U.S. stock futures pointed lower ahead of Monday's trading session on April 13. At the time of writing, Dow Jones futures were down 0.90%, S&P 500 futures fell 0.66%, and Nasdaq futures declined by 0.66%.
Major European indices also traded lower. Germany's DAX index dropped 1.35%, the UK's FTSE 100 fell 0.58%, France's CAC 40 declined 1.09%, and the Euro Stoxx 50 was down 1.15%.
Oil prices surged significantly. WTI crude rose 7.80% to $104.10 per barrel, while Brent crude increased 7.39% to $102.24 per barrel.
Market sentiment was influenced by escalating tensions in the Strait of Hormuz. Following unsuccessful negotiations between the U.S. and Iran, former President Donald Trump announced on social media that the U.S. Navy would begin intercepting vessels entering or leaving Iranian ports through the strategic waterway. The U.S. Central Command stated it would implement a maritime blockade on all traffic to and from Iranian ports starting at 10:00 AM ET on April 13.
Iran's Armed Forces responded through a spokesperson from the Khatam al-Anbiya Central Headquarters, stating that Iran would firmly implement a "permanent mechanism to control the Strait of Hormuz" due to ongoing threats to national security. The spokesperson added that enemy vessels are not permitted to pass through the strait now or in the future, while other ships may continue transit subject to regulations set by Iranian forces. Additionally, recent reports cited Israeli Prime Minister Benjamin Netanyahu suggesting a ceasefire with Iran could end soon. Traders are closely monitoring developments in the Middle East.
Amid these geopolitical tensions, the U.S. first-quarter earnings season begins this week. Investors will be looking for evidence regarding the health of corporate profit engines, particularly among Wall Street's major banks—which hold significant weight in the S&P 500—large technology giants linked to AI, and major retailers. Wall Street analysts generally expect S&P 500 earnings to grow about 14% year-over-year for the first quarter, marking a potential sixth consecutive quarter of double-digit growth. Full-year 2026 earnings growth expectations have been revised upward from around 15% in late February to over 19%. Investors are also watching whether the Middle East conflict and resulting surge in energy costs pose a substantial threat to this optimistic earnings outlook. Many institutions believe that forward-looking guidance and management commentary will be more important than reported earnings figures this quarter.
Morgan Stanley strategists suggested that accelerating corporate earnings growth is shielding the S&P 500 from deeper declines and masking a broader market correction. A team led by Michael Wilson noted that strong earnings and a sustained economic recovery have limited the index's decline to less than 10% since its January peak. They indicated evidence that the stock market is in the "final stages" of a correction, with better metrics available to assess the pullback—the S&P 500's expected EPS has fallen 18% since last October's high, and more than half of the stocks in the Russell 3000 have declined at least 20%. Wilson stated, "In our view, this is not market complacency, but a market that has appropriately and precisely priced in risks at both the index and individual stock levels." He added that risks from private credit and AI disruption have also been absorbed. The strategists advised investors to prepare to increase risk exposure, even as Middle East tensions introduce uncertainty into energy supplies and monetary policy.
In a significant technical development, Goldman Sachs analysis by Neil Sethi of Sethi Associates indicated that commodity trading advisors (CTAs) are expected to purchase approximately $45 billion in U.S. equities this week, with about $34 billion concentrated in the S&P 500. This would represent the second-largest buying spree on record. The shift reflects a change in systematic positioning from net sellers accumulated early in the first quarter to net buyers.
Oil price risks remain tilted to the upside. Jorge Montepeque, Managing Director at Onyx Capital Group, warned that crude prices could surge to $150 per barrel if the U.S. proceeds with a maritime blockade of the Strait of Hormuz. He suggested such action could turn a regional conflict into a global one, potentially reducing daily oil supply by up to 12 million barrels. Goldman Sachs added that if the strait remains closed for another month, Brent crude could average above $100 per barrel for all of 2026. Should the closure persist longer and affect production in some regions, price forecasts could be raised further, with Brent potentially averaging $120 in the third quarter and around $115 in the fourth. JPMorgan indicated that if shipping through the strait does not fully resume until July, international oil prices could surge again, retesting recent peaks near $120 per barrel seen during U.S.-Iran tensions.
On the gold front, Union Bancaire Privée has resumed buying gold after previously reducing exposure amid price declines triggered by Middle East tensions. The Swiss private bank is gradually reintegrating gold into its discretionary client portfolios, raising its allocation from about 3% back to approximately 6%. Paras Gupta, Head of Asian Discretionary Portfolio Management at the bank, reiterated a year-end gold price target of $6,000 per ounce, citing structural demand drivers including central bank purchases, fiscal deficit concerns, and geopolitical tensions.
In corporate news, Goldman Sachs (GS) reported better-than-expected first-quarter results, with revenue reaching $17.23 billion, up 14% year-over-year and $300 million above estimates. Net income rose to $5.63 billion, while earnings per share came in at $17.55, up 24% and $1.16 above expectations. Net interest income increased 23% to $3.56 billion. Revenue from investment banking and markets hit a record $12.74 billion. The firm did not provide formal guidance. Shares of Goldman Sachs fell more than 3% in premarket trading Monday.
Apple (AAPL) is testing four designs for its AI-powered smart glasses to compete with Meta (META), with plans to bring some or all designs to market. The prototypes include large rectangular frames similar to Ray-Ban Wayfarers, a slender rectangular design akin to glasses worn by Apple CEO Tim Cook, larger oval or round frames, and smaller, refined oval or round styles. Apple aims to differentiate its product through deep integration with the iPhone and superior manufacturing. The glasses, internally coded N50, are targeted for a 2027 release following a potential late 2026 or early 2027 unveiling.
Tesla (TSLA) faces significant bearish sentiment, with Gordon Johnson, Founder and CEO of GLJ Research, predicting further declines for the stock—which has already fallen 25% this year—reiterating a $25 price target, nearly 93% below Friday's close. Johnson's pessimism is based on Tesla's forward P/E of about 175x, which he views as unsustainable given current performance. He noted that Tesla's premium valuation has long been supported by CEO Elon Musk's ambitious, yet often unrealized, product promises, which are frequently priced into the stock prematurely.
Environmental services firm GFL Environmental (GFL) is reportedly near a deal to acquire Canada's Secure Waste Infrastructure Corp. for over C$6 billion (approximately $4.33 billion), including debt. The acquisition would expand GFL's footprint in Western Canada and extend its industrial and energy-related waste services. Under CEO Patrick Dovigi, GFL has grown aggressively via acquisitions, tripling its market value over the past six years. Secure derives most of its profits from waste management, with the remainder linked to energy infrastructure such as pipelines and storage tanks. GFL shares fell more than 2% in premarket trading.
Key economic data and events scheduled for release include U.S. existing home sales for March, due at 22:00 Beijing time.
Upcoming earnings reports on Tuesday include premarket results from JPMorgan Chase (JPM), Johnson & Johnson (JNJ), Wells Fargo (WFC), Citigroup (C), and BlackRock (BLK).
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