In this April 7, 2026 morning market briefing, host Kenny Polcari blends geopolitical analysis, economic data, and market commentary to assess whether an imminent “11th‑hour” diplomatic deal between the United States and Iran will stabilize markets. He outlines the latest U.S. strike on Karg Island, Iran’s 10‑point peace proposal, and the potential impact on oil shipping through the Strait of Hormuz. Polcari then reviews key U.S. economic releases – the ISM Services PMI (54) versus the global S&P Services PMI (49.4), a sharp rise in the ISM prices‑paid component, durable‑goods expectations, and New York Fed 1‑year inflation expectations (3.5%). He translates these figures into sector‑level performance (consumer staples +1%, discretionary +0.8% but down 8.7% YTD, energy +0.7%, etc.), bond market moves (10‑yr yield 4.32%, 30‑yr 4.88%, TLT/TLH down 0.1%), and commodity pricing (oil $114.60, gold $4,665). The VIX sits at 25.40, reflecting heightened volatility tied to the diplomatic outcome. Polcari argues the market is more likely to see an 11th‑hour deal, which would pull back oil and gold premiums and cause the VIX to fall, while a no‑deal scenario would keep volatility high and equities pressured. He advises investors to stay disciplined, avoid emotional decisions, and look for mis‑priced large‑cap stocks during the geopolitical “noise”. The briefing ends with a personal segment sharing a recipe for “Miss Amy’s shrimp and artichokes”.
Chapters
Well, good morning. Yes, it's me, Kenny Polcari, your host of the party, and today is Tuesday, April 7th, 2026, and here are the things you need to know to get your day started. Well, the geopolitical tensions continue to dominate the headlines. Stocks did advance yesterday, but this morning they look a little bit nervous. 8 PM is now only 11 hours away, and the ISM remains in the expansion zone, but prices paid does signal caution ahead. And what are we having dinner tonight? Well, it's an appetizer. We're having Miss Amy's shrimp and artichokes, and trust me, it is delicious. All right, so good morning America! Wake up and strap in because once again the market is trying to separate the noise from the news. Now stocks did manage to grind higher yesterday, but let's be clear, it was not a risk-on rally. At the end of the day, here's what it looked like. The Dow gained 165 points, the S&P gained 30 points. The NASDAQ advanced by 117. The Russell was up 10. The transports added 208 points. The equal-weighted S&P advanced by 33 points, while the Mag 7 added 85 points. Now, it was a cautious advance as investors tried to balance hope for diplomacy in the Middle East against the possibility that the next headline is going to show blown-up bridges and power plants and roads and everything else. Overnight, it is confirmed that the US hit military targets on Karg Island, right, in a move to get Tehran to come to the table and quickly. At the same time, Tehran presented a 10-piece— 10-point peace plan and is demanding a permanent end to hostilities and broader concessions that include, but not limited to, guarantees that Iran will not be attacked again. Right, by Israel and the US, uh, and that Israel will not attack Hezbollah in Lebanon, which is a terrorist organization. That's interesting. And they want to lift all sanctions. They also propose that every ship that passes through the strait is now going to be charged $2 million that they will split with Oman as compensation for the reconstruction. So the question investors are asking this morning is simple: do we get an 11th-hour agreement or don't we? Right now, the signals suggest that a deal is still possible. I'm in the camp that there will be an 11th-hour deal. Not perfect, but something that satisfied both sides for now, allowing for ongoing negotiations. Right now, let's get back to the markets. Yesterday's economic data featured what? The ISM Services PMI. We talked about it. It came in at 54, slightly below expectations, but still firmly in expansion territory. Remember, anything above 50 is growth, right? Signals growth. And since we're a 75% services economy, this remains an important data point for you to understand. And it matters because it stands in sharp contrast to last week's S&P Services PMI, right? Global Services PMI, which came in below 50 at 49.4, suggesting contraction in the services sector. So the question is Which one do you believe, right? Which one are you gonna focus on? Which one is gonna make you feel good? Well, historically, investors tend to put more weight in the ISM survey, largely