Oil Prices Fall as Peace Hopes Rise: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive start to the final trading day of the week.

1. A 10-day ceasefire between Lebanon and Israel went into effect on Thursday and President Donald Trump said the next meeting between the United States and Iran may take place over the weekend, adding to optimism that the Iran war could be nearing an end. (Reuters)

U.S. and Iranian negotiators have scaled back ambitions for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters… If a memorandum to halt the conflict is reached, the two sides are expected to have 60 days to negotiate a final deal, which would require involvement of experts and the International Atomic Energy Agency (IAEA), the Iranian sources said. (Reuters)

Oil prices are falling further on Friday morning, and that is helping lift the market, as are hopes for more progress on peace talks. That looks to extend the market’s melt-up, but that also means pushing the S&P 500 and the Nasdaq Composite deeper into an overbought condition based on their respective relative strength index (RSI) levels. With that in mind, we would suggest you read the next three items and our comments carefully.

2. Alcoa Corp. shares were sliding on Thursday afternoon after the aluminum producer reported first-quarter earnings and revenue that fell short of expectations, despite higher aluminum prices… Alumina production during the first quarter of 2026 declined 5% from the fourth quarter to 2.4 million metric tons, while aluminum production was flat at 607,000 metric tons. But third-party alumina shipments dropped 31%, because of lower sales of externally sourced alumina to fulfill customer commitments, seasonally lower first-quarter shipments, and shipment delays in Australia “primarily related to the Middle East conflict and Cyclone Narelle.” (Barron’s)

What stood out to us during Alcoa’s (AA) earnings conference call on Thursday night was the sharp reminder from the management team about the disruption being caused in the aluminum market by the Middle East conflict and the impact on pricing:

…the Middle East is the largest primary aluminum exporting region in the world. Disruptions to metal flows from the region are not only lifting LME prices, they are also driving higher regional premiums across Europe, North America and Asia. Higher oil prices and the resulting impact on raw materials are increasing production costs globally… In North America, roughly half of imports come from the Middle East. In Europe, reliance is even more pronounced in certain value-add products. Since the escalation of the conflict, regional premiums have moved materially higher.

3. Knight-Swift Transportation Holdings Inc. today announced an update to its earnings guidance for the first quarter of 2026 and introduced guidance for second quarter operating performance. Based on preliminary results and a number of developments largely isolated to the first quarter, the Company now expects Adjusted EPS for the first quarter of 2026 will range from $0.08 to $0.10 (which is an update from the previously-announced expectation of $0.28 to $0.32). (BusinessWire)

While half of Knight-Swift’s reduced guidance reflects company-specific events, including an unfavorable arbitration award and a Mexico VAT tax issue, the other half is due to Q1 2026 weather related disruptions, and “sharply higher fuel prices in March.” Those two issues have been flagged by other companies in recent weeks, and odds are we’re going to hear more about them as the Q1 2026 earnings season moves up a few gears next week and the following one.

Paired with Alcoa’s reminder shared above, the continued march higher in 1H 2026 consensus EPS expectations for the S&P 500 remains a concern. Now let’s build on that some by talking about only in-line guidance, using Netflix (NFLX) as an example.

4. Shares of Netflix fell more than 8% in after-hours trading, after the company reported disappointing guidance. The company’s full-year guidance was unchanged. Netflix forecast second-quarter operating margins would be lower year-over-year… The company posted revenue of $12.25 billion for the quarter, up 16.2% from the same year-earlier period. Net income was $5.28 billion, up nearly 83%. Netflix said its results were driven by subscriber growth, increased pricing and higher advertising revenue. (WSJ)

We’ll have a detailed note on Netflix’s quarterly results and guidance to Pro Portfolio members later on Friday morning, but as we see it, there are two key issues that are weighing on NFLX shares on Friday morning. Neither of them has to do with chairman and co-founder Reed Hastings stepping down from the company’s board after his term expires in June.

