Wall Street Near All-Time Highs, Optimistic on War

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead.

0:17I'm Keith Lansford, and here is Schwab's early look at the markets for Wednesday, April 15th. Earnings roll on today as Bank of America and Morgan Stanley step to the plate, along with chip industry equipment maker ASML. Results from several large banks Tuesday gave a mixed picture, while investors monitored tidings from the Middle East and pondered Tuesday's lighter-than-expected inflation data. Major indexes opened near all-time highs after another rally Tuesday on hopes for more peace talks that President Trump said could be announced soon. In another lift, Vice President Vance reported a lot of progress from weekend talks with Iran, though the two sides remain far apart on issues like uranium enrichment, media reports said.

1:07Traffic through the Strait of Hormuz remained virtually halted as of late Tuesday, but crude oil prices fell sharply to near$92 per barrel, giving stocks a boost. Tuesday's March Producer Price Index, or PPI, monitors what those businesses pay at the wholesale level and presented a distinct contrast to last week's hot headline Consumer Price Index, or CPI. March PPI rose 0.5 percent for headline and 0.1 percent for core, well below the consensus of 1.2 percent headline and 0.4 percent core, which excludes food and energy. The March PPI report was tame compared to last week's CPI release, said Colin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research.

1:54With so much uncertainty around the outlook on the conflict in the Middle East, This report shouldn't change the timing of the next move by the Fed. We continue to expect the Fed to hold rates steady for several meetings. On an annual basis, core PPI rose 3.8 percent unchanged from February, while headline PPI rose 4 percent, up from 3.4 percent in February. Energy was the key driver, as expected, Martin said. The report is positive if viewed in a vacuum, but the CPI report suggests that inflationary pressures are still very much present for consumers. Last week's March CPI showed a sharp monthly increase in the headline number, driven by an 18 % rise in the price of gasoline from February.

2:43Future PPI figures will likely be watched closely in coming months if oil stays elevated because wholesale prices measured by PPI have a history of leaking into consumer prices over time. It's also possible the report doesn't reflect the full impact of higher oil prices in March and that April's report might provide more clarity on costs companies face. Also, some of the PPI components feeding into the Federal Reserve's favorite inflation metric, the Personal Consumption Expenditures, or PCE, price index climbed moderately to sharply last month. These include airfares and hospital outpatient care, both up from February.

3:24Inpatient care and nursing home care fell month over month, however. Stay tuned late tonight, U.S. time for updated economic data from China, including a reading on first-quarter gross domestic product or GDP growth. Consensus is for a reading of 4.8 percent, up from the prior 4.5 percent, but still below the long-term growth rate of 5 percent. Industrial production is also seen growing less quickly than it did previously.

3:55Earnings from big banks today will likely be checked for net interest income after JPMorgan Chase cut its net interest income forecast yesterday. Net interest income measures the money banks make lending minus what they pay to customers. Bank of America guided for 7 % net interest income growth year over year in the first quarter. Loan loss provisions also could be tracked closely after two banks raised provisions yesterday. If banks sharply increase their loan loss provisions in the first quarter, which they tend to do when they're afraid of a rise in defaults, it could be evidence they're preparing for an economic slowdown.

4:35This can weigh on earnings growth. However, JPMorgan Chase set aside less for loan losses than analysts had expected. ASML, which makes tools required to manufacture advanced chips, enjoyed a solid share price rally early this year, and its earnings today could be monitored for order trends measured by bookings. That reading topped analyst estimates last time, and another beat might reassure investors that AI chip demand hasn't diminished. However, the company's last 2026 revenue guidance was very wide, so investors might check if that narrowed to something more clear. over the last quarter. Transport's rumble into view later today when J.B.

5:19Hunt Transport Services reports, giving investors a direct look at the impact of spiking diesel prices on business. And chips take the stage again tomorrow morning with earnings from Taiwan Semiconductor Manufacturing, which last week reported solid annual first-quarter revenue gains of more than 35%. Don't discount that revenue report from TSM when considering the recent strength in chip stocks, as it's a bellwether for the industry. So is ASML, for that matter. Another earnings report to watch is Netflix after tomorrow's close. Shares have rallied since the company failed in its attempt to buy Paramount Skydance earlier this year, and this will be the first company earnings since that bid fell through.

