent earnings season so far.

Before the open yesterday, Union Pacific posted a positive EPS surprise of 2.81%, and a positive sales surprise of 0.14%. That translated to a quarterly EPS growth rate of 8.5% vs. this time last year, and a sales growth of 3.15%, while reaffirming their outlook. They were up 8.77% yesterday.

After the close, we heard from Intel. They posted a positive EPS surprise of 2,800%, and a positive sales surprise of 10.09%. That equated to a quarterly EPS growth rate of 123%, and a sales growth of 7.18%. Data center and AI-driven CPU demand has surged. CEO Lip-Bu Tan said the shift from foundational models to inference and agentic workloads "significantly increases the need for Intel's CPUs and advanced packaging." On that, they upped forward guidance for Q2 by 9.41% above the consensus on revs, and 122% higher on earnings (expecting 20 cents vs. estimate for 9 cents). They were up 2.31% in the regular session before earnings, and soared by more than 19% in after-hours trade following earnings.

Earnings season continues with another 58 companies on deck to report today, including Procter & Gamble, Southern Copper and HCA Healthcare to name a few.

Next week heats up even more with 901 companies in queue to report, including Verizon and Celestica on Monday; Visa and Coca-Cola on Tuesday; Alphabet, Microsoft, Amazon and Meta on Wednesday; Apple and Eli Lilly on Thursday; and Berkshire Hathaway and Exxon Mobile on Friday. Lots of marquee names ready to report next week, including 5 of the Magnificent 7 stocks.

In other news yesterday, Weekly Jobless Claims rose 6,000 to 214,000 vs. the consensus for 210,000.

And the PMI Composite Index rose to 52.0 vs. last month's 50.3 and views for 50.5. The Manufacturing Index came in at 54.0 vs. last month's 52.3 and estimates for 52.5. And the Services Index was at 51.3 vs. last month's 49.8 and forecast for 50.0.

Today we'll get the Baker Hughes Rig Count report, and the Consumer Sentiment Report. (Always an important gauge given that roughly 70% of GDP comes from consumer spending, and a happy and confident consumer is generally one that spends.)

With one more day to go, all of the indexes are on pace to close slightly lower for the week.

But the markets are all siting near record highs. And I'm expecting a lot more upside to go for all of them by year's end.

Best,