General Market News

The U.S. Consumer Financial Protection Bureau finalized regulations to replace a Biden-era rule that required banks to collect demographic data on small business loan applicants. The Trump administration had delayed the 2023 regulation's implementation following bank industry complaints that it was burdensome and could reduce small business lending. The new rule represents a rollback of the previous data collection requirements.

• Bank lobby groups had argued the original 2023 rule was invasive and could reduce the volume of small business loans offered
• The Trump administration repeatedly pushed back the regulation's effective date, citing ongoing court challenges
• The finalized replacement rule scales back demographic data collection requirements for small business lending

Major US equity indices declined in Q1 2026 despite resilient economic data, as markets grappled with geopolitical volatility including a new war with Iran and potential Strait of Hormuz closure. The Supreme Court struck down Trump's emergency tariff powers, leading to a new 10% global tariff, while the Federal Reserve held rates steady amid political pressure on Chair Powell.

• S&P 500 companies delivered 14.0% year-over-year earnings growth in Q4, marking the fifth consecutive quarter of double-digit growth and exceeding the 8.3% expected at quarter start
• Geopolitical tensions escalated significantly with the start of war with Iran in late February, US capture of Venezuelan President Maduro, and strained NATO relations over Greenland purchase attempts
• Silver experienced extreme volatility with a 31.4% single-day decline on January 30, while the Supreme Court's 6-3 ruling against emergency tariff powers prompted a new 10% 'global tariff' policy

The CBOE Volatility Index (VIX) whipsawed between 17.32 and 18.73 as investors processed mixed signals from mega-cap tech earnings, massive AI spending increases, and Federal Reserve dissent. Four major hyperscalers collectively raised 2026 AI capital expenditure guidance from $670 billion to $725 billion, while the Fed held rates at 3.5-3.75% with an 8-4 vote split, the widest dissent since 1992.

• Meta fell 9% after raising 2026 capex to $125-$145 billion, while Alphabet rallied 6% on earnings that beat expectations with $5.11 EPS versus $2.63 expected and 63% Cloud growth
• Combined hyperscaler spending (Microsoft at $190B, Amazon at $200B, Meta at $125-$145B, Alphabet at $180-$190B) jumped $55 billion higher than pre-earnings estimates
• Market rotation accelerated away from AI-heavy mega-caps into cyclicals and small caps, with Dow proxy DIA up 1% and QQQ down 0.5% amid sticky inflation and WTI crude at $99.89

Major central banks including the Federal Reserve, European Central Bank, and Bank of England held interest rates steady this week but signaled potential rate hikes ahead due to inflation concerns stemming from rising energy prices linked to the U.S.-Israeli conflict with Iran. The Fed maintained an 'easing bias' despite three dissenters, while markets now expect rate increases from the ECB and BoE later this year.

• The Fed kept rates unchanged in an 8-4 vote, with three policymakers opposing the 'easing bias' language, suggesting the dovish stance may be removed as soon as June
• Australia's RBA leads G10 central banks with a 4.1% policy rate after two hikes this year, and markets see an 80% chance of another increase next week as inflation remains at 4.1%
• The ECB and BoE both held rates but signaled growing inflation concerns, with the ECB expected to hike as soon as June and markets pricing multiple increases across developed economies this year

The Federal Communications Commission voted on April 30 to advance a proposal banning all Chinese labs from testing electronic devices like smartphones, cameras, and computers for use in the United States. The FCC also took an initial vote on a separate proposal to bar three major Chinese telecom companies from operating data centers in the U.S. and potentially ban telecom carriers from connecting with those Chinese carriers.

• The ban on Chinese testing labs would affect certification of electronic devices including smartphones, cameras, and computers intended for the U.S. market
• A second proposal targets three major Chinese telecom companies, seeking to bar their U.S. data center operations and restrict American carriers from connecting with them
• The measures represent an expansion of the U.S. government's technology crackdown on China amid ongoing national security concerns

European Central Bank President Christine Lagarde rejected comparisons between the current euro zone economy and 1970s stagflation, despite rising inflation and slowing growth. She emphasized fundamental differences in monetary frameworks, unemployment levels, and inflation patterns between the two periods. The ECB acknowledged intensified risks but maintains growth projections of 0.9% for 2026.

