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Crude oil rebounded, bond yields ticked higher and stock prices sagged on Monday, after a Middle East ceasefire unraveled over the weekend. The Nasdaq Composite’s 13-session winning streak ended, as all three main U.S. equity indexes finished in the red. Meanwhile, Kevin Warsh will appear before the Senate Banking Committee on Tuesday, as the process of confirming President Donald Trump’s nominee to be the next Fed chair begins.
The front-month West Texas Intermediate crude oil futures contract rose 5.3% to $86.93 per barrel, while Brent crude oil futures, a global benchmark, climbed 5.2% to $95.06. WTI is up 29.7% since the war between the U.S., Israel and Iran began on February 28, Brent 31.2%.
“Stocks are taking only minor heat in the face of higher oil prices, higher interest rates, and a higher VIX in reaction to the re-closing of the Strait of Hormuz,” Louis Navellier of Navellier & Associates observes. “The problems this creates in the form of oil and petrochemical shortages are much worse for the rest of the world than it is for the U.S.”
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The 10-year U.S. Treasury yield was up to 4.258% from 4.244% on Friday, as markets continue to assess the impact on inflation from the energy shock in the Middle East. The Cboe Volatility Index (VIX) reached 19.99 vs 17.48 on Friday before settling at 19.12, just below the top of the normal range for the market’s “fear index.”
As Navellier explains, jet fuel “is an immediate problem in many places,” among them Asia and Australia. The latter also has “uncomfortable” oil and natural gas reserves, and Europe “isn’t far behind.”
At the same time, Navellier notes, “Earnings estimates continue to rise. Part of this appears to be the inroads and spending of AI, which is driving margins higher.” Navellier also cites “the resilience of the consumer” in company earnings calls.
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3M (MMM, -2.0%), Tesla (TSLA, -2.0%) and Intel (INTC, -4.1%) are among the biggest names on this week’s earnings calendar. And the Census Bureau will report retail sales data for March before the opening bell on Tuesday.
But the main event on this week’s economic calendar is the confirmation hearing for Kevin Warsh to be the next Fed chair. The Senate Banking Committee will convene at 10 am Eastern Standard Time, and we’re following the hearing on our live Kevin Warsh Fed chair nomination blog.
By the closing bell, the tech-heavy Nasdaq Composite was down 0.3% to 24,404, the broad-based S&P 500 was lower by 0.2% at 7,109, and the blue-chip Dow Jones Industrial Average had shed 0.01% to 49,442.
Honeywell executes breakup plan
Honeywell (HON, -1.6%) is selling its productivity solutions and services business as the blue chip dividend stock moves closer to a planned third-quarter spinoff of its aerospace and automation businesses into two separate public companies.
Brady (BRC, -1.6%) will pay $1.5 billion in cash for the PSS business, “further accelerating value creation” while Honeywell nears completion of a multiyear transformation, as CEO Vimal Kaper explained. “The sale also enables us to continue strengthening our financial and operational focus on the company’s core businesses,” Kapur added.
HON, which was up 20.3% year to date through Friday, announced a strategic review last July. Management reported expectations-beating fiscal 2025 fourth-quarter results in January, “led primarily by strong aerospace momentum,” according to CFRA Research analyst Jonathan Sakraida.
“Aerospace Tech delivered standout performance with 21% Y/Y organic sales growth and significant margin expansion to 26.5%,” Sakraida writes, “reflecting strength across commercial aftermarket, defense, and OE markets.”
The analyst has a Buy rating and a $245 12-month target price on HON stock. Honeywell is set to report fiscal 2026 first-quarter results before the opening bell on Thursday.
BlackBerry gets an Nvidia bounce
As Research in Motion, it survived the dot-com bubble. But its “Crackberry” was ultimately done in by Apple’s (AAPL, +1.0%) iPhone. BlackBerry (BB, +13.2%) gets along now mostly by making security software, and the tech stock‘s transformation is paying off lately.
Indeed, BlackBerry is expanding its collaboration with Nvidia (NVDA, +0.2%) and integrating its QNX software with the AI revolutionary’s new platform for industrial and health care systems and applications.
BB was up more than 28% year to date through Friday. As CIBC analyst Todd Coupland explains, BlackBerry delivered a broad-based beat in the fourth quarter, and management “laid out clear visibility to profitable growth” for QNX and its secure communications segments.
“The quarter was clean and fundamentals improved,” Coupland writes. The analyst also cited QNX backlog growth and conversion as “the key near-term catalyst,” along with “expanding embedded verticals.” Coupland rates BB at Outperform (Buy), with a 12-month target price of $6.
The analyst says “QNX can deliver double-digit revenue growth” based on a higher backlog and a growing pipeline, and says the secure communications business could get a boost “with defense spending set to increase across the world.”