6:04In its last earnings report, Netflix impressed with subscribership and ad revenue, two metrics to watch tomorrow. As of late Tuesday, odds of a rate pause at this month's Fed meeting were near 100%, which would make April the third straight meeting to keep the target range between 3.5 % and 3.75%. Chances of any rate cut this year stood near 1 in 3 by late Tuesday, with the market pricing in little chance of a hike anytime in 2026, according to the CME FedWatch tool. In other Fed-related news, the Senate Banking Committee will hold a confirmation hearing next week for Kevin Warsh, President Trump's nominee to succeed Fed Chairman Jerome Powell, Bloomberg reported Tuesday.

6:51Later today, the Fed releases its Beige Book, providing a ground-level view of the U.S. economy drawn from all 12 Fed districts. The release, due at 2 p.m. Eastern Time, could give investors a sense of how the war and rise in oil prices are affecting businesses surveyed by the Fed over the last few weeks. Though investors should remember, these anecdotes can be misleading and should be scrutinized for recurring themes. Treasury yields fell Tuesday as crude sank, though the 10-year yield remains well above recent lows. The 10-year yield is likely to continue trading in its longer-term range between 4 % and 4.5%.

7:32It slipped four basis points to 4.26 % yesterday. In trading Tuesday, major indexes continued their April advance, though conviction might be questioned as volume at the New York Stock Exchange stayed on the light side. NASDAQ volume exceeded the average through midday. Advancers outpaced decliners by an impressive 4-1 at Nasdaq through midday. For the second day in a row, tech and small-cap stocks led the way, and the Nasdaq composite is up 10 sessions in a row. That's the longest win streak since 2021. Though stocks are back above pre-war levels and crude is down from peaks, investors shouldn't be sanguine about the war's impact on the world economy.

8:19The economic fallout from the war is yet to come, said Michelle Gibley, director of international equity research at the Schwab Center for Financial Research. Reinforcing that view, the International Monetary Fund, or IMF, said Tuesday that the war will slow global economic growth, adding that the outlook has abruptly darkened and that the war interrupted what had been a steady growth trajectory. Eight of 11 S &P 500 sectors rose Tuesday with only materials and energy in the red. Cyclical sectors that tend to perform well in a growing economy performed best, with communication services up a dramatic 3 % on strength from leaders, meta-platforms and Alphabet, and discretionary and infotech advancing 2.5 % and 1.7 % respectively.

9:10Checking individual movers Tuesday, JPMorgan Chase fell 0.3 percent. Earnings per share and revenue beat expectations, but investors seemed disappointed in the firm's net interest income forecast. The U.S. economy remains resilient in the quarter, with consumers still earning and spending and businesses still healthy, CEO Jamie Dimon said in the earnings release. At the same time, there is an increasingly complex set of risks. In the company's earnings call, Diamond, whose economic observations often influence investors, said he doesn't see systemic risk from the recent private credit issues and that consumer spending is strong based on the company's credit card data.

9:56Wells Fargo sank around 5 % as the bank beat Wall Street's earnings per share consensus but lagged on revenue. The company reaffirmed its net interest income guidance and slightly raised its provision for credit losses. BlackRock climbed 3.6 percent after earnings beat analysts' consensus, while Citigroup added 2.6 percent following earnings and revenue that topped estimates marked by solid trading growth during the quarter. Provisions for credit losses rose slightly. United Airlines climbed 2 percent, with CNBC citing reports that the company was making a pitch to buy competitor American Airlines.

10:36Shares of American Airlines rose nearly 8 percent. Delta also rose sharply, up more than 6 percent, as all airlines seemed lifted by hopes for peace. Consumer names, including automobile makers, cruise lines, restaurants, and some retailers, enjoyed firm gains Tuesday. The PHLX Semiconductor Index chipped in another new all-time high, fueled in part by NVIDIA's 3.8 % gains. Shares of NVIDIA approached their late February high, which is just below$198, but remain below last fall's peak of$212. Globalstar climbed 9 % on a CNBC report that Amazon plans to buy the telecom infrastructure provider to boost its satellite business.

11:26Tesla rose 3.3 % after an upgrade from UBS. Novo Nordisk rose 3 % on news it will partner with OpenAI to accelerate drug discovery. Energy shares took a collective tumble Tuesday as crude oil prices fell, and precious metals climbed Tuesday with copper futures back above$6 a pound.

11:52The Dow Jones Industrial Average gained 317.74 points Tuesday, or 0.66%, to 48 ,535.99. The S &P 500 Index climbed 81.14 points, or 1.18%, to 6 ,967.38. and the Nasdaq Composite added 455.35 points, or 1.96%, to 23 ,639.08. The S &P 500 is within shouting distance of its all-time high close of just below 6 ,979 posted January 27th. This could be a level to watch today. This has been the Schwab Market Update Podcast. To stay informed, visit www.schwab.com slash market update or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review.

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