Stocks Sink as Concern About End of War Reignites

Published as of: April 2, 2026, 9:28 a.m. ET

Editor's note: U.S. markets are closed Friday, April 3, in observance of Good Friday. The full Schwab Market Update will return on Monday, April 6. Tomorrow morning, an abbreviated version will briefly cover nonfarm payrolls data.

(Thursday market open) Oil prices rose and stocks sank after President Trump said late Wednesday the U.S. would hit Iran "extremely hard" over the next two to three weeks. In a nationally televised address, Trump didn't offer a clear path to a relatively quick resolution to the Iran war or a reopening of the Strait of Hormuz.

In data this morning, initial weekly jobless claims fell to 202,000. Analysts had expected 215,000, according to Briefing.com. The rest of the day is light in terms of data and earnings. Yesterday's U.S. data looked solid, but the March ISM Manufacturing PMI^® raised eyebrows for those tracking inflation. "ISM manufacturing prices paid continued to surge in March" and made a new cycle high, noted Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR). Something to check today is FactSet's updated first quarter projections, which last week pegged S&P 500 earnings growth at 13%.

Major U.S. indexes built on Tuesday's rally yesterday, led by cyclical sectors like industrials, communication services, and technology that often perform better when the economy is growing. The brief rally had largely been driven by signals from Trump that the war might end relatively soon, but traders and investors apparently weren't reassured by what they heard from Trump on Wednesday night.

Payrolls will play to an empty theater: The government throws a data party tomorrow and didn't invite Wall Street. March nonfarm payrolls, arguably the most important economic number of the month, is due at 8:30 a.m. ET, when markets are closed for the Good Friday holiday. (Bonds are trading ahead of an early close.) Still, stock futures might be the best way investors can read initial market reaction to the data. Sunday night's trading and Monday's open could be eventful, with more volatility than usual. As far as numbers, analysts expect jobs growth of just over 50,000, well ahead of the negative 92,000 reading from February. As always, revisions to old reports will likely get a close look. The government has been downwardly revising old numbers much of the last year. Unemployment is expected to be stable at 4.4%. The March report is the first to reflect data collected during the Iran war.

Volatility, yields offer sentiment hints: Though both Treasury yields and volatility are down sharply from recent highs, their failure to retreat much further on Wednesday is worth noting. Both provide clues into investor sentiment, and their stubborn trading mid-week suggests many participants aren't convinced peace will break out or oil prices will fall anytime soon. Though overall investor sentiment dropped dramatically over the last month, call volume ticked up this week at the Cboe, the exchange said. At the same time, the Cboe Volatility Index (VIX) doesn't factor in a downward track in market fear, with futures contracts for VIX mostly trading near 24 the rest of the year. That's just below the spot level, and anything above 20 is historically considered elevated. VIX topped 30 at times in March. Consider tracking the VIX curve over coming weeks to see if it gets back below 20 by later this year, possibly a sign that investors expect calmer waters. For the benchmark 10-year Treasury note yield, anything in the near-term below 4.3% appears to reflect more bullish feelings about the market and economy.

SpaceX files for IPO ahead of AI rivals: Tesla (TSLA) fell more than 2% in pre-market trade. The electric vehicle maker is expected to release first-quarter delivery numbers today. In related news, Bloomberg reported that SpaceX, the aerospace and tech firm run by Elon Musk, has filed confidentially for an initial public offering (IPO) ahead of its AI rivals. The filing puts the company on track for a June IPO ahead of expected offerings from OpenAI and Anthropic PBC. SpaceX could seek a valuation in the IPO of more than $1.7 trillion, according to Bloomberg.