• Lagarde cited key differences from the 1970s: different monetary and fiscal frameworks, lower unemployment today, and non-persistent inflation patterns
• The ECB projects euro zone growth of 0.9% in 2026, 1.3% in 2027, and 1.4% in 2028 under baseline scenario
• An adverse scenario based on oil prices near $120 per barrel would reduce 2026 growth to 0.6%, though Lagarde maintains the economy is not in stagnation or recession

Chicago grain futures reversed earlier gains on Thursday, tracking a retreat in crude oil prices after they hit a four-year high above $126 per barrel. Soybeans, corn, and wheat all declined 0.6-1.5% as oil prices fell, impacting grains tied to biofuel production. The moves come as commodity funds have been net sellers of corn, wheat, and soymeal.

• Soybeans fell 0.6% to $11.90/bushel, corn dropped 0.7% to $4.74/bushel, and wheat declined 1.5% to $6.53/bushel, with all commodities still near multi-year highs despite the pullback
• Oil price strength had buoyed grain prices due to biofuel linkages, as soybeans and corn serve as feedstocks for biofuel production
• Indonesia will tighten import regulations starting May 8, requiring government approval for feed wheat shipments, which analysts say could reduce demand and ease upward price pressure

The Dow Jones Industrial Average rose 314 points (0.64%) on Thursday as strong corporate earnings from companies like Alphabet, Amazon, and Caterpillar offset concerns about elevated oil prices and persistent inflation. The gains were partially capped by sharp declines in Meta (down 9.8%) and Microsoft (down 3%) following disappointing earnings reports.

• Major indices showed mixed performance: Dow up 0.64%, S&P 500 up 0.22%, Nasdaq 100 up 0.06%, with strong earnings from Alphabet (cloud strength), Amazon, and Caterpillar (up 7.4%) supporting sentiment.
• Oil prices eased but remained elevated with Brent crude above $110/barrel and WTI above $104/barrel amid US-Iran tensions and potential military action briefings to President Trump.
• The Federal Reserve held rates steady at 3.5%-3.75% citing persistent inflation, while markets positioned for strong monthly closes with S&P 500 up 9.3% and Nasdaq up 14.3% for April.

Stock futures rose Thursday morning as investors assessed earnings reports from major tech companies including Alphabet, Amazon, Meta, and Microsoft, all of which beat Wall Street expectations. The major indexes are poised to close April with their biggest monthly gains since 2020, with the Nasdaq up 14% and S&P 500 up 9% for the month. Investors are also awaiting key inflation data and GDP figures, along with Apple's earnings report due after the closing bell.

• All four tech giants (Amazon, Microsoft, Meta, Alphabet) beat revenue and profit estimates, though stock reactions varied based on AI spending plans and executive commentary
• West Texas Intermediate crude oil futures fell roughly 2% to around $105 per barrel, while gold rose nearly 2% to $4,645 an ounce and the 10-year Treasury yield slipped to 4.39%
• March PCE inflation data and first-quarter GDP are scheduled for 8:30 a.m. ET, with expectations of 0.7% monthly price increase and 2.2% quarterly GDP growth

The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) index, remained elevated in March 2026, rising 3.5% year-over-year and 0.7% monthly. Core PCE, which excludes food and energy, increased 3.2% annually and 0.3% monthly, meeting economist expectations but signaling persistent inflation pressures for consumers and Fed policy.

• PCE index rose 0.7% monthly and 3.5% annually in March, both in line with LSEG economist forecasts
• Core PCE increased 0.3% monthly and 3.2% year-over-year, matching expectations and indicating stubborn underlying inflation
• Elevated inflation measures suggest continued price pressures facing consumers and potential implications for Federal Reserve monetary policy decisions

The core personal consumption expenditures (PCE) price index rose 3.2% in March, meeting economist expectations. Additionally, GDP grew 2% in the first quarter, providing key data points on inflation and economic growth as policymakers assess the health of the U.S. economy.

