Morning Report | Crude whipsaws near $100; tariff tool curtailed
$USO Crude volatile near $100 · $SPY Court narrows 10% tariff tool · $TM Tariff, memory costs squeeze margins · $IREN Hyperscale buildout drives infra deals · $PHO PFAS compliance pushed to 2031
Market Pulse
U.S.-Iran War
5 events
Hormuz clashes persist as ceasefire holds on paper and peace terms circulate, keeping crude volatile near $100 and cross-asset risk tone cautious.
Last 24 hours
CENTCOM said Iran attacked three U.S. Navy destroyers in the Strait of Hormuz; the U.S. reported intercepts and then struck Iranian coastal and military nodes in self-defense.
Brent slipped to about $99.66 after trading above $101 and WTI to about $94.12; both remained set for weekly losses over 7% as escort-mission planning headlines continued.
Iran’s Foreign Ministry said it is reviewing U.S. messages delivered via Pakistani mediators and has not replied, while Axios reported work on a one-page 14-point memorandum to end the war.
An Iranian official floated a reparations demand and rejected an “unrealistic” Hormuz reopening plan; Trump said “Operation Epic Fury” would end if Iran agrees and warned harsher strikes otherwise.
DOJ (SDNY) and the CFTC opened early-stage probes into oil futures and related prediction-market activity ahead of war-linked announcements, examining four trades tied to reported profits above $2.6B.
Market reaction
Oil stayed volatile but elevated: Brent was near $100 (around $99.66 after >$101) and WTI near $94 (around $94.12), following Thursday settles of $100.06 and $94.81; broader risk assets were modestly softer with the U.S. 10-year near ~4.39%.
Our view
A volatile but range-bound crude tape as the market fades immediate supply-shock fears while keeping a meaningful geopolitical premium. The key swing factor is whether shipping conditions in and around Hormuz visibly stabilize or deteriorate amid ceasefire adherence and any restart or pause in escort operations.
What could change our view
Sustained escalation or meaningful shipping disruption in Hormuz drives a sharp crude repricing higher.
Rapid agreement that credibly enables reopening compresses the risk premium faster than expected.
Tickers: $ABNB, $USO, $CL=F, $BZ=F
Earnings
5 events
Earnings updates flag margin pressure from tariffs and memory costs while consumer demand looks price-sensitive, driving sharp single-stock drawdowns.
Last 24 hours
Toyota reported Q4 operating profit down 49% year over year and missed expectations, cutting FY operating income outlook by over 20% to ¥3.0tn while citing U.S. tariffs and China competition.
Planet Fitness cut full-year targets as net member growth started slower than expected, lowering revenue growth to about 7%, same-club sales to ~1%, and pausing a planned Black Card national price increase.
Sony guided FY net profit to ¥1.16tn (+13% y/y) with a slight revenue decline to ¥12.3tn and authorized up to ¥500bn of buybacks, while highlighting elevated memory costs and weaker PS5 unit sales.
Nintendo announced Switch 2 price hikes (U.S. to $499.99 Sept. 1; Japan to ¥59,980 May 25) and guided FY unit sales to 16.5m, alongside net sales and profit outlooks below consensus amid component and tariff headwinds.
Shake Shack posted a quarterly operating loss and missed EPS and revenue, widened full-year EBITDA guidance to $230m–$245m, and cited winter storms, elevated beef costs, and Middle East disruptions impacting licensed locations and tourism-linked sales.
Market reaction
Planet Fitness shares fell more than 30% on the outlook reset and paused pricing action, while Shake Shack dropped about 30% intraday after its miss and pressured outlook commentary.
Our view
Markets keep rewarding credible cost pass-through or capital return while penalizing guidance cuts tied to tariffs, component inflation, and demand elasticity. Next watch is whether memory-cost pressure and tariff impacts stabilize enough to support unit and margin outlooks in autos, gaming hardware, and value-oriented consumer services.
What could change our view
Rapid easing in memory prices lifts console economics and reverses cautious unit guidance.
