Futures are higher with earnings in full swing and AI winners soaring. Trump indefinitely extended the ceasefire with Iran just before its Taco Tuesday expiration, while maintaining a blockade of the Strait of Hormuz, after plans for peace talks fell apart. Still, the market doesn’t seem too concerned about the lack of a resolution, and is instead focused on a Tasnim report that Iran had received "some signs" the US was ready to break the blockade. As of 8:00am, S&P futures were up 0.6%, rebounding from two days of declines; Nasdaq futures gained 0.7% with all Mag 7 names trading higher in the premarket. The VIX traded around 19. Overnight, Brent briefly climbed above $100 a barrel as talks earmarked for Islamabad failed to take place, leaving the Strait of Hormuz mostly shut. Tensions escalated as Iranian tankers tested a US blockade and the UK Maritime Trade Operations said two ships came under fire. Treasuries rose across the curve, with the 10-year yield dropping two basis points to 4.27%. The dollar eased 0.1%, while Bitcoin headed for the highest level since February and gold/silver rebounding from yesterday’s weakness. There is nothing on the macro calendar but we will have another busy day with earnings: TSLA is expected to report after market-close today.

In premarket trading, Mag 7 stocks are again all higher (AMZN +1%, META +0.7%, MSFT +0.7%, GOOGL +0.7%, TSLA +0.6%, AAPL +0.4%, NVDA +0.6%)

In corporate news, United Airlines slashed its forecast due to higher fuel prices caused by war in the Middle East, while Lufthansa will scrub 20,000 uneconomic short-haul flights from its European summer schedule. SpaceX said it has an agreement giving it the right to acquire AI startup Cursor, part of the Elon Musk-run firm’s efforts to catch up with rivals in AI coding tools. A small group of unauthorized users have accessed Anthropic’s new Mythos model, which the company says can enable dangerous cyberattacks.

Brent briefly climbed above $100 a barrel as talks earmarked for Islamabad failed to take place, leaving the Strait of Hormuz mostly shut. While a return to fighting the war is not on the cards, there is still little sign the critical Strait of Hormuz will be reopened to oil and gas shipments soon. Iranian gunboats fired on two ships in the waterway on Wednesday. Yet despite gains in oil, futures rose after the first back-to-back drop this month.

“Investors are either standing on the sidelines or have accepted the emotional influence on the market, knowing that negotiations to end the conflict are ongoing,” said Guillermo Hernandez Sampere, head of trading at MPPM.

“Markets are still navigating a fragile balance between improving sentiment and lingering geopolitical risk,” said Daniela Hathorn, senior market analyst at Capital.com. “While ceasefire headlines and periodic reopenings of the Strait of Hormuz have helped ease immediate supply fears, disruptions to flows continue to linger, keeping a residual risk premium embedded in energy markets.”

While stocks are again trading near record highs and earnings remain strong, some market participants warn that oil price volatility is likely to persist, with no deal in sight to reopen the Strait of Hormuz.

“Mixed messages from Donald Trump, and an insistence that a US blockade of Iran will continue, mean investors are still playing a guessing game,” said Russ Mould at AJ Bell. “Having tipped into alarm bell territory above $100 per barrel, oil prices have now dipped below this level – but they still tell a story of distress in global energy markets.”

In tech, thePhiladelphia Semiconductor Index eyeing its longest winning streak ever after 15 days of gains. Memory chip makers are riding surging demand to record profits, yet their stocks are still trading at a fraction of the valuation multiples of other top AI chip names. The shift of trader attention away from war-related risk to earnings is not just playing out on the single-stock level but also showing up in S&P 500 options. Tech earnings through the lens of options reflect a bigger event catalyst than weekend surprises around the conflict.

First quarter earnings season has been off to a strong start,with 82% of the 71 companies in the S&P 500 that have reported so far outpacing estimates. Investors have rewarded names linked to the AI in particular, as strong demand drives fresh optimism around the adoption of the capital-intensive technology.

Source: ZeroHedge News