• Core PCE inflation hit 3.2% year-over-year in March, matching the Dow Jones consensus forecast
• First quarter GDP expanded at a 2% rate, indicating moderate economic growth
• The core PCE index is the Federal Reserve's preferred inflation measure, making this data critical for monetary policy decisions

US equity indices rallied on Thursday as interest rates declined, with the Nasdaq 100 briefly hitting a new all-time high before pulling back slightly. The rate-equity correlation continues to drive market direction, though indices appear poised for consolidation after recent strong gains. All three major indices showed positive momentum, with the Dow Jones posting the strongest daily performance at +1.06%.

• Nasdaq 100 reached a new all-time high overnight but analyst suggests pullbacks to 26,275 level would offer better entry points after the recent rapid ascent
• Dow Jones 30 is holding above 49,000 and forming a potential bullish flag pattern, though the 50,000 level may present resistance in the near term
• S&P 500 is testing all-time highs again with 7,000 identified as key support, though sideways consolidation is expected as the market digests recent momentum

Deutsche Bank has debunked the 'Sell in May and go away' trading strategy, finding it underperformed buy-and-hold in 25 of 39 years since 1987. The apparent long-term outperformance is entirely driven by just three exceptional years during the dot-com bust (1998, 2001, 2002), and the strategy has underperformed in eight of the last 10 years. The bank concludes the seasonal trade offers no more certainty than a coin toss and advises investors to focus on fundamentals rather than calendar-based rules.

• The strategy showed 9% annualized returns versus 7.4% for buy-and-hold since 1987, but this entire outperformance disappears when excluding three years (1998, 2001, 2002) from the dot-com crash period
• Even a modified version using European government bonds instead of cash during summer months only beat the market in 13 of 28 years, with a median relative performance that is slightly negative
• In 2025, following the 'Sell in May' strategy cost investors 2.7 percentage points against the market, while US investors missed a 14% equity gain last summer by holding 3%-returning Treasuries instead

President Trump announced a naval blockade of Iran to force nuclear negotiations, claiming Iran's oil infrastructure would 'explode' within days from storage overflow. However, analysts estimate Iran has storage capacity and floating tankers to sustain the blockade for 26 to 76 days, allowing Tehran to shut down oilfields in an orderly manner without permanent damage while the global economic impact intensifies.

• Iran's oil loadings have collapsed from 2.1 million barrels per day to 567,000 bpd, with no confirmed Iranian tanker passages through the U.S. blockade zone
• Iran has storage capacity for 26-76 days depending on use of onshore tanks, floating storage, and returning vessels, giving Tehran weeks to months before facing 'excruciating pain'
• Iran holds 120 million barrels of oil on tankers east of the blockade (equivalent to two months revenue) that could be sold to customers like China, though cash collection may be challenging

Despite oil prices surging over 6-7% amid Iran war concerns and pushing California gas prices to $5.98 per gallon (41% above the national average), financial strategists remain bullish on consumer stocks. YieldMax's Mike Khouw argues that consumer staples will continue selling regardless of geopolitical pressures, while discretionary stocks show resilience as March retail sales grew for consecutive periods.

• Oil shock hitting consumers hard: California gas averaged $5.98/gallon as of Wednesday, 41% above the national average which hit a new 2026 high
• Consumer staples seen as resilient with products like 'diapers and toilet paper' expected to sell regardless of geopolitical conditions
• Retail sales data shows strength with March growth continuing for consecutive periods, driving bullish sentiment in consumer discretionary stocks despite recent punishment

Oil prices surged to four-year highs amid the Iran war crisis, with Brent crude hitting $126 per barrel, creating inflationary pressures as the Federal Reserve held rates steady. The Fed removed its easing bias with three dissenting votes, while futures markets now price in potential rate hikes rather than cuts. Major tech companies reported earnings with mixed results, though combined AI-related capital expenditure is expected to exceed $700 billion in 2026.

