Morning Report | Oil above $100 keeps cross-asset on edge
$USO Oil holds above $100 · $TLT Long-end yields hit 2007 highs · $META Agents push AI momentum broader · $TGT First positive comps in five · $ITB Mortgage rates back at 6.75%
Market Pulse
U.S.-Iran War
5 events
Oil stays above $100 as Trump pauses Iran strike decision and Hormuz hazards persist, keeping cross-asset sensitivity high into the week.
Last 24 hours
Trump said he was close to ordering renewed strikes on Iran but postponed for a few days, giving a two-to-three-day negotiation window; Brent settled $111.28 and WTI $107.77, with long-end Treasury yields near 5.19%.
The UAE said drones that struck near the Barakah nuclear plant originated from Iraqi territory, hitting a perimeter generator; officials reported no injuries or radiation leak, while the IAEA warned attacks on operating nuclear facilities carry grave environmental risk.
A U.S. intelligence assessment cited at least 10 mines in the Strait of Hormuz; the Navy has been clearing and directing commercial traffic to routes farther from Iran, and the Pentagon said Iran laid new mines on April 23.
The Senate voted 50–47 to advance Sen. Kaine’s War Powers resolution to end U.S. hostilities with Iran absent authorization; Cassidy flipped to yes, three Republicans were absent, and the measure still needs final votes and faces expected veto risk.
Treasury Secretary Bessent urged G7 partners to intensify action against Iran-linked financing and said the U.S. is reviewing obsolete sanctions designations; he signaled more aggressive, time-bound targeting and pointed to possible future OFAC designations or enforcement steps.
Market reaction
Crude eased on the strike delay but stayed elevated, with Brent down 0.73% to $111.28 and WTI down 0.82% to $107.77; rates remained pressured, with the 30-year briefly near/above ~5.19% and the 10-year near ~4.69%.
Our view
Crude maintains a large geopolitical risk premium and stays highly headline-driven as Hormuz remains hazardous and policy signals stay mixed. Next catalyst is whether the U.S.–Iran deal window yields durable de-escalation alongside measurable normalization of transit routes and any concrete congressional or OFAC actions that cap escalation.
What could change our view
Rapid, sustained rebound in Hormuz traffic and clear mine-clearance progress.
Renewed strikes or direct damage to nuclear infrastructure triggers broader regional disruption.
Tickers: $USO, $CL=F
AI
6 events
AI momentum broadens as Big Tech reorganizes for agents while compute remains scarce and Singapore steps up as a deployment hub.
Last 24 hours
Meta plans to reassign about 7,000 employees into AI initiatives, flatten management layers, and execute roughly 10% layoffs Wednesday as part of a broader reshaping affecting about 20% of staff.
Alibaba unveiled its Zhenwu M890 AI accelerator, claiming about 3x speed versus 810E, and cited roughly 560,000 prior Zhenwu unit deliveries to 400+ customers while teasing a forthcoming Qwen3.7-Max model.
OpenAI launched “Guaranteed Capacity” contracts that let customers reserve compute via 1–3 year commitments with tiered discounts, selling the program only until its current allocation is exhausted.
Nvidia said it will open its first Singapore research hub focused on embodied AI and AI-infrastructure efficiency, aligned with a planned national robotics testbed intended to speed real-world piloting and commercialization.
Singapore announced a National AI Partnership with Google and an MOU with OpenAI to accelerate AI use across public services and enterprises; OpenAI will invest more than S$300 million and build an Applied AI Lab.
Anthropic hired OpenAI co-founder Andrej Karpathy to form a Claude-focused pretraining research team, underscoring intensifying competition for frontier-model talent alongside parallel constraints in training and inference capacity.
Our view
The newsflow supports a continuing AI capex and deployment upcycle led by constrained compute and accelerating ecosystem buildout, favoring infrastructure and platform beneficiaries over near-term margin skeptics. Monitor whether multi-year compute reservation and public-private deployment programs translate into measurable procurement and capacity additions.
What could change our view
AI capacity constraints ease faster than expected, reducing pricing power and capex urgency.
China domestic accelerators gain faster share