Good Afternoon. The S&P 500 crossed 7,000 for the first time since January, reclaiming its all-time high as Wall Street banks kept printing blowout quarters and Trump declared the conflict "very close to over." The Nasdaq logged its 11th straight day of gains -- a streak not seen in five years. And somewhere in a Paris boardroom, Hermes and Kering are wondering when their customers in Dubai are coming back.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. The S&P 500 Just Hit a New All-Time High

The News: The S&P 500 crossed 7,002.28 on Wednesday, surpassing its January 28 record set just days before U.S.-Israeli strikes on Iran began. The benchmark is now positive for the year after spending seven weeks underwater. The Nasdaq Composite logged its 11th consecutive day of gains -- the longest winning streak since November 2021. The Dow was the lone holdout, dipping slightly as defensive positioning unwound.

Why It Matters: This isn't just a number -- it's a psychological reset. For seven weeks, the market carried a "war premium" that priced in everything from $120 oil to a closed Strait of Hormuz to potential ground troops. All of that has now been fully repriced. For investors, it means the path of least resistance is higher unless the ceasefire talks collapse entirely. For anyone who panic-sold in March, the S&P 500 just delivered a brutal reminder that the market usually recovers faster than the headlines suggest.

What to Watch: The January 28 intraday high of 7,002.28 now becomes support. If the S&P holds above this level through the week, technicians will call it a confirmed breakout. But the April 22 ceasefire expiration and potential Round 2 talks in Islamabad could still deliver a headline shock.

Source: Investopedia

2. Morgan Stanley Posts Record Revenue and Crushes Estimates

The News: Morgan Stanley reported Q1 earnings per share of $3.43, blowing past the $3.02 consensus by 14%. Revenue hit a record $20.58 billion, up 16% year-over-year. Investment banking revenue surged 36%, driven by a 74% explosion in advisory fees. Equities trading rose 25% and fixed income jumped 29%. Bank of America also beat, with sales and trading revenue climbing 13% to $6.4 billion on record equities volumes.

Why It Matters: After two years of anemic deal flow, the M&A machine is roaring again -- and the Iran war paradoxically helped, creating the kind of volatility and dislocation that trading desks thrive on. Morgan Stanley's 29% profit jump to $5.57 billion isn't just a beat; it's a signal that the capital markets cycle has turned. Every major bank that's reported this week -- Goldman, JPMorgan, Citi, BofA, and now Morgan Stanley -- has beaten estimates. This is the first clean earnings sweep for the big banks since 2021.

What to Watch: The clean sweep sets a high bar for regional banks that report later this week. Watch for any cracks in loan loss provisions that could signal credit stress hiding behind the trading boom.

Source: WSJ

3. ASML Raises Full-Year Guidance as AI Chip Demand Keeps Building

The News: Dutch chipmaker ASML reported Q1 revenue within its guidance range and raised its full-year 2026 sales outlook to EUR 36-40 billion, up from a prior range of EUR 34-39 billion. The beat was driven by surging demand for the extreme ultraviolet lithography machines used in AI chip production. Despite the strong results, shares fell 4.2% in European trading amid growing concerns about tightening U.S. restrictions on semiconductor exports to China.

Why It Matters: ASML is the closest thing the chip world has to a monopoly -- every advanced AI chip from Nvidia, AMD, and Apple runs through its machines. When ASML raises guidance, it's a direct read on AI infrastructure spending for the next 12-18 months. The fact that the stock sold off anyway tells you the market is more worried about the China demand cliff than the AI tailwind. China currently accounts for roughly 15% of ASML's revenue, and any new export restrictions could shave billions off the top line. For investors, it's a classic "beat and retreat" pattern that often resolves higher once the selling exhausts itself.

What to Watch: The Meta-Broadcom multi-year chip partnership announced Tuesday adds another data point to the AI capex thesis. Watch for any clarification on new China export rules from the Commerce Department, which could determine whether ASML's China revenue gets cut further.

Source: Bloomberg

4. Trump Says the Iran War Is "Very Close to Over"

The News: In a pre-recorded Fox Business interview, President Trump declared: "We've defeated them militarily, completely. I see it as very close to over." The White House confirmed that a second round of talks with Tehran is "being considered," though nothing has been officially scheduled. Trump told the New York Post that negotiations could resume in Pakistan "over the next two days." Meanwhile, U.S. Central Command declared the naval blockade "fully implemented" within 36 hours of the presidential order.

Why It Matters: Six weeks ago, a Trump peace hint would have moved oil $10 in either direction. Today, WTI barely ticked up 1% to $92. That muted reaction is the real story -- it means the market has already priced in a deal. The blockade was supposed to be the escalatory pressure that spiked crude; instead, it's being read as the final negotiating lever before a diplomatic resolution. For consumers, the combination of a "fully implemented" blockade and $92 oil is the best-case short-term scenario: maximum pressure on Iran with minimum pain at the pump.

What to Watch: Round 2 talks could materialize within days. The April 22 ceasefire deadline is the key date. If talks don't resume before then, the current equilibrium breaks and oil reprices higher fast.