because it has a longer track record and it's a deeper survey base that's based here in the United States. And if the ISM read is correct, then the largest part of the US economy is still expanding, even as the geopolitical noise and rising energy prices continue to cloud the picture. But don't get too comfortable just yet because there's one more catch. Just like the S&P PMI prices paid component, uh, which surged, the ISM prices paid component also surged to its highest level since October of '22. And that is a flashing yellow sign, right? Inflation pressures are creeping back in. So if the conflict drags on past April and energy prices remain elevated, those inflationary pressures are going to get stronger and eventually start to bleed into the services side of the US economy. Higher fuel, transportation, and other input costs at the producer level are ultimately going to filter down to the consumer level. And when that happens, households will begin to reconsider their discretionary and services spending. And when consumers start pulling back, the services economy will feel it. So while the ISM report tells us that services are still expanding, uh, today, the real question is how long can that last? And if energy prices stay elevated and inflation begins to reaccelerate, then what? A look at the sectors yesterday now gives us a clue on kind of what investors were thinking, and it makes sense. Consumer staples, they won first place. They were up 1 full percent, taking that group up 6.5% year-to-date. That's a positive. In an odd twist though, consumer discretionary, right, which we just talked about, came in second. They were up 0.8%, but that sector is down 8.7% year-to-date. Financials rose 0.75%, industrials up 0.5%, energy up 0.7%, real estate gained 0.4%, communications was flat, utilities, healthcare, basic materials all down about 0.4%. Industry groups, right, further down the list, home builders are up 1%, Retail's up 1.7%. Disruptive tech up 0.4%. The value trade was up 0.5%, leaving that flat on the year, while the growth trade was up 0.4%, but that's still down 6.5% on the year. Emerging markets, they were up 0.9%. Semis up 1.3%. Software was up 0.1%. Oil and gas up 0.75%, and big pharma lost 0.8%. Now let's talk bonds. The TLT and TLH lost a little bit of ground yesterday, not much, down about 0.1%. but 10-year yields stayed at 4.32% and 30-year yields at 4.88%. Crude remains a key pressure point for the entire market. Oil closed yesterday at $112.40 and this morning it's trading at $114.60 on the back of that news overnight, keeping us firmly in that $110, $120 trading range. Look, attacks on infrastructure and the shipping lanes continue to disrupt traffic through the strait. Commercial shipping through the strait has reportedly fallen by about 85% since this conflict began. That's not good. Even if an agreement emerges tonight, damage to the ports, pipelines, and shipping routes could sideline supply for weeks and possibly months to come, which means oil is unlikely to fall meaningfully below $100 until there is complete clarity that the conflict is ending and normal shipping flows have resumed. Until then, crude will continue to trade with a geopolitical premium. Gold, that's also trading with a premium, up $15 this morning at $4,665 after trading as high as $4,695 overnight, as in traders and investors around the world continue to weigh the odds of this conflict spinning further out of control. Now, right now, gold's doing exactly what it's supposed to do, acting as a geopolitical hedge while uncertainty dominates the headlines. Now, if negotiations break down and a ceasefire agreement, uh, and no ceasefire agreement emerges, then gold is going to push higher and it's going to retest the overnight highs and likely move beyond that as investors look for safety, right? But if we get any kind of a diplomatic breakthrough, then like oil, gold should pull back as the geopolitical premium begins to get taken out of the price. Right now, how far it pulls back is going to depend on two things. First, the language in the agreement and whether it signals a temporary pause or a more durable resolution, right? Second, the extent to which Iran is able to negotiate meaningful concessions, which would determine whether this conflict is truly winding down or simply just being postponed, right? Did we kick that can down the road? Well, the clock is still ticking. The VIX remains elevated at 25.40. It's up $1.20, pushing it further into the concern zone. Now, we don't hit the panic zone