US equity futures are lower, but rapidly rising and now at premarket highs after aCCTV reportthat talks between Iran and the US in Pakistan may see a breakthrough "tonight or tomorrow"; still the optimism of recent days is being tested, with peace talks in limbo, software concerns reemerging and the bond market flashing warning signals. As of 8:15am ET, S&P 500 futures and Nasdaq 100 contract both fell 0.1%, recovering almost all of their 0.8% overnight drop. Pre-market, Mag 7 are mostly lower with TSLA (-2.8%) and MSFT (-1.6%) lagging. Overnight, we saw a slew of positive semi earnings in Asia: SK Hynix sets record quarterly profits. Oil traffic through the Strait of Hormuz ground to a halt after Iran fired on commercial ships and said it had seized at least two vessels, while theUS military intercepted two Iranian oil supertankers that tried to evade its blockade. Brent rose 0.9% to around $103 a barrel as the US and Iran kept blocking the Strait of Hormuz. The dollar advanced 0.2%, while Treasury yields climbed across the curve. Precious metals are recovering overnight losses and base metals are all higher.

In premarket trading, Mag 7 stocks are all lower: Tesla (TSLA) falls 3% after the electric-vehicle maker boosted its capital expenditures to more than $25 billion for the year to support Elon Musk’s ambition to transform his firm into an AI and robotics company (Microsoft -1.9%, Amazon -0.4%, Nvidia -0.5%, Meta -1.5%, , Alphabet -0.5%, Apple -0.1%)

In corporate news, Lululemon named former Nike head of consumer, product and brand as its new CEO as it looks to move beyond a turbulent period. American Airlines and Alaska Air are said to be pursuing potential revenue-sharing agreements and other strategic partnerships.

The recent resilience of stocks has been underpinned by confidence in a Middle East resolution, a dip-buying mentality, robust earnings and AI. But the steep equity rally is ignoring loud warning signs from the bond market. Treasury yields have been creeping higher on concerns about rising inflation, while stocks appear to be looking past any increase in inflation expectations. Don't tell that to semiconductor stocks though,which are now up a record 16 days,and the rally extended in premarket trading. Texas Instruments set the pace with a 9% jump on booming demand from data center builders.

When you go to a strip club tonight, ask Chyna about the difference between TPU and GPU or DRAM and NANDpic.twitter.com/mDCAi8PWC1

With the earnings season in full swing, the likes of Comcast Corp. and American Express Co. reported beats in profit estimates on Thursday. American Airlines Group Inc. warned it saw $4 billion in extra expenses due to higher jet fuel costs. While earnings remain front and center, price action is perhaps not as strong as it seems on the surface,with the equal-weight S&P 500 lagging behind the records set by S&P 500 and Nasdaq 100 on Wednesday.The latest batch of earnings alsorevived concerns about the impact of AI on software companies, with IBM’s results seen as underwhelming and ServiceNow disappointing the Street with a guidance cut. That said, of the 101 S&P 500 companies to have reported so far this earnings season, 79% have beaten analysts’ forecasts, while 14% have missed.

“A lack of progress on US-Iran negotiations may bring some reality check to equity markets after a strong rebound,” said Emmanuel Cau, head of European equity strategy at Barclays Plc. It’s “hard to see much more upside without more decisive progress on peace. Earnings so far are good, so at least that’s providing some fundamental backstop.”

In politics, Senate Republicans are on a collision course with many of their House counterparts over whether to use their most powerful legislative tool — a funding bill Democrats can’t stop — to narrowly fund the Homeland Security department or to go big and try one last election-year push on affordability. Navy Secretary John Phelan was fired after clashing with top leaders at the Pentagon.

Europe's Stoxx 600 is down 0.5% and on course for a fourth day of declines as business activity data in the euro area comes in softer than expected and ASML shares fall after TSMC said it would hold off deploying the firm’s most cutting-edge lithography machines through 2029. The travel and leisure and mining sectors are the worst performers while telecoms rise. Here are some of the biggest movers on Thursday:

In one of the first data points for April, business activity in the euro area unexpectedly shrank for the first time since 2024. The US reading later on Thursday will also be in focus as an early signal of how the economy is being impacted by higher oil prices.

Source: ZeroHedge News