Source: CNBC

5. March Import Prices Rise 0.8%

The News: The Bureau of Labor Statistics reported Wednesday that U.S. import prices increased 0.8% in March, following a 0.9% rise in February. Fuel imports surged 2.9%, while non-fuel import prices climbed 0.6%. Export prices advanced 1.6%. On a year-over-year basis, import prices are up 2.1% and export prices have risen 5.6%.

Why It Matters: This is the inflation data that doesn't make the front page but keeps the Fed up at night. March's import price reading confirms what the PPI report hinted at yesterday: the energy shock from the Iran war is flowing through the supply chain into everything from industrial materials to consumer goods. The silver lining is that the month-over-month pace is decelerating slightly (0.8% vs. 0.9% in February) -- suggesting the worst may have passed if oil stays near $92. For the Fed, it's another data point arguing against rate cuts anytime soon.

What to Watch: The Fed's next meeting is April 29. These import price numbers will feed into the April CPI report (due early May), which will be the next major inflation checkpoint. If oil continues to fall on peace optimism, March may mark the peak of the war-driven import price surge.

Source: Bureau of Labor Statistics

1. Hermes and Kering Crash as the Iran War Hits Europe's Luxury Empire Where It Hurts Most

The News: Hermes shares plunged 14% and Kering dropped 10% in Paris trading on Wednesday after both French luxury houses reported disappointing first-quarter sales. Hermes' CFO Eric du Halgouet said Middle East business "declined 40% in March" after the conflict escalated, adding that the region's downturn cost the company "nearly 1.5 percentage points of growth." Kering reported Middle East retail revenue down 11%, while its flagship brand Gucci saw sales fall 8% -- worse than the 6% analysts expected.

Why It Matters: The Middle East accounts for roughly 5% of revenue at both Kering and Hermes -- but the damage extends far beyond the region. Wealthy Gulf tourists who shop in London, Milan, and Paris have stopped traveling, creating a secondary hit to European retail. The broader luxury sector took the hit too, with Burberry, LVMH, and Moncler all falling 2-3%. For investors, it's a reminder that the Iran war's economic damage extends far beyond oil prices. Luxury was supposed to be a secular growth story; instead, it's become a geopolitical casualty.

What to Watch: Kering's Capital Markets Day is Thursday, where new CEO Luca de Meo will unveil his "ReconKering" turnaround strategy. If the plan can't offset the Middle East headwind, the stock has more room to fall. Hermes, despite the miss, still posted 5.6% sales growth at constant currency -- it remains the sector's fortress.

Source: CNBC

2. The U.S. Blockade Is Now Airtight -- Iran Is Losing an Estimated $435 Million a Day

The News: U.S. Central Command declared late Tuesday that the naval blockade of Iran's ports has been "fully implemented." CENTCOM commander Brad Cooper stated: "U.S. forces have completely [severed] economic trade in and out of Iran by sea." According to the Foundation for Defense of Democracies, over 90% of Iran's $109 billion in annual maritime trade passes through the Strait of Hormuz, and the nation has no substantial alternative trade routes. The estimated daily economic loss to Iran: approximately $435 million.

Why It Matters: This is the economic pressure equivalent of a siege. At $435 million per day, the blockade is costing Tehran roughly $3 billion per week, or about 12% of its entire GDP on an annualized basis. The speed of implementation -- 36 hours from presidential order to full enforcement -- was designed to send a message: the U.S. can choke Iran's economy faster than Tehran can find workarounds. For the peace talks, this is the leverage. Iran's leadership now faces a simple math problem: every day without a deal costs half a billion dollars.

What to Watch: Iran's response options are limited without significant overland trade alternatives. Watch for humanitarian exemption demands from allies (the UK already refused to enforce the blockade), which could create cracks in the pressure campaign. Any sign of Iranian civilian hardship could shift the diplomatic dynamics.

Source: CNBC

3. Israel and Lebanon Agree to Open Direct Negotiations

The News: Israel and Lebanon agreed to launch direct negotiations after meeting in Washington, signaling movement on a second front in the broader Middle East conflict. The agreement represents a rare diplomatic breakthrough between two countries that have been formally at war for decades. The development came as President Trump indicated progress on multiple diplomatic tracks, with U.S.-Iran Round 2 talks also being discussed for later this week.

Why It Matters: While the Iran file gets the headlines, the Israel-Lebanon track may be where real progress happens first. Lebanon was pointedly excluded from the April 8 ceasefire deal, and Israel's subsequent strikes killed 254 people -- an escalation that gave Iran the political cover to close Hormuz again. Direct talks between Jerusalem and Beirut could remove one of the key obstacles to a comprehensive regional settlement. For markets, every additional diplomatic channel reduces the tail risk of re-escalation.

What to Watch: The substance matters more than the optics. If Lebanon can secure a withdrawal of Israeli forces from its southern border in exchange for Hezbollah restraint, it would take a major piece off the geopolitical chess board ahead of the April 22 deadline.

Source: Le Monde

Q: Why did the man put his money in the blender?

A: He wanted to liquidate assets.

The process by which the market determines the fair value of an asset through the interaction of buyers and sellers, incorporating all available information -- including fundamentals, sentiment, and external shocks like wars and blockades.

"After seven weeks of war-driven dislocations, the S&P 500's return to all-time highs suggests price discovery is finally reflecting the market's consensus that a diplomatic resolution is the most likely outcome."

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