The first is the below-consensus guidance issued for the current quarter, with EPS of $0.78 versus the $0.84 market consensus on revenue of about $12.574 billion versus the $12.64 billion consensus. Second, Netflix did not boost its 2026 outlook, opting instead to reiterate its revenue guidance for $50.70 billion to $51.70 billion in revenue versus the $51.37 billion consensus. Measured against the market’s rebound as well as the one for NFLX shares following its decision to walk away from its Warner Bros Discovery (WBD) bid, the lack of an upside revision is weighing on the shares.

We've talked before about how, after pronounced moves in the stock market, forward guidance needs to be raised to help justify that move. With both the S&P 500 and the Nasdaq Composite hitting new record levels, in-line guidance isn’t likely to cut it. And with weather, tariffs and U.S.-Iran conflict related fallout, odds are we’re going to see more companies fall short of lofty whisper expectations.

The cut to the quick comment from us on these first four items is this: The risk we see in the market has risen to levels that warrant maintaining the Portfolio’s market-hedging positions.

5. Apple's iPhone shipments surged 20% in China in the first quarter, for the strongest growth among major vendors, despite an overall decline ‌as rising prices of memory chips boosted costs, data from Counterpoint Research showed. Overall smartphone shipments dropped 4% in the world's largest smartphone market in the period from January to March, hit by supply chain disruptions and the soaring chip prices. (Reuters)

The above from CounterPoint Research helps flesh out other findings about the smartphone market in Q1 2026. All of the findings point to a year-over-year decline in industry shipments, with Apple (AAPL) being one of the few that posted shipment gains compared to the year-ago quarter. We attribute that to a few factors, including Apple’s focus on premium smartphones and its revered supply chain at a time when chip capacity has pivoted toward AI and data center chips. This suggests we could see a modest upside surprise when Apple reports its Q1 2026 results on April 30, but the real juice the market is looking for when it comes to AAPL shares will be at WWDC 2026 and what’s revealed about its refreshed AI-enabled Siri.

6. OpenAI has agreed to ‌pay chip startup Cerebras more than $20 billion over the next three years to use servers powered by the company's chips, under a deal that could also give the ChatGPT maker an equity stake in the firm… In January, the company agreed to buy up to 750 megawatts of computing capacity from Cerebras over three years in a deal valued at more than $10 billion… The company's total spending ⁠over the next three years could reach $30 billion, which may translate into warrants representing up to a 10% stake in Cerebras. (Reuters)

This speaks to the tight chip industry capacity we’ve talked about that is leading to Meta (META) and other hyperscalers, and now OpenAI, to lock in expected chip capacity not just for this year but the coming ones as well. Needless to say, this keeps us bullish on our positions in Nvidia (NVDA) , Marvell (MRVL) and Broadcom (AVGO) , as well as Applied Materials (AMAT) , especially given signals that AI adoption is rising and usage is expanding.

As it relates to Cerebras, the company is expected to soon file its IPO paperwork, and that means these orders from OpenAI are a key anchor in that effort. Reports indicate Cerebras aims to raise more than $3 billion and seek a valuation of at least $35 billion, a 60% premium to its last private valuation of $22 billion in February. Timing suggests a potential Q2 2026 offering, the same as SpaceX’s expected IPO. That timing suggests we could see a nice pick-up in investment banking fees compared to Q1 2026, and based on the market reception, more to come in 2H 2026.

7. Economic data today per TipRanks: While there are no fresh data points being published on Friday, we do have two Federal Reserve speakers making the rounds. Richmond Fed President Tom Barkin at 12:15 p.m. ET, and Fed Governor Christopher Waller at 2 p.m. ET.

8. Companies reporting today per TipRanks: AM – Ally Financial (ALLY) , Badger Meter (BMI) , Ericsson (ERIC) , Fifth Third (FITB) , State Street (STT) and Truist (SAH) .

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMAT, AVGO, META, MRVL, NFLX and NVDA