Good Afternoon. The geopolitical tension dialed down a notch overnight after President Trump confirmed he had postponed a strike on Iran to let talks continue. Oil eased on the news, but markets gave it back where it mattered: memory chips. Seagate, Micron, SanDisk and Western Digital extended their slide as traders priced in a capacity wall just as Nvidia heads into earnings tomorrow.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

The News: President Trump confirmed he had postponed a strike on Iran originally scheduled for today, telling reporters proposals are still moving back and forth and that "neither side seems to be compromising." Brent crude fell about 1% to $110.96 and West Texas Intermediate slipped to $103.81 a barrel on the news. The White House said the President would meet with his national security team today.

Why It Matters: This is the sixth time the President has publicly weighed and walked back a strike, and markets have noticed. For investors, that diminishing-returns dynamic explains why energy gave back gains and the VIX eased -- traders are pricing in talk, not bombs. For consumers, every week of delay is another week without a real oil shock at the pump.

What to Watch: Whether the President's national security meeting produces a hard deadline. If it doesn't, expect more of the same: oil whipsaws, defense names cooling, and the Strait of Hormuz drumbeat staying in the background.

Source: Schwab

The News: Home Depot reported first-quarter sales of $41.8 billion, up 4.8% year-over-year, with comparable sales rising 0.6% and adjusted EPS of $3.43. U.S. comps came in at +0.4%, with February and March positive and April turning negative 0.8%. The company restated prior full-year guidance and shares slipped despite the headline beat.

Why It Matters: When the CEO uses the words "consumer uncertainty and housing affordability pressure," the read-through for the broader DIY economy is clear. For investors, the small 0.6% comp and a 1.3% drop in store transaction volume show the same pattern we've seen all year: people are visiting less but spending a bit more per trip. For consumers, the takeaway is that bigger remodels are still on hold.

What to Watch: Whether Lowe's confirms the same softening tomorrow. If the home-improvement duopoly both flag April weakness, that adds pressure on the Fed's "consumer is fine" narrative.

Source: MarketBeat

The News: Alphabet's Google and Blackstone announced a new AI cloud company built on Google's TPU chips, with Blackstone committing $5 billion of equity capital and taking majority ownership. Including leverage, the deal value reaches $25 billion. The venture aims to bring 500 MW of capacity online in 2027 -- roughly enough to power a mid-sized U.S. city -- and will compete directly with CoreWeave and Nebius.

Why It Matters: This is the first deal of its size that bets the future of AI infrastructure on something other than Nvidia GPUs. For investors, that explains why CoreWeave fell 4% this morning and Alphabet rose nearly 1% -- TPUs just got their first independent commercial outlet. For consumers, more compute capacity from a non-Nvidia stack ultimately means cheaper AI services downstream.

What to Watch: Whether other private credit shops follow Blackstone in. If KKR or Apollo announce similar AI compute JVs, the Nvidia bull case starts to have real competition.

Source: Bloomberg

The News: Seagate fell another 3% in early trade after dropping 7% Monday following CEO Dave Mosley's comment at the JPMorgan conference that new fabs would "take too long" to build. Micron declined another 2% after losing nearly 6% Monday, while SanDisk and Western Digital each fell more than 3% in early trade. The Philadelphia Semiconductor Index has lost about 6% over two days.

Why It Matters: The CEO didn't say demand was weak -- he said capacity can't catch up. That's a different signal than the rest of the AI rally has heard. For investors, the question is whether this is a healthy two-day pause in a sector still up 59% year-to-date, or the start of a real rerating into Nvidia earnings tomorrow. For chip customers, it puts the spotlight back on hyperscaler capex.

What to Watch: Nvidia reports tomorrow afternoon. If the company guides above the Morgan Stanley $285 setup, memory names recover quickly. If guidance is in-line or below, the rotation out of chips accelerates.

Source: CNBC

The News: The National Association of Realtors reported that pending home sales rose in April month-over-month in the Northeast, Midwest, and West, while declining in the South. Chief Economist Lawrence Yun framed the data as "cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates." This follows a 1.5% national rise in March.

Why It Matters: Pending sales are a forward indicator -- they show what's actually under contract, not what closed two months ago. For investors, two straight months of regional broadening suggests the housing market is finally absorbing 30-year rates above 7%. For consumers, it suggests sellers are starting to meet buyers where they are, with the realtor.com data showing new listings have surged.

What to Watch: Whether mortgage rates retreat back under 7.5%. With the 30-year Treasury yield around 5.15%, the mortgage market is still tethered to long-duration weakness, and that's the binding constraint.

Source: NAR

The News: Samsung management is making a rare visit to union leaders to try to avert a planned 18-day strike at the world's largest memory chip factory, set to begin May 21. The union is demanding 15% of operating profit be shared with chip-division workers, removal of the 50% bonus cap, and a 7% pay raise. If granted, the bonus would amount to roughly $400,000 per worker.

Why It Matters: A strike at Samsung's memory facility at the same time Seagate is warning about capacity would be the worst-case-scenario timing for the AI supply chain. For investors, this is a real upside risk for Micron and SK Hynix if the strike actually proceeds, and a near-term tail risk for hyperscaler capex plans. For consumers, it means another reason memory pricing pressure stays elevated.

What to Watch: Whether a tentative deal lands before Thursday. With the strike date 48 hours away, both sides have real pressure to produce a number.

Source: Tom's Hardware

The News: China's National Bureau of Statistics reported industrial production rose 4.1% year-over-year in April, decelerating from 5.7% in March and missing the 5.9% consensus. Retail sales registered just 0.2% year-over-year growth -- the lowest reading in four years -- versus a 1.7% prior reading. Fixed asset investment also slowed.

Why It Matters: This is the clearest sign yet that the post-Lunar-New-Year consumer rebound has stalled. For investors, weakness this broad raises the odds of a Loan Prime Rate cut at next week's PBOC meeting and pressures industrial metals. For global growth watchers, China's slowdown is a real offset to U.S. data that has otherwise stayed firm.

What to Watch: Next Tuesday's LPR decision. If the one-year rate gets trimmed from 3.0%, expect a quick reflexive bounce in copper, iron ore, and the Hang Seng.

Source: Trading Economics

The News: The Bank of Japan released its summary of opinions from the April 28 meeting, showing the 6-3 vote to hold rates unchanged was the most divided in years. Three board members favored a hike, citing upside inflation risks from the Middle East conflict. Overnight interest rate swaps now imply a 77% probability of a hike at the next meeting on June 16.

Why It Matters: Japan continuing its slow walk toward higher rates while the U.S. argues about whether to hike or cut puts real upward pressure on the yen and downward pressure on the Treasury market via unwinding hedges. For investors, the back end of the U.S. curve has already noticed -- the 30-year is at multi-year highs. For Japanese consumers, a hike means cheaper imported food and energy.

What to Watch: USD/JPY into the June 16 meeting. If the pair breaks below 150, the dollar-strength trade gets a real test.

Source: Japan Times

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