Good Afternoon. Yesterday it was records across the board. Today it's the hangover. The S&P 500 and Nasdaq are pulling back from fresh all-time highs, IBM and ServiceNow are getting absolutely shellacked on AI-disruption fears, and Tesla is sliding after Musk raised the capex bar above $25 billion on last night's call. Meanwhile, Brent is back above $103 as Iran seizes ships in the Strait of Hormuz, the US Navy's top officer is out, and Texas Instruments is the lonely bright spot, popping 8% on a beat-and-raise with more companies reporting after the bell.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Software Gets Gutted: IBM -8% and ServiceNow -15% as the AI Disruption Fears Finally Land

The News: IBM is down about 8% in midday trade after beating Q1 estimates ($1.91 adj EPS vs. $1.81; revenue $15.92 billion vs. $15.62 billion) but holding its full-year guidance flat, with software segment growth decelerating from Q4. ServiceNow is down 17% to roughly $85 despite beating revenue ($3.77 billion vs. $3.75 billion estimate) and raising full-year subscription guidance, as billings of $3.49 billion missed and investors fixated on the 140 basis-point sequential drop in operating margin. The selloff is spilling into Microsoft, Oracle, and Salesforce, which are all down 2-4%.

Why It Matters: For investors, this is the first Mag 7-adjacent print where the AI-disruption narrative has actually shown up in the numbers — specifically, both companies called out that enterprise customers are buying less "seat-based" software because AI agents are replacing seats. That's the bear case on enterprise SaaS that traders have been whispering about for 18 months, and it just got two data points in one morning. For consumers, software stocks are roughly 30% of the S&P 500's market cap, so a sustained derate here is the single biggest risk to the index's record run.

What to Watch: Microsoft's print next Wednesday. If Azure growth decelerates and Copilot adoption disappoints, the "seats-getting-replaced" thesis graduates from a couple of bearish data points to a full-blown sector repricing. (Investopedia)

2. Tesla Falls After Earnings Beat Gets Overshadowed by a $25B+ Capex Commitment and No Firm Robotaxi Date

The News: Tesla reported Q1 adjusted EPS of $0.41 (beating $0.37 consensus) on revenue of $22.39 billion (missing the $22.64 billion estimate). The stock is down roughly 4% Thursday after Musk raised this year's capex plan to "above $25 billion" on the call, up from the ~$18 billion analysts were modeling, citing AI training compute and the Optimus humanoid program. Musk committed to a June robotaxi launch in Austin but refused to give a firm production-scale timeline, and energy storage deployments came in at 8.2 GWh versus the 10+ GWh analysts wanted.

Why It Matters: For investors, this is the classic Tesla setup: a mild beat on the number, a bold long-term commitment on the call, and a capex bomb that re-opens the "when does free cash flow actually arrive" question. The $25 billion capex print means roughly zero free cash flow this year, which matters because Tesla's multiple is being held up by the assumption that autonomy and energy turn into cash in 2027. For consumers, Musk's comment that Tesla will offer Model Y and Model 3 at roughly $33,000 after rebates (down from $38,000) signals an actual price war is starting in U.S. EVs.

What to Watch: June robotaxi launch day. If the Austin deployment hits the June window and scales to 50+ vehicles in 60 days, this stock has another 15% in it. If it slips to Q3, the bull case on autonomy takes real damage. (TheStreet)

3. Texas Instruments Pops 8% on a Beat-and-Raise — the First Real Sign the Industrial Chip Cycle Is Turning

The News: Texas Instruments reported Q1 revenue of $4.83 billion (+18.6% YoY, smashing the $4.6 billion estimate) and EPS of $1.68 (+31.3% YoY, crushing the $1.38 consensus), with operating profit up 37%. The analog-chip giant said orders from automotive and industrial customers accelerated through the quarter — the two end markets that have been in a protracted downturn for nearly two years. Shares are up about 8% and pulling Microchip (+4%), ON Semi (+3%), and Analog Devices (+3%) along with them.

Why It Matters: For investors, TI is the cleanest read on real-economy demand in the entire S&P 500 — its chips go into every car, factory, and home appliance sold on the planet. An 18% revenue beat after eight straight quarters of flat-to-down comps means the inventory destocking is finally over and the replacement cycle is starting. For the broader industrial economy, this is as important a signal as any Fed data point — it tells you factories are ordering parts again.

What to Watch: Microchip and Analog Devices earnings in early May. If they confirm the same automotive and industrial bounce, the analog chip trade becomes one of the highest-conviction calls in semis for the rest of the year. (Quiver Quantitative)

4. Oil Back Above $103 as Iran Starts Seizing Ships in Hormuz — Ceasefire Now Looking Like a Hostage Standoff

The News: Brent crude is trading above $103 a barrel and WTI is pushing $98 after Iran seized at least two commercial vessels in the Strait of Hormuz overnight, citing its own retaliation against the ongoing U.S. naval blockade of Iranian ports. Trump responded by ordering the Navy to "shoot and kill any boat putting mines" in the strait, and the White House quietly moved the ceasefire deadline to Sunday while negotiations restart. U.S. Navy Chief Admiral Michael Ramsay was relieved of command overnight as the blockade standoff deepened.

Why It Matters: For investors, oil above $100 is a straight-line tax on S&P 500 margins — every $10 move on the barrel is roughly 30 basis points off S&P 500 earnings for the year. Airlines, chemicals, and consumer discretionary get hit first. For consumers, gasoline futures are now pricing pump prices of $3.95-$4.05 a gallon by early May if Brent holds above $100, which means the "peace dividend" at the pump everyone was counting on is officially back on ice.