Tariff exposure or competitive pressure proves worse, forcing further auto and consumer guidance cuts.
Tickers: $TM, $PLNT, $SONY, $NTDOY
AI
4 events
AI trade diverges as hyperscale buildout drives infrastructure deals and software winners while capital intensity and guidance cuts punish some AI enablers.
Last 24 hours
Nvidia and IREN outlined up to 5GW of DSX-branded AI data center deployments at IREN’s footprint, starting with its Childress, Texas site for AI workloads.
IREN granted Nvidia a five-year right to buy up to 30M shares at $70, and separately signed a five-year $3.4B managed GPU cloud services agreement for Nvidia’s internal use.
CoreWeave guided Q2 revenue to $2.45B–$2.60B versus $2.69B consensus, raised its 2026 capex floor to $31B, and reported Q1 net loss widening to $740M with $25B debt.
Datadog posted its first $1B+ quarterly revenue and raised full-year guidance; Cloudflare announced ~20% workforce cuts tied to an agentic AI-first model alongside a $664M–$665M Q2 revenue guide.
Market reaction
Datadog surged ~31% on the day and was cited lifting Snowflake and MongoDB ~10%, while CoreWeave fell as much as ~10% after hours and Cloudflare dropped ~18% in extended trading.
Our view
Stay selective in AI exposure: favor software names showing demand visibility and operating leverage, while treating capital-intensive compute and data-center buildouts as higher-beta trades. Next key monitor is whether upcoming guidance and capex trajectories tighten or widen the gap between demand strength and funding/expense pressure.
What could change our view
Sustained funding availability lowers capex risk premia across AI infrastructure builders.
AI workload growth slows, undermining raised guidance and software re-rating momentum.
Tickers: $IREN, $CRWV, $DDOG, $NET
Macro & Policy Digest
Trade policy volatility rises as a court narrows the 10% global tariff tool while a July 4 EU deadline revives escalation risk.
Last 24 hours
The U.S. Court of International Trade ruled 2–1 that Section 122 10% global tariffs were unlawful, stopping collections only for Washington and two firms and ordering refunds with interest.
President Trump set a July 4 deadline for the EU to ratify a trade deal, warning tariffs would jump and reiterating a 25% autos/trucks level as talks resume May 10.
Our view
A choppy but contained tariff backdrop for broad U.S. risk assets as legal constraints limit immediate, universal application of the 10% tool and negotiations keep outcomes fluid into early July around EU-sensitive sectors. Monitor any appeal or alternative tariff authority moves, plus May 10 talks and EU ratification progress heading into the July 4 deadline.
What could change our view
Successful appeal or new legal authority enabling broader, longer-lasting tariffs.
EU misses July 4 deadline, triggering materially higher tariffs beyond autos.
Tickers: $SPY
EPA plans to soften PFAS drinking-water rules by extending key compliance to 2031 while revisiting other limits, shifting timing and scope for water treatment demand.
Last 24 hours
EPA said it will propose keeping the 4 ppt PFOA/PFOS standard but extending utility compliance to 2031, while rescinding and revisiting limits for other PFAS including GenX and PFAS mixtures via notice-and-comment.
Our view
Net effect is a timing headwind rather than a removal of the core PFAS mandate, with compliance spend likely pushed out and the remediation universe potentially narrowed for non-PFOA/PFOS species. Monitor the formal proposal docket and any legal challenges under the Safe Drinking Water Act.
What could change our view
Rulemaking or court action blocks the rollback and accelerates compliance timelines.
Final rule materially weakens or removes the 4 ppt PFOA/PFOS standard.
Tickers: $PHO
Used-car wholesale prices dipped in April as fuel costs jumped, nudging auction demand toward older vehicles and EVs.
Last 24 hours
Cox’s Manheim used-vehicle wholesale index fell 1.6% m/m in April (first drop since October) but remained +1.8% y/y; with gasoline near ~$4.56/gal, auctions saw incremental demand shift to older cars and EVs.
