US stocks muted, oil dips as hopes emerge for an end to Middle East hostilities

Analysts at JPMorgan reiterated their bearish stance on Tesla (TSLA), warning that the stock is overvalued amid delivery misses and a surge in unsold vehicles that threaten to squeeze free cash flow.

“We continue to see large -60% downside to our $145 December 2026 price target and advise investors approach TSLA shares with a high degree of caution,” JPMorgan’s Ryan Brinkman and his team wrote.

On Monday, Tesla shares stabilized after dropping more than 5% on Friday in reaction to the company’s first quarter deliveries.

JPMorgan noted Tesla’s deliveries of 358,023 vehicles globally was 4% lower than Bloomberg consensus estimates. Energy storage installations also fell -15% year-over-year, the first such decline since 2Q22.

“Incredibly, TSLA shares are +50% higher now than when delivery volumes peaked in June 2022 despite Tesla’s 1Q26 deliveries missing analysts’ earlier estimates by more than 1 million vehicles,” wrote Brinkman.

The analyst also noted Tesla produced over 50,000 more vehicles than it delivered in 1Q26, leading to a record surge in unsold vehicles. This inventory build, combined with management’s guidance of over $20 billion in capital expenditures for 2026, is expected to significantly pressure free cash flow.

“The outlook for 2026 free cash flow, meanwhile, has fallen by more than -100%, deteriorating from an expectation for a +$35.7 bn inflow back in June 2022 to the current consensus for a -$4.9 bn outflow,” Brinkman wrote.

Read more here.

Even as Silicon Valley argues AI will further democratize the workforce and create entirely new industries, displaced workers could face a difficult and uphill battle, Goldman Sachs economists said Monday.

“Similarly to previous waves of technological change, AI-driven displacement could impose lasting costs on affected workers, worsening labor market outcomes for several years,” US economists Pierfrancesco Mei and Jessica Rindels wrote in a client note on Monday.

The economists identified four main effects on workers facing occupational disruption from technology:

These effects ripple out into the broader economy, Mei and Rindels wrote. For workers displaced early in their careers, “technological displacement meaningfully slows wealth accumulation relative to other workers … largely driven by delayed homeownership, as lower earnings and persistent job instability constrain displaced workers’ ability to save and invest.”

On a positive note, the economists said retraining programs could “help to mitigate some of the negative effects of AI-related job displacement, enabling displaced workers to earn modestly higher wages and achieve more stable employment.”

Bitcoin (BTC-USD) jumped 4% on Monday, rising back near $70,000 as the broader markets signaled a move higher following renewed threats from President Trump regarding Iran and the potential opening of the Strait of Hormuz, a critical oil shipping route.

The world’s largest cryptocurrency also gained after Axios reported that US and Iranian mediators are discussing terms for a potential 45-day ceasefire that could pave the way for a permanent end to the conflict.

Bitcoin has traded in a tight range over the past month, fluctuating between $63,000 and $73,000. In March, the token outperformed stocks and gold as the Iran war raged on.

Noted tech bull Dan Ives is starting off the week once again pounding the table that AI remains the biggest trade of the year and arguing that the software sell-off has gone too far.

From his Sunday night note:

Investors came into 2026 looking for the Federal Reserve to cut interest rates one or two times.

As the second quarter kicks off, those hopes have been dashed.

As Yahoo Finance’s Jennifer Schonberger reported this weekend:

Read Jennifer’s full story here.

After a four-day trading week that both capped the end of the first quarter and saw markets lap the volatility from last year’s “Liberation Day” surprise, the week ahead will bring investors a key inflation reading and the start of first quarter earnings season.

The week’s key economic data comes on Friday, with the March CPI report. This report will be the first major piece of economic data to pick up impacts from the US-Iran war, which has sent oil prices surging.

Economists expect headline inflation, which includes the costs of energy, rose 1% last month, up from a 0.3% increase in February.

Delta’s earnings will also offer color from an industry set to face negative impacts from the war on a number of fronts — energy costs, consumer confidence, and a potential downturn in international travel. Those results are expected out on Wednesday morning before the market opens.

At roughly 8 a.m. ET on Sunday, President Trump reiterated in an expletive-laden post to Truth Social his threat to begin mass bombardments of Iranian domestic power infrastructure and bridges throughout the country as his 10-day window for Iran to reopen the Strait of Hormuz nears its deadline.

“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran,” the president wrote. “There will be nothing like it!!! Open the F*****’ Strait, you crazy bastards, or you’ll be living in Hell – JUST WATCH! Praise be to Allah.”

A few hours later, President Trump posted to Truth Social, “Tuesday, 8:00 P.M. Eastern Time!” — seemingly the deadline for Iran to reopen the strait.

Fox News reported shortly after the president’s first Truth Social post that Trump said to correspondent Trey Yingst, “If they don’t make a deal and fast, I’m considering blowing everything up and taking over the oil.”

Last Thursday, the US military severed a major bridge in Iran — one of the country’s flagship infrastructure projects — that connected Tehran to the industrial center of Karaj.

Fox News also reported Sunday that Trump said he believes he will be able to reach a deal with Iran on Monday, before the president’s imposed deadline expires on Tuesday.

Attacks by Iran against major energy infrastructure continued over the weekend, including strikes against Bahrain’s BAPCO oil refinery and the headquarters of Kuwait’s state-owned Kuwait Petroleum Corporation.

Kuwait also reported attacks on several of the country’s power and desalination plants.

In a post to X on Saturday, an account reportedly close to Iran’s parliamentary speaker Mohammad Bagher Ghalibaf — a former IRGC general who has become a leading voice within the Iranian regime — said that if Iran “does not receive a credible signal by tomorrow of Trump reconsidering an attack on Iran’s infrastructure, it will preemptively, irreversibly, and on a massive scale target the Saudi electricity and oil production infrastructure, as well as that of the Israeli regime.”

“Iran has so far refrained from exercising this option in order to avoid entering an ‘irreversible infrastructure war’ and a ‘Ukrainization of the region,’ but the time for this restraint will end in the next 24 hours,” the account wrote.

At the same time, oil market watchers digested signs of potential partial resumption of oil flows through the Strait of Hormuz, the world’s most critical oil chokepoint.

Early Sunday morning, the foreign ministry of Oman announced that its leaders had met with Iran’s foreign ministry on Saturday and discussed “possible options for ensuring the smooth flow of transit through the Strait of Hormuz amid the circumstances currently prevailing in the region.”

Also on Saturday, Iran’s military leadership said Iraqi ships would be allowed to transit the Strait of Hormuz, potentially bringing roughly 3 million barrels per day of oil back onto the market.

The semi-official state-run Iranian Mehr News Agency quoted the Iranian president’s office saying, “The Strait of Hormuz will open when damages resulting from the war are compensated from transit fee revenues.”

On Sunday, the Organization of Petroleum Exporting Countries (OPEC+) agreed to increase its monthly production quota by 206,000 barrels per day in May, the same increase the cartel’s member countries agreed upon for April.