Crypto advances on multiple fronts: With crypto deep in a bear market, some skeptics have loudly declared it "dead." Others are moving forward, slowly, with plans to embed it and blockchains into the cornerstones of average Americans' wealth, from the New York Stock Exchange (NYSE) to home mortgages to retirement plans. Here is just some of what's happened in the past two weeks or so:

• The Department of Labor proposed giving the green light for 401(k) plans to invest in cryptocurrencies, among other alternative assets, perhaps unlocking a slice of the $10 trillion in assets currently sitting in 401(k) accounts.
• The Federal National Mortgage Association, the home mortgage giant known as Fannie Mae, agreed to accept crypto-backed mortgages offered by Coinbase and Better Home & Finance Holding. This will enable borrowers to post crypto holdings as collateral for a loan to cover their downpayment. They won't have to sell those holdings and the terms of the mortgage won't change if the crypto falls in value.
• The NYSE said it was partnering with Securitize to develop its own platform for trading tokenized securities.
  Paul Atkins, chair of the Securities and Exchange Commission (SEC), and Michael Selig, chair of the Commodity Futures Trading Commission (CFTC), spoke at the pro-crypto Digital Asset Summit in New York.
• A New York Times article said the relationship between crypto and regulators is entering a "new, cozier phase."
• In a survey by Coinbase and EY-Parthenon, 73% of 351 institutional investors said they planned to increase their crypto allocations in 2026.
• The SEC and CFTC jointly declared 16 cryptocurrencies commodities rather than securities, which will likely mean fewer regulatory hurdles for new investment products.
   

• Globally traded Brent crude rose more than 8% in early trading. It began climbing almost immediately after Trump began speaking Wednesday night and was 5% higher an hour later.
   
• Oil stocks rose after Trump's address. Exxon Mobil (XOM) jumped nearly 3%, Chevron (CVX) rose more than 2%, Devon Energy (DVN) gained more than 3%, and ConocoPhillips (COP) and Occidental Petroleum (OXY) both rose more than 3%.
   
• Shares in airlines sank in early trading. Delta Air Lines (DAL), United Airlines (UAL), and Alaska Air (ALK) all fell 3% or more.
   
• Shares in satellite communications company Globalstar rose more than 12% following a news report that Amazon (AMZN) was in talks to acquire the company.
   
• Penguin Solutions (PENG), which makes artificial intelligence computing infrastructure, rose more than 8% after reporting better-than-expected earnings for its fiscal second quarter.
   
• The Cboe Volatility Index jumped more than 12% to 27.5, indicating rising fear in the market.
   
• In addition to Tesla, the rest of the Magnificent Seven stocks were also trading in the red prior to the open, with each falling 1% or more.
   
• General Motors (GM) fell about 2% in early trading after reporting Wednesday that first-quarter sales fell about 10% from the previous quarter.
   
• Eli Lilly (LLY) was down about 1% in early trading. It climbed nearly 4% yesterday following the U.S. Food and Drug Administration's approval of the company's weight-loss pill.
   
• After leading the way Wednesday, memory chip stocks Micron (MU), Western Digital (WDC), and SanDisk (SDNK) all fell more than 5% in early trade after posting gains of 9% or better the previous day. The rally in these names appeared to reflect dip-buying after fears of AI competition sent shares lower late last month.
   
• Market breadth remains well below average with just 28% of S&P 500 stocks trading above their 50-day moving averages. That's up from below 20% last week at the low but down from more than 70% during the broad-based rally earlier this year. The number of stocks above their 200-day moving average remains below 50%. 

The trend line for Cboe Volatility Index futures (red line) is relatively flat looking ahead to the rest of the year, with the market projecting it to stay about where it is now near 24. That's not a huge difference from where futures trading projected a little over a month ago before the war (yellow line). If the red line in future charts starts tilting up again, that would look bearish for stocks, while the current flat line seems relatively neutral, though elevated compared with historic norms near 20.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

April 3: March nonfarm payrolls, March unemployment, equity markets closed for Good Friday and bond trading ends early.
April 6: No major earnings or data expected.
April 7: No major earnings or data expected.
April 8: Expected earnings from Delta Air Lines (DAL), Constellation Brands (STZ), and Applied Digital (APLD).
April 9: Fourth quarter GDP—third estimate, February PCE prices.