Major indices are mixed with the S&P 500 hanging on a slim gain and small caps are underperforming . The mixed move comes in spite of oil moving higher and retaking the $100 level.

The Nasdaq is also underperforming, as semis, optics, and memory stocks are getting smashed, as investors assess the current situation in the Strait of Hormuz and its potential to cause supply chain disruptions and shortages.

The Ten-Year Treasury Yield (TNX) is dropping sharply, down 10.8 basis points to 4.332%. This morning, Fed Chair Powell mentioned the Fed’s tools do not have a meaningful effect on supply shocks and that inflation expectations still appear anchored.

Additionally, Fed Miran also noted that there was no immediate evidence of inflation from oil currently. It is not over yet; we still expect more Fed speakers this week.

Nine sectors are moving higher with Financials (XLF) in the lead following new 401(k) rules that expand the use of alternative assets like private equity in 401(k)s (more below). The runner-up is Real Estate (XLRE) benefiting from a dip in the Ten-Year Treasury Yield (TNX). On the other hand, Technology (XLK) is lagging driven by pressure from chip-related names, but relative strength in software names are preventing the sector from posting a wider loss.

The Department of Labor issued new proposed rules on how plan fiduciaries/sponsors can add alternative assets, ranging ​from private equity to cryptocurrencies, to 401(k) retirement plans.

This morning, Trump posted on Truth Social indicating his administration was in peace talks with a new regime for Iran. He also reiterated that if the Strait of Hormuz is not opened energy facilities would be targeted.

Despite this, Polymarket odds of a near-term peace have fallen sharply, as the US continues to deploy military assets to the region.

The Dallas Fed Manufacturing Index fell to -0.2 in March from 0.2 in February, with most metrics changing a little. The bulk of the move was due to the Outlook Index falling 7 points to -3.5, and the Outlook Uncertainty Index rising 20 points to 26.

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