Stocks closed lower yesterday with all of the major indexes in the red. The Dow lost -1.16%, while the tech-heavy Nasdaq only gave up -0.31%.

Hostile rhetoric from Iran over the weekend turned into hostile action yesterday morning.

Early reports suggested Iran hit a U.S. Navy ship with two missiles. That was denied by the U.S. And no evidence suggests it was struck. But Iran did hit a UAE-linked vessel with Iranian drones. And they launched missiles at the country.

So while there was no attack on U.S. ships, the attack on other ships and Gulf States does constitute a breach of the ceasefire. It's unclear what that will mean going forward. But that injected additional tension into the Middle East conflict, and additional volatility into the market.

The reports of the attack came out shortly after President Trump said the U.S. would launch Project Freedom, which would guide ships safely out of the Strait of Hormuz.

Oil was up on the news and is back above $100 a barrel.

While oil sank last month after the announcement of the ceasefire, with the Strait remaining closed, and no immediate resolution ready for the near offing, oil has been trekking back up. And is coming close to the pre-ceasefire peak in early April.

But over the last couple of weeks the market has been focused on earnings season. And another better-than-expected showing has been sending stocks soaring.

After the close, we heard from Palantir. They posted a positive EPS surprise of 13.79%, and a positive sales surprise of 6.04%. That translated to a quarterly EPS growth rate of 153% vs. this time last year, and a sales growth of 84.4%. CEO Alex Karp wrote, "our financial results now demonstrate a level of strength that dwarfs the performance of essentially every software company in history at this scale." And they cited AI as the core driver of its growth. They were up 1.36% in the regular session before earnings. And up about 0.25% in after-hours trade following earnings.

We also heard from Pinterest. They posted a positive EPS surprise of 22.73%, and a positive sales surprise of 4.54%. That equated to a quarterly EPS growth rate of 17.4%, and a sales growth of 17.8%.They too cited AI for delivering outsized gains. And guided Q2 revenue up by 2.70% above the consensus (midpoint of $1.14B vs. the consensus for $1.11B). They were up 3.12% before earnings. And soared by more than 15% after earnings.

Today we'll hear from another 412 companies on deck to report including Advanced Micro Devices, Arista Networks, and Shopify to name a few.

In other news yesterday, Motor Vehicle Sales came in at 15.9 million units (annualized) vs. last month's 16.2M and views for 16.1M. North American-made sales came in at 12.2M vs. last month's 12.6M.

And Factory Orders rose 1.5% m/m vs. last month's 0.3% pace and estimates for 1.5%.

Today we'll get the PMI Composite Index, the ISM Services Index, New Home Sales, the International Trade in Goods & Services report, and the Job Openings and Labor Turnover Survey report (or JOLTS for short).

Middle East headlines could insert more volatility into the mix.

But stellar earnings so far have been propelling stocks higher. And we could see more of that as earnings season continues.

See you tomorrow,