What to Watch: Whether Trump actually authorizes a shoot-to-kill engagement against Iranian boats. If there's a live-fire incident before Sunday's deadline, we're looking at Brent at $115 overnight and a broader equity selloff of 2-3%. (Reuters)

5. Intel Reports After the Close With the Stock Already Up 25% on the Month — the Turnaround Thesis Gets Its First Real Test

The News: Intel reports Q1 2026 after the bell with consensus looking for $12.3 billion in revenue (down 2% YoY) and adjusted EPS of just $0.02, versus $0.13 a year ago. The stock has already rallied 25% in April on speculation that CEO Lip-Bu Tan's foundry-and-AI restructuring is starting to stick, and options are pricing a 9-10% move after the number. Wedbush expects a beat driven by price hikes, while Bernstein is warning the print could be "disorganized" as rising memory costs squeeze margins.

Why It Matters: For investors, Intel is the highest-beta name in the semiconductor complex right now — not because of AI, but because of the foundry story. If Tan can show real 18A customer wins and a credible path to positive foundry EBITDA by 2027, the stock gets rerated toward $75. If the foundry numbers disappoint, we're back at $50 very quickly. For the broader tech trade, Intel's print is the cleanest proxy for U.S. chip sovereignty policy actually working.

What to Watch: The foundry customer count. Tan has hinted at three major announcements by year-end. If he discloses even one new marquee customer on the call tonight, this stock has another 10% in it. (Investopedia)

6. Iran Seizes Ships in Hormuz as Trump Pushes Ceasefire Deadline to Sunday — the "Blockade War" Gets Real

The News: The Iranian Revolutionary Guard Corps seized at least two commercial tankers transiting the Strait of Hormuz overnight — a direct response to what Tehran calls the "illegal naval siege" of its ports. Kpler data shows at least 24 tankers have still crossed the strait in both directions in the last 48 hours, but shipping insurers have raised war-risk premiums by 30%. The White House confirmed the ceasefire extension runs through Sunday, April 26, and U.S. Navy chief Admiral Michael Ramsay was replaced in a rapid overnight shuffle described by officials as "operational realignment."

Why It Matters: For investors, this is exactly what "contained escalation" looks like — nobody has fired a missile in five days, but commercial shipping through the world's most critical oil chokepoint is now a live-fire dice roll. Insurance costs feed straight into every barrel of crude and every ton of LNG that moves through the strait. For the broader geopolitical trade, the fact that the U.S. Navy's top officer was quietly relieved overnight is the kind of signal that typically precedes a major operational change — either a de-escalation or a significant new operation.

What to Watch: Whether Iran releases the seized ships by Friday. If the vessels are held past the weekend, Sunday's ceasefire extension collapses and we're back to a shooting war by Monday. If they're released, oil drops $5 overnight. (CNBC)

7. Japan's Nikkei Gives Back 0.74% — First Real Crack in the Peace-Trade Rally After Four Straight Records

The News: Japan's Nikkei 225 closed down 0.74% at 59,143.50 on Thursday, finally breaking the four-session record run as higher oil and the Hormuz ship seizures rattled Japanese exporters and chemicals. The Topix fell 0.6%, South Korea's Kospi lost 0.4%, and Hong Kong's Hang Seng dropped 1.1%. The dollar-yen is back to 154.80 as traders unwind some of this week's carry trade.

Why It Matters: For investors, Japan has been the single best peace-trade proxy all month, so when the Nikkei rolls over on a geopolitical flare-up, it's a clean signal that positioning had gotten one-sided. With the BOJ meeting a week away and core CPI still running above 3%, a 1-2% pullback here is probably healthy — but a 5%+ drawdown would mean the carry trade is unwinding fast. For U.S. investors in Japan ETFs, the dollar-yen moving back toward 155 slightly cushions the blow on currency-unhedged positions.

What to Watch: BOJ Governor Ueda's commentary heading into next week's meeting. If he leaves any daylight for a July rate hike, the yen strengthens and the Nikkei has another leg down. If he stays dovish with oil at $103, the peace-trade bid comes right back. (CNBC)

8. Hezbollah Escalates in South Lebanon as Gaza Regroups — the Iran War's Second and Third Fronts Are Quietly Reopening

The News: Hezbollah launched a fresh wave of rocket attacks against Israeli positions in southern Lebanon overnight, prompting IDF strikes and an expanded ground operation in the Litani buffer zone. Separately, U.S. and Israeli intelligence report that Hamas is using the Gaza ceasefire window to rearm and regroup, with clashes continuing despite the nominal truce. Both developments come as the U.S.-Iran ceasefire enters its own fragile second week.

Why It Matters: For investors, the Iran-Israel war thesis has always assumed a clean "two-front" framing — Iran and Israel, with everything else frozen. The second-front escalations in Lebanon and Gaza suggest Tehran is quietly activating proxies to pressure Washington into a deal without formally breaking the ceasefire. That's bullish for oil and defense stocks and bearish for European tourism, luxury, and airlines. For the broader geopolitical picture, this is the point where "contained war" starts graduating into "regional war" even if nobody calls it that.

What to Watch: Any coordinated Hezbollah-Houthi-Hamas announcement this weekend. That's historically been the trigger for a 5-10% move in Brent and a 50bp spike in the VIX. (ILTV Israel News)

Q: Why does a chicken coop have two doors?

A: Because its a coop, not a sedan.

The financial theory that asset prices, volatility, and returns tend to drift back toward their long-run historical averages over time, so unusually high or low readings in the short run typically reverse.

Usage: "After five record closes in six sessions and the Nasdaq running 18% above its March low, today's pullback is less about Iran and more about plain old mean reversion finally showing up."