Bulls vs Bears EP116: Tin Foil Hat Edition Trump, Mad genius or just mad?
Records amid the ruins. The S&P 500 closed the week within touching distance of its all-time high despite eight weeks of Hormuz closure, Iranian mines, oil above US$100, and collapsed ceasefire talks. With 80% of S&P 500 reporters beating estimates and EPS growth tracking 14%…
The most remarkable feature of this week's market action is not that stocks fell — they barely did — but that after eight weeks of war, seized ships, minefields, oil above US$100, and collapsed ceasefire talks, the S&P 500 is essentially back at its all-time high. The week began with whiplash. After Friday 18 April's brief reopening of the Strait of Hormuz — which sent the S&P to a record close and oil plunging — Iran reversed course over the weekend when the US refused to lift its naval blockade. The US seized the Iranian-flagged Touska, Iran fired on vessels attempting the crossing, and three ships were attacked mid-week even after Trump announced a ceasefire extension. By Thursday, Iran had deployed additional mines and Trump had ordered US Navy ships to "shoot and kill" any vessel laying them. Yet markets rallied on Wednesday when the ceasefire extension was confirmed, helped by the strongest Q1 earnings season in years. Nearly 80% of S&P 500 companies reporting have beaten estimates, with EPS growth tracking around 14%. The Nasdaq hit record closes on Tuesday and Wednesday, chipmakers logged their 16th then 17th consecutive daily gain — the longest ever streak — and the S&P 500 is on course for its best monthly advance since 2020. Hormuz: From "Open" to Minefields in 48 Hours Kuwait declared a further force majeure on oil shipments, noting output had fallen to levels last seen during the Iraqi invasion of the early 1990s. Brent briefly topped US$106, with Citigroup analysts warning prices could reach US$110 if disruption continues another month. Peace talks via Pakistan collapsed mid-week when VP Vance cancelled his Islamabad trip. Trump extended the ceasefire indefinitely — not as a concession, but as a condition: Iran must present a "unified proposal" before talks resume. Earnings: GEV, Intel, Tesla and the AI Capex Race GE Vernova surged 13.75% after raising its annual revenue forecast — its electrification backlog hit US$42bn (up from US$9bn at end-2022) and data centre orders in Q1 alone exceeded all of full-year 2025. Texas Instruments jumped 19.4% after guidance blew past expectations, signalling the analog chip cycle has firmly turned. Intel surged after hours on Q2 guidance of US$13.8–14.8bn vs the US$13.1bn estimate — CEO Lip-Bu Tan's AI CPU revival plan is working. Tesla beat on revenue (US$22.4bn) and saw auto margins improve to 19.2%, but the market punished a CapEx guide lifted to US$25bn+ covering six factories, AI infrastructure and a semiconductor fab. ServiceNow dropped 17.7% after explicitly flagging Middle East war as causing sales deal delays — the first major software company to cite the conflict as a direct revenue headwind. Fed: Warsh Calls for "Regime Change" Kevin Warsh's Senate confirmation hearing for Fed Chair was the week's most consequential macro event. He called for "fundamental policy reforms" and "regime change in the conduct of policy," blaming the Fed for being too slow to act on 2021–22 inflation. Markets are now pricing just a 30% chance of any rate cut before January — down from 60% before the war began. AI & Tech: The Efficiency-for-Capex Trade Meta announced cuts of roughly 8,000 employees and Microsoft offered voluntary buyouts to ~8,750 US workers — both explicitly framed as funding mechanisms for AI infrastructure spending. Amazon separately announced an additional US$5bn investment in Anthropic. Apple's Tim Cook announced he will step down as CEO on September 1, with hardware chief John Ternus to succeed him.
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