• Brent crude reached $126/barrel (four-year high) on Iran war concerns, prompting the Fed to eliminate its easing bias despite holding rates steady; markets now see a one-in-three chance of a rate hike by April 2027
• Fed Chair Powell announced he will remain as a board member after his chairmanship ends next month, preventing an immediate Trump appointment vacancy until early 2028
• Big Tech earnings showed divergence: Alphabet surged 8% on cloud strength while Meta dropped 6% on capex concerns, but combined 'hyperscaler' AI spending is projected to top $700 billion for the year

Oil prices surged to four-year highs amid the Iran war, with Brent crude hitting $126 per barrel, overshadowing mixed big tech earnings results. The Federal Reserve held rates steady but three regional presidents voted to remove easing bias language, while futures markets now price out rate cuts entirely for 2026 and assign one-in-three odds of a hike by April 2027. Major central banks including the ECB and Bank of England are expected to warn of oil-related inflationary pressures.

• Brent crude reached $126/barrel (four-year high) on renewed Iran war tensions and potential U.S. military action, with the 30-year Treasury yield briefly topping 5% for the first time since September
• Fed Chair Powell announced he will remain as a board member after his chairmanship ends next month, preventing an immediate vacancy for President Trump to fill until early 2028
• Tech earnings were mixed: Alphabet surged 8% on cloud strength while Meta dropped 6% on capex concerns, though total 2026 spending from hyperscalers is now expected to exceed $700 billion for AI infrastructure

Small-cap stocks tracked by the Russell 2000 index have significantly outperformed the S&P 500 in 2026, rising 9.22% year-to-date compared to the S&P 500's 4.05% gain. The Russell 2000, comprising the smallest 2,000 of America's 3,000 largest public companies, features over a dozen stocks that have more than doubled in value this year, driven partly by AI-related demand.

• The Russell 2000 rallied from 2,508 to over 2,739 in 2026 (9.22% gain), while the S&P 500 rose from 6,858 to 7,136 (4.05% gain) over the same period.
• Top Russell 2000 performers include Bloom Energy (up 235.94%), Applied Optoelectronics, and Aehr Test Systems, many benefiting from AI boom demand for data center infrastructure and semiconductor equipment.
• Some prominent Russell 2000 names underperformed, including Strategy (up only 4.28%), Super Micro Computer (down nearly 21%), and defense stocks AeroVironment and Kratos Defense (down 23.93% and 21.44% respectively).

Delta Electronics, a major supplier of power and cooling systems for AI datacenters, warned that rising oil prices and material shortages will increase costs in coming quarters. The Taiwan-based company reported strong Q1 2025 results with revenue up 34% year-over-year to $5.02 billion, driven by AI datacenter demand. Delta is expanding capacity across China, Thailand, the U.S., and Taiwan to meet surging demand from clients including Nvidia, Google, and Meta.

• First-quarter revenue reached T$159.35 billion ($5.02 billion), up 34% year-over-year, with gross profit jumping 56% to $1.86 billion driven by AI datacenter build-out
• The company plans capital expenditure exceeding T$46.1 billion ($1.46 billion) in 2025 as it expands capacity across multiple countries amid tight supply conditions
• Delta is Taiwan's second most valuable company with $178.46 billion market cap, trailing only TSMC, and serves major AI players including Nvidia, Google, and Meta

China exported 60 tons of yttrium oxide to the U.S. in March, the largest shipment since export controls were imposed in April 2025 during the trade war. This specialty rare earth is critical for aerospace and chipmaking, and the resumption of exports may ease severe shortages that caused prices to surge 6,900% over 12 months.

• The 60-ton March shipment is 50% larger than all yttrium shipped to the U.S. since China imposed controls last April, though total exports remain down 75% year-over-year
• Yttrium oxide prices rose 6,900% in the 12 months to February due to export restrictions, prompting aerospace and semiconductor companies to lobby Washington for intervention
• The material is essential for high-temperature coatings on jet engines and power turbines, with aerospace-defense ties likely contributing to Beijing's previous reluctance to approve exports