Markets Overview

The S&P 500 has rocketed 16% higher in just two months, fueled by an AI-driven May rally that lifted even beleaguered software stocks. Yet the surge comes amid flashing warning signs: a bear market indicator not seen since 2007 has reemerged, and veteran traders are publicly preparing for a potential 50% decline. Consumer sentiment, meanwhile, has plumbed depths not seen in years—a K-shaped economy, sticky inflation, and the Iran conflict are souring Main Street even as Wall Street charges higher. History, for what it's worth, favors the market in this disconnect.

Earnings Reports

Dell Technologies (DELL) stunned the Street with a 33% single-session rally after blowout earnings, lifting shares of rival server makers across the board and underscoring how the AI buildout is supercharging demand for traditional computing infrastructure. Datadog (DDOG) has more than doubled from its April lows, pushing its market cap toward $80 billion on strong Q1 revenue growth. Salesforce (CRM) was less fortunate—despite momentum in its agentic AI product Agentforce, shares again failed to gain traction post-earnings. Chevron (CVX) reported first-quarter adjusted earnings of $1.41 per share, down sharply from $2.18 a year ago, though surging production offered a silver lining.

Fed & Economic Data

A new era is underway at the Federal Reserve. Jerome Powell has handed the reins to Kevin Warsh—sworn in May 22—in a transition that's only happened once before in 30 years. Warsh inherits a central banker's nightmare: stagflation risk is building as the Iran conflict's true fiscal cost far exceeds the Pentagon's $29 billion estimate, quietly fueling inflation. Americans haven't been this pessimistic in years, and Social Security's 2027 COLA is shaping up to be a mixed bag as gasoline prices climb.

Hot Sectors

Nuclear energy stocks are quietly becoming the trades of the year as data centers strain traditional power grids and small modular reactor (SMR) development accelerates. High-yield energy stocks are drawing income investors with growing dividends that compound over time. Meanwhile, the utilities sector may be the market's next stealth AI play—Big Tech's surging power demand is creating a massive new profit center, and some analysts see a future where tech giants acquire regulated utilities outright.

Stock News

SpaceX has set June 12 as its IPO date and is already laying the groundwork to become the most profitable space company in history. Wolfspeed (WOLF) has more than doubled in the past month despite a mysterious 20% flash crash on May 27. Nio (NIO) delivered 16% of all EV energy in China over just five days through its battery swap network, yet the market appears to be looking the other way. South Korea ordered $4.2 billion in military helicopters from Boeing (BA) and Lockheed Martin (LMT) amid flare-ups in the Strait of Hormuz.

Market Analysis

The central tension heading into summer: AI capex euphoria versus macro fragility. Nvidia (NVDA) CEO Jensen Huang dropped a bombshell, projecting data center capital expenditures will hit $1 trillion in 2027—a signal that Big Tech's infrastructure spending has years of runway. Yet Wall Street is ignoring deteriorating internals at its peril. With Warsh's Fed navigating uncharted stagflation waters, geopolitical risk in the Middle East baked into energy prices, and earnings growth spikes historically marking bull market finales, the disconnect between animal spirits and economic reality has rarely been this stark. Watch tomorrow for durable goods data and any further commentary from Warsh on the rate outlook.