Markets Overview

The S&P 500 has ripped 12% higher in just three weeks since its late-March trough, clawing back losses triggered by the Iran conflict and surging oil prices. The index now sits roughly 9% below its record high, with one veteran strategist — Milton Berg, who nailed the April 2025 bottom — arguing this historic rally is "just getting started." But not everyone is popping champagne: Bank of America analysts warn the market is "progressing toward a bubble," flagging pockets of froth already forming across U.S. equities. Meanwhile, JPMorgan notes the meme-stock craze is approaching post-Liberation Day extremes, a sign retail speculation is heating up again.

Earnings Reports

Capital One reported a significant earnings miss, with provisions for credit losses jumping 72% year-over-year — a stark signal that consumer credit stress is building beneath the surface. The increased bad-debt reserves suggest management is bracing for deterioration in its card portfolio amid macro uncertainty.

AT&T delivered a brighter picture, with earnings showing its aggressive fiber buildout is paying dividends. More customers are bundling internet and wireless services, validating the company's infrastructure-heavy strategy.

Dow Inc. topped estimates as aggressive cost-cutting helped narrow its quarterly loss, though the chemical giant remains in the red. Pool Corp (POOL) beat on both lines — non-GAAP EPS of $1.43 topped consensus by $0.08 on revenue of $1.14B that came in $40M ahead. LSI Industries (LYTS) also impressed, beating EPS estimates by $0.07 on revenue of $150.5M. Heineken posted stronger-than-expected first-quarter volume growth. On the miss side, Old Republic (ORI) fell short on both EPS ($0.68, missing by $0.11) and revenue ($2.2B, light by $70M). Popular (BPOP) split the difference — EPS of $3.78 crushed estimates by $0.44 but revenue of $759.9M missed by $57M.

Fed & Economic Data

The Fed's rate-cut outlook is getting murkier. Trump's preferred candidate at the Federal Reserve is reportedly reconsidering his interest-rate stance, raising the question of whether cuts are off the table entirely for 2026. The president has been publicly vocal about wanting lower rates, but the Iran-driven spike in energy and fertilizer prices — fueled by Iran's closure of the Strait of Hormuz — is complicating the inflation picture. With oil elevated and supply chains under stress, the Fed faces a classic stagflation dilemma: slowing growth amid sticky price pressures.

ServiceNow (NOW) offered a window into the real-economy fallout, revealing that the Iran war is causing enterprise deal delays — a new headwind beyond the direct commodity impact that investors had been pricing in.

Hot Sectors

Semiconductors are in focus after Taiwan Semiconductor (TSM) signaled that ASML's (ASML) high-end EUV machines have gotten too expensive, effectively drawing a line in the sand on capital spending. Analysts moved quickly to calm nerves, but the pushback raises questions about the pace of leading-edge chip investment. The TSM-vs-Nvidia (NVDA) valuation debate is also heating up, with some arguing TSM could surpass Nvidia's market cap by 2030 given its indispensable role in AI.

Energy infrastructure remains a standout. GE Vernova (GEV) earned a price-target raise after another monster quarter, with AI-driven electricity demand putting the power equipment maker "on the ground floor of the Fourth Industrial Revolution." Wheaton Precious Metals (WPM) has surged 75% over the past year on geopolitical tensions, though a 30% drawdown along the way underscores the volatility in the trade.

SaaS stocks got an unlikely defender: Michael Burry of "Big Short" fame is buying software names, throwing cold water on the "SaaS Armageddon" narrative that AI would gut the sector.

Stock News

SpaceX is moving toward one of the most anticipated IPOs in market history, having confidentially filed with the SEC. The Elon Musk-led rocket company is reportedly targeting a massive valuation, and investors are already modeling what a $5,000 stake could look like in five years.

Adobe (ADBE) received a boost on news that investors are calling "massive," though skepticism lingers about whether the creative software giant's AI strategy can truly fend off emerging competitors. Fiverr (FVRR) is crashing ahead of a major investor update, with management pivoting the narrative toward profitable growth. Chewy (CHWY) has been knocked down by the broader market, prompting value hunters to ask whether this is a buying opportunity.

Perma-Pipe International (PPIH), a little-known microcap under $300M market cap, is drawing attention as a potential post-Iran-war rebuilding play with additional upside from AI data center construction. Korn Ferry (KFY) saw Olstein Capital boost its position by over 43,000 shares (~$2.78M), a possible signal that smart money is betting on a hiring recovery.

Market Analysis

Three themes dominate the tape right now. First, the tug-of-war between rally momentum and bubble warnings — the S&P 500's sharp V-shaped recovery has bulls emboldened, but BofA's froth indicators and JPMorgan's meme-stock warning suggest the easy gains may be behind us. Second, the Iran conflict continues to ripple through the economy in unexpected ways, from energy prices to enterprise software deal cycles, and the Fed's response remains the key variable. Third, the AI investment cycle is broadening beyond chips into power infrastructure (GE Vernova) and even traditional software (Burry's SaaS bets), suggesting the theme has legs even as semiconductor capex debates intensify.

Watch this week: More earnings will test whether Capital One's credit deterioration is an outlier or a trend. The SpaceX IPO timeline and any Fed commentary on the inflation-growth tradeoff will set the tone heading into May. And keep an eye on oil — if Strait of Hormuz tensions ease, it could unlock the next leg higher for risk assets.