until we hit 30, so you got to watch closely. Remember, we don't have a deal until we have a deal, and until that happens, the VIX is likely to remain on edge as traders continue to hedge their geopolitical risk. A deal will see the VIX plunge and stocks should surge, while no deal is going to see the VIX surge and stocks will most likely, uh, retreat. I'm in the first camp. Where are you? Now, EGO data today includes durable goods expected to be down 1.2% ex-transport, up a half a percent. And we're going to get the New York Fed 1-year inflation expectation, uh, of 3.5%. That's up from 3%. Again, not good. Asian markets closed mixed. Taiwan was up 2%, Hong Kong lost 7/10. European markets are higher this morning. France is up 6/10 and UK's up 1/10 of a percent. US futures were higher overnight on hopes of a deal, but they're now pointing lower as those headlines suggest that Iran is threatening more infrastructure damage to some of the Gulf states, suggesting they are pushing the limits. At 7 o'clock, the Dow, uh, down 200 points, the S&P was down 35, the NASDAQ down 168, and the Russell was down 20. Now, while this suggests confusion, think of it all as part of the plan. I'm betting on the 11th hour deal, right? No one, including the Gulf States, really, really wants to see total destruction of Iran, right? Let's get real. So I say we're gonna get this deal sometime after the market closes today, in between the close and say 8 o'clock. Now the S&P closed at 6,611 yesterday, is up 30 points, leaving us still below the long-term trend line at 6644. Weaker futures right now suggest that we're not gonna pierce it today, but that could all change on a dime in a matter of minutes if there's any indication at all that a deal's possible. So sit tight. Currently the clock says it's T-minus 11 hours. Now is not the time to panic or make emotional decisions. Remember, you need to stay disciplined. You need to look for longer-term opportunities that geopolitical drama often creates. These moments tend to misprice stocks, especially the large caps and mega caps, because asset managers can raise cash quickly by selling names like Amazon and Apple and, uh, Verizon and telephone, whatever, right? You can call me at 561-931-0190. Let's talk about the risk in your portfolio and how to reach your goals. Okay, so what are we having? This is this appetizer. I call it Miss Amy's shrimp and artichokes. So I had some guests over for Easter Sunday. One of them was, you know, Amy, who lives in Boston. She's married to my cousin. They're down here vacationing for a couple of months. Anyway, she brought her favorite appetizer, shrimp and artichokes. It was a crowd pleaser. It will become one of my go-tos as an appetizer when I get invited to someone else's home for dinner. Now you can see the picture on my X account 'cause I posted it on my X account. For this, you need 1.5 pounds of cooked shrimp cleaned and deveined. With no tail or shell, right? You can use frozen jumbos that are already cooked. You can do that, that's fine. You need 2 cans of artichokes hearts in water, not oil, 1/2 cup of red wine vinegar, 1/2 cup of vegetable oil, 1/2 cup of olive oil. You need 1 egg, 2 tablespoons of Dijon mustard, 2 tablespoons of chopped chives, and 2 tablespoons of scallions. You need 1 teaspoon of dill weed, and then you need, of course, the salt and pepper. Now bring a small pot of water to a boil. Bring it to a boil first and then drop the egg in for exactly 1 minute. Take the egg out, let it just cool. Now in a blender, you want to put the red wine vinegar, the vegetable oil, the olive oil, and crack and put the egg in there. Whisk, you know, blend it up. Now pour that into a bowl, and then using a whisk, you want to add the mustard, the chives, the scallions, the dill weed, and the salt and pepper. Open the artichokes now, drain them from the water, pat them dry with a paper towel. Defrost the shrimp, making sure you pull any tails and shells off, right? You don't want anything on there, right? Just defrost them under cool water. They defrost right away. Now put all that in a large bowl. Combine the shrimp and the artichokes in the bowl and then pour this marinade sauce all over it. Don't drown it, but make sure it's coated, right? Toss it so that it's all coated. And when you serve it, arrange it on a beautiful white platter, right? And then serve it. It looks delicious and it tastes even better. Again, go find my picture on Twitter. You are not going to be disappointed. Until tomorrow, I am Kenny Polcari and take good care.