Our view
April’s wholesale pullback modestly eases near-term used-car inflation pressure, but the fuel-price shock keeps consumer mix shifting rather than collapsing demand. Monitor whether gasoline stays elevated and whether wholesale-to-retail pass-through resumes, as that will drive affordability and discretionary budget stress.
What could change our view
Gasoline prices reverse lower quickly, reducing the mix shift into older vehicles and EVs.
Wholesale values re-accelerate meaningfully above Cox’s stable ~2% 2026 pace.
Tickers: $KMX
Company Events
GameStop’s $56B reported bid for eBay runs into financing conditions as TD’s commitment hinges on maintaining investment-grade credit metrics.
Last 24 hours
CNBC reports TD Securities issued a ~$20B commitment letter for GameStop’s eBay approach conditioned on an investment-grade combined profile, while Moody’s warns the structure could push leverage to ~9x pre-synergies.
Our view
Treat this as a low-visibility, financing-constrained approach rather than a near-term executable takeout. The next swing factor is whether the bid is restructured to satisfy the investment-grade condition and whether eBay’s board signals engagement or rejection.
What could change our view
Revised structure or added financing that credibly preserves investment-grade metrics.
eBay board engagement leading to formal talks or a definitive agreement.
Tickers: $EBAY
Trump–Xi Beijing summit May 14–15 puts a potential large Boeing China order in focus while Iran-war talks may crowd out trade progress.
Last 24 hours
CNBC sources said Boeing and Citigroup CEOs may join Trump’s China trip ahead of the May 14–15 Beijing summit, with Boeing positioned to announce a large 737 MAX order contingent on summit outcomes.
Our view
Headline-driven optionality into the summit rather than a high-conviction closing catalyst for BA. Monitor whether the CEO delegation is finalized and whether summit messaging tilts toward commercial deals versus Iran-war and Hormuz-focused geopolitics.
What could change our view
Geopolitics dominates the agenda, pushing commercial aviation orders off the summit.
China sticks with Airbus bias, limiting or delaying any Boeing order announcement.
Tickers: $BA
Coinbase earnings miss on softer spot volumes as Q1 crypto drawdown bites, while USDC and derivatives growth highlights a shifting revenue mix.
Last 24 hours
Coinbase reported a Q1 loss with transaction revenue $755.8m vs $805.2m and subscription/services $583.5m vs $619.3m, partly offset by stablecoin revenue rising to $305m and derivatives volume ~$4.2bn (+169% y/y).
Market reaction
COIN fell about 4% in after-hours trading following the print.
Our view
COIN trades defensively near term as management flags subdued trading conditions into Q2, with non-spot revenue streams limiting but not eliminating downside. Monitor whether USDC-related revenue and derivatives/prediction-market momentum can outpace ongoing spot-volume sensitivity tied to the broader crypto tape.
What could change our view
Spot crypto prices and volumes rebound sharply, lifting transaction revenue faster than expected.
USDC market cap or Coinbase-held balances roll over, weakening the stablecoin offset.
Tickers: $COIN
France escalates a criminal probe into Musk and X, raising cross-border AI-content compliance overhangs that can spill onto Tesla via Grok integration.
Last 24 hours
Paris prosecutors said cybercrime authorities escalated a probe of Musk and X into a criminal investigation, citing alleged political algorithm manipulation and Grok-linked Holocaust denial and deepfake content; Musk and ex-X CEO Linda Yaccarino declined an April 20 summons.
Our view
Treat this as a headline-driven regulatory overhang for TSLA rather than an immediate fundamentals shift, with risk concentrated in brand and AI-related compliance scrutiny tied to Grok integration. Monitor for formal charges, enforcement actions, or mandated product/content controls that would raise compliance costs or constrain features in key jurisdictions.
What could change our view
Criminal charges or injunctions that force rapid product or content-control changes.
Regulatory spillover into Tesla vehicle software or broader EU/US AI investigations.
Tickers: $TSLA
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Informational only; not investment advice. Sources deemed reliable.