Markets Overview

Oil dominated the macro tape today, swinging violently after crude touched a four-year high above $120 on reports President Trump is considering further military escalation in Iran, before reversing sharply lower in early Thursday trading. Brent crude had already been on a tear, topping $109 earlier in the week as global inventories drain at a record pace — a backdrop that has BNP Paribas warning that $200 oil is one of three scenarios that could tip the world into recession. Goldman Sachs traders flagged a growing risk in semiconductors, warning that retail investors have shifted from "buy the dip" to "trading the mania" in chip stocks with high-stakes positioning that could unwind messily.

Earnings Reports

Alphabet (GOOGL) delivered a blockbuster quarter, posting booming cloud revenue and raising its full-year capex guidance to as much as $190 billion, with plans to "significantly increase" spending again in 2027 — a staggering commitment to AI infrastructure. Amazon (AMZN) beat across the board with AWS cloud revenue expanding 28% year over year, topping estimates and prompting CNBC's investing desk to raise its price target after what it called an "all-around killer quarter." Microsoft (MSFT) turned in a promising quarter but couldn't shake investor anxiety about its traditional software business, with shares oscillating in after-hours trading.

Qualcomm (QCOM) soared 16% after CEO Cristiano Amon said the company would begin shipping data center chips to "a large hyperscaler" ahead of schedule and called a bottom in China sales. Carvana (CVNA) popped on record Q1 results, with retail unit sales surging 40% year over year to 187,393 vehicles. Samsung reported an eightfold surge in operating profit to a new record, crushing estimates as the AI boom fuels a memory chip crunch.

Ford (F) raised 2026 guidance, helped by a $1.3 billion tariff refund that offset higher costs from the Iran conflict and trade barriers. Chipotle (CMG) posted a surprise same-store sales increase, an early sign the chain may be breaking out of a slump that has sent shares down 35% over the past year. Stellantis fell as much as 10% despite beating expectations on Q1 adjusted operating income of €960 million, as investors focused on broader auto headwinds. Caterpillar (CAT) saw quarterly profit rise on strong construction and power equipment demand.

On the smaller-cap beat: Iron Mountain (IRM) raised guidance after an earnings beat fueled by data center growth. Albany International (AIN) beat by $0.08 on EPS and $30M on revenue. Kymera Therapeutics (KYMR) beat EPS by $0.20 with revenue of $34.4M, nearly tripling expectations. OneWater Marine (ONEW) was a notable miss, falling short by $0.41 on EPS and $36.6M on revenue.

Fed & Economic Data

Morgan Stanley shifted its rate-cut call following the latest FOMC meeting, arguing that core inflation remains too sticky for the Fed to ease — and is likely to stay that way until the Middle East situation stabilizes. The hawkish reassessment underscores the bind the Fed finds itself in: geopolitical risk is feeding energy prices, which in turn are keeping inflation elevated and the policy rate locked in place. BNP Paribas laid out three recession-trigger scenarios, with $200 oil at the top of the list, reinforcing the narrative that the Iran conflict has become the single most important macro variable.

Hot Sectors

Energy remains the trade of the moment. Brent's run above $109, combined with record inventory draws, is lifting the entire complex — pipeline operators, upstream producers, and even alternative energy plays like Bloom Energy (BE), which charged higher this week without company-specific news. Analysts are highlighting midstream pipeline stocks and dividend-paying majors as the most durable way to play the cycle. Semiconductors are the other hot sector, but Goldman is flashing a caution sign: retail positioning has become aggressive, and the mania-style trading could set up a messy unwind. Intel (INTC) is a case study — every scrap of potentially positive news is driving shares higher, and at least one analyst says the excitement may be overdone. Samsung's record profit on AI memory demand validates the sector's fundamentals, but valuation discipline is thinning. Mining stocks tied to critical minerals are drawing interest as China's grip on 99% of primary gallium production — a key semiconductor input — keeps supply-chain anxiety elevated.

Stock News

Volkswagen warned that its planned cost cuts are insufficient after a 14% drop in Q1 profit, adding to the pressure on European automakers already navigating tariffs and the EV transition. HSBC upgraded U.S. equities over European peers, citing superior earnings momentum, consumer resilience, corporate buybacks, and more favorable positioning. OpenAI loomed large over every hyperscaler earnings call, with analysts noting it as a key competitive variable across Amazon, Alphabet, Meta, and Microsoft's results. Meta (META) heads into its own report with a lingering question: can it monetize AI beyond consumer advertising?

Market Analysis

Three themes dominate heading into May. First, the Iran conflict is now the market's central risk factor — it's driving oil, constraining the Fed, and creating a feedback loop between energy costs and inflation expectations. Watch for any escalation signals over the weekend. Second, Big Tech capex is reaching eye-watering levels. Alphabet's $190 billion commitment, combined with Amazon and Microsoft's cloud buildouts, represents a massive bet that AI workloads will justify the spend — any sign of demand softening would ripple through the entire semiconductor and data center supply chain. Third, the earnings-versus-valuation tension is intensifying: results are broadly strong, but names like Intel and the chip sector broadly are trading on sentiment, not fundamentals. With Meta still to report and the Fed firmly on hold, the next 48 hours could set the tone for May.