U.S. Futures & World Markets

Oil down. Stocks up. That could cover my entire commentary this morning. It's really that simple.

Stocks are catching a bid on reports the White House believes the US and Iran are close to a deal to end the war. Nothing official yet, but talk of an Iranian moratorium of 12–15 years on nuclear enrichment in exchange for sanctions relief has investors leaning bullish.

Tech stocks are leading the charge. AMD is +19% premarket after beating revenue estimates and guiding Q2 above consensus. Corning is +17% after announcing a long-term partnership with Nvidia to strengthen AI manufacturing infrastructure. Even Disney — which many had left for dead — is +4% after a nice earnings report. For context, Disney's stock price (excluding dividends) is down 44% over the last five years.

AI-related names have performed incredibly well lately. Now, with reports of a potential US-Iran resolution, investors are turning their attention to strong quarterly earnings. From Roberts & Ryan: "Nearly all eleven S&P sectors closed higher Tuesday, with Tech and Materials the big winners and only Communications ending lower." While breadth is weaker than anticipated on this rally — likely tied to AI disruption and the software trade — it's good to see the positive sector participation.

S&P Futures vs. Fair Value: +59.00  |  10-Year Yield: 4.35%

CORE Headlines

Charts & Data

The dot-com / AI-boom parallel. Bespoke: "Nasdaq at 858 days after Netscape's release in Dec. 1994: +155%. Nasdaq at 858 days after ChatGPT's release in Nov. 2022: +129%." The parallel between the two eras never ceases to amaze.

Stocks rarely peak in May or June. Ryan Detrick on seasonality: "Stocks have never peaked for the year in June and only twice in May. Another clue that more new highs could be coming in 2026."

College graduates now own 75%+ of American household wealth. Frank Luntz: "College graduates now own more than 75% of American household wealth, up from 50% in 1989. College grads make up approximately 40% of the U.S. population."

The US Dollar is stronger than ever as a global reserve. Kobeissi Letter: "Offshore US Dollar deposits held in banks outside the US are up to a record ~$14.5 trillion — +220% more than the ~$4.5 trillion held at the beginning of the century. By comparison, only ~$3.5 trillion worth of euros are held in offshore banks outside the Eurozone. Global demand for USD is incredibly high."

Q2 GDP tracking at 3.7%. Augur Infinity via Daily Chartbook: The Atlanta Fed's GDPNow model estimate for Q2 GDP growth rose to 3.7% from 3.5% on May 1.

Inflation expectations at highest since 2022. Bloomberg via Daily Chartbook: "The current standoff has forced inflation expectations up, with two-year inflation swaps now above the Fed's upper target of 3%, and at their highest since 2022."

Bitcoin vs. gold — historically bullish setup. Duality Research via Daily Chartbook: "Bitcoin finally snapped its 4th-longest streak without making a new 100-day high vs. Gold. Avg return 100 days later: +31.9% | Median: +28.3% | Win rate: 73%."

April equity inflows were the highest on record. Deutsche Bank via Daily Chartbook: "April saw equity inflows of $97B, with $77B going to US equities — the highest on record for any April, not just in dollar value but also as a proportion of AUM. In the previous five years, April on average saw US equity fund outflows of -$7B."

Sector correlations coming down — bullish for stock picking. Nick Colas, DataTrek Research via Daily Chartbook: "Sector correlations have come down from their recent highs of 0.87 in mid-March and are now 0.79. This suggests that investors have put ongoing geopolitical tensions and still-high energy prices largely behind them."

Health Care and Financials at multi-decade lows in S&P weighting. Rob Anderson via Daily Chartbook: "Health Care's weight in the S&P 500 is now the lowest since 1994. Financials is the lowest since 2009. Tech is less than 1% below its record high."

Nasdaq 100 above 10-day MA for 20 straight days — historically bullish. The Market Stats via Daily Chartbook: "Historically, this saw NDX higher 10 of 12 times 3 months later and 11 of 12 times 1 year later, with an average gain of 19.6%."

Breadth warning: new 52-week lows rising. Simon White, Bloomberg via Daily Chartbook: "The number of stocks making new 52-week lows in the S&P is rising. Extended bull runs rarely see any instances when the number of stocks making new lows is over 20 — it's at 23 at the moment."

Median EPS growth at highest in 4 years. Deutsche Bank via Daily Chartbook: "Earnings growth for the median company is now in the double digits and at its highest level in 4 years." This is the engine behind the bull case.

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.