EB Daily Market Report - Wednesday, April 8, 2026
Executive Summary
- Futures exploded higher overnight after the U.S. and Iran agreed to a 2-week ceasefire
- Traders were unable to move stocks higher after the opening bell, however
- Crude oil prices ($WTIC, -16.34%) fell swiftly on the ceasefire agreement
- Energy (XLE, -4.27%) is the only sector in negative territory, tumbling on the lower crude
- Meanwhile, industrials (XLI, +3.58%) and technology (XLK, +2.85%) lead the other 10 sectors higher
- Many industries in technology are jumping 4-6%, though software ($DJUSSW, -0.36%) are a notable laggard once again
- Cryptocurrencies are rising as bitcoin ($BTCUSD, +3.82%) is back above 71000, though still shy of key 75000 resistance
- Gold ($GOLD, +1.21%) and silver ($SILVER, +3.23%) are up along with most other commodities
- The 10-year treasury yield ($TNX) is down 5 basis points to 4.29% on the ceasefire, though it was down twice that earlier in the session
- Key semiconductor stocks like Teradyne (TER, +10.71%) and Sandisk (SNDK, +10.58%) are leading the S&P 500's rally today
- Finally, Delta Air Lines Inc. (DAL, +4.53%) is up after its latest quarterly earnings report, though it's well off its earlier high
Market Outlook
After the close yesterday, everything seemed to change. Or did it? Yes, the U.S. and Iran agreed to a 2-week ceasefire to work on a resolution to the war, but this is not set in stone. It will remain a volatile environment for the foreseeable future. The 2.5%-3.5% gap higher this morning in key indices lessens the sting for many portfolios, which is good, but it does not change the fact that many issues need to be resolved over the days, weeks, and months to come. Nothing has been resolved just yet.
So how do we approach the market now from this higher level? Well, not much has changed in mind. I will continue to monitor how the market trades during the day. The gap higher is nice, but if it's not also accompanied by intraday rotation into aggressive areas of the market, then the upside, at this point in time, should be questioned.
I updated the intraday XLY vs. XLP ratio that I post in every Weekly Market Report on Mondays, based on where we stood as of 2:00pm ET, just as the minutes of the last Fed meeting were released. This is what this key ratio looked like:
It's nice to see the blue circle on the right side of the bottom panel. That shows the S&P 500 rallying nicely today. However, the blue circle in the top panel that coincides is showing a drop. In other words, since the opening bell today, money has rotated away from the XLY and into the XLP. That doesn't exactly provide bullish confirmation of the price action.
Bottom line, the move higher is good news, but we still have plenty of challenges ahead.
Sectors/Industries
You can get a sense of what lower interest rates will do in time. Simply take a look at today's large gap down in the 10-year treasury yield ($TNX) and how home construction stocks ($DJUSHB) responded:
Eventually, I see home construction stocks doing very well as interest rates retreat. Do we see the DJUSHB head a bit lower first? Yes, it's certainly possible. But accumulating this group at current prices or on any further decline will likely result in a profitable investment, especially later this year and/or into 2027 - all in my humble opinion, of course.
ChartLists and Trading Strategies
It's very difficult to chase a move like this that's essentially a gap higher. There's been no follow through at all thus far. Small caps do show some relative strength, so perhaps keying in on stocks in that asset class makes some sense. Also, semiconductors ($DJUSSC) remain very hot and many component stocks are nearing or setting new all-time highs today. Riding that momentum makes sense, just understand the risk present as well.
Upcoming Earnings
Our Upcoming Earnings ChartLists and Upcoming Earnings Relative Strength ChartList will be updated and included on our website next week when Q1 earnings reports kick off.
Economic Reports
Fed minutes released at 2:00pm ET
Happy trading!
Tom