S&P 500 futures are up 1.0% Tuesday morning — the best pre-market read in more than two weeks — after the Wall Street Journal reported late Monday that President Trump told aides he is willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed.^[2] Nasdaq 100 futures are up 1.1%. WTI is retreating slightly from Monday's close, back to ~$102.30.^[5]

What's driving it

The overnight catalyst is a single strategic shift in U.S. posture. The WSJ reported Monday evening — confirmed by White House Press Secretary Karoline Leavitt — that reopening the Strait of Hormuz is no longer a stated "core objective" of Trump's Iran operation.^[2] That lowers the bar for a deal and reduces the probability that the April 6 deadline ends in escalation. Trump simultaneously extended his pause on striking Iranian energy plants to April 6, citing "productive" talks and citing a request from the Iranian government.^[4] Pakistan is reportedly mediating.

The pivot is meaningful because the market has been pricing the Strait as an unsolvable binary — either Iran capitulates completely or oil stays above $100 indefinitely. A framework where shipping resumes on some partial or phased basis, even without full Iranian compliance, opens a path for crude to retrace. That is the bull case the equity market is pricing this morning.

The tension in the read: overnight, Iranian forces struck a Kuwaiti VLCC anchored at Dubai's port, and fresh airstrikes hit Qeshm Island desalination infrastructure.^[3] Trump posted to Truth Social early Tuesday demanding the UK go to the Strait and "just TAKE IT." Secretary of State Rubio told Al Jazeera the Strait will reopen "one way or another." The VIX falling 8% on a morning that includes active military strikes illustrates how aggressively markets are leaning into the diplomatic signal over the kinetic reality.

Brent closed Monday at $112.78 — a 55% monthly surge, the largest on record for the contract since its 1988 inception — and the IEA warned the disruption represents a "major threat" to the global economy worse than the 1970s oil shocks.^[5][3] The Russell 2000 leading the tape at +1.5% reflects a market read that near-term resolution reduces Fed rate-hike probability, which has pulled back to roughly 20% from 35% at end of last week.^[1]

On the calendar

Conference Board Consumer Confidence — 10:00 AM ET. The March reading releases this morning. February printed 91.2. The Expectations sub-index has been below 80 — the traditional recession-warning threshold — for more than 13 consecutive months. March surveys captured the full effect of $4-per-gallon national average gasoline and a labor market that showed a surprise payroll drop in February. A reading meaningfully below 85 would reinforce the stagflation narrative and complicate any equity rally.^[13][12]

Chicago Business Barometer (Chicago PMI) — 9:45 AM ET. Published this morning. March reading came in at 52.80, down from 57.70 in February — still in expansion territory but decelerating. The result extends what has been an unusually strong run for the Chicago index after 25 consecutive months of contraction through late 2025.^[17]

ISM Manufacturing PMI — releases tomorrow, Wednesday April 1, 10:00 AM ET. February printed 52.4 — the second straight month of expansion. Consensus expects modest softening in March as energy-cost pass-through and supply-chain disruption from the Hormuz closure weigh on new orders and production. Price sub-indexes are the key watch given the oil-driven inflation backdrop.^[18]

Nike (NKE) — earnings after the bell. See below.

Good Friday note: Nonfarm Payrolls release Friday, April 3, when equity markets are closed. The jobs number trades on reopening Monday. Worth flagging in positioning decisions made today.

Movers

Apellis Pharmaceuticals (APLS) +140%. Biogen announced pre-market it will acquire Apellis for $41 per share in cash — an 86% premium to Apellis's 90-day VWAP and a 35% premium to its 52-week high — plus a contingent value right worth up to $4 per share contingent on Syfovre sales milestones.^[6] Total deal value approximately $5.6 billion. Biogen acquires Syfovre (a leading treatment for geographic atrophy, the advanced form of dry AMD) and Empaveli (approved in two rare kidney diseases and a rare blood disorder). The acquired products generated $689 million in combined 2025 revenue, with Biogen projecting mid-to-high teens growth through 2028. Deal expected to close Q2 2026.^[7] Biogen shares are down roughly 2% pre-market on deal premium and financing concerns.

McCormick (MKC) +3% pre-market. A double event this morning: McCormick reported Q1 fiscal 2026 earnings before the bell — revenue $1.87 billion vs. consensus $1.79 billion (a 4.8% beat), adjusted EPS $0.66 vs. consensus $0.59 (a 10.9% beat) — and simultaneously announced a landmark combination with Unilever's global Foods business.^[15][16] The top-line beat included a 12.4-percentage-point tailwind from the January 2026 McCormick de Mexico acquisition and 3.1% from favorable currency; organic growth was a narrower 1.2%. Management reaffirmed full-year adjusted EPS guidance of $3.05–$3.13. On the deal: McCormick and Unilever are combining McCormick with Unilever's global Foods business (excluding India) in a Reverse Morris Trust structure. McCormick shareholders retain a 35% stake; Unilever shareholders receive 65% of the combined entity plus $15.7 billion in cash upfront.^[8] The combined business would have had ~$20 billion in revenue in 2025, adding brands including Hellmann's, Knorr, and Magnum. McCormick will maintain its Hunt Valley, Maryland headquarters and add an international headquarters in the Netherlands. Unilever plans to direct its $15.7 billion cash proceeds toward debt paydown and up to €6 billion in share buybacks.^[9] Deal expected to close mid-2027, pending regulatory approval. The muted +3% pre-market move on a strong-beat earnings report plus a $20 billion revenue merger reflects structural uncertainty in megamerger execution and Reverse Morris Trust tax-structure complexity.

Earnings on deck

Nike (NKE) — reports after the bell today (approximately 4:15 PM ET / 1:15 PM PT), with a conference call at 2:00 PM PT.^[10]

Wall Street consensus: revenue $11.23 billion (flat year-over-year), EPS $0.28 (down ~48% from $0.54 a year ago), operating income ~$512 million (down ~31% year-over-year).^[11] The low EPS bar reflects accelerated wholesale reset costs, Nike Direct decline, and ongoing China weakness. In Q2, Nike beat — EPS $0.53 on $12.4B revenue — but that was a stronger quarter structurally.

Three things drive the stock reaction tonight: (1) the pace of North America wholesale recovery, which showed 8% growth in Q2; (2) the depth of the China decline, where discretionary spending has been pressured by both domestic deceleration and Middle East-related shipping disruption; and (3) guidance language from CEO Elliott Hill on how the turnaround timeline is tracking relative to the FY2027 target of ~$48.6 billion in revenue and ~$2.37 in EPS. NKE is up 1.3% pre-market ahead of tonight's print — the stock has lost roughly 60% of its value over the past five years and trades near nine-year lows.

The setup

The session hinges on whether the diplomatic signal holds. If Conference Board confidence comes in materially weaker than 85, it undercuts the equity rally by reinforcing the stagflation framing Powell will eventually have to address. If oil continues to drift lower on the ceasefire-signal narrative, the rate-hike probability repricing that is lifting small caps this morning has more room to run. Nike tonight is the closing event — a guide-down on FY2027 targets would add a consumer discretionary drag to a tape already dealing with macro headwinds. Six days remain on the April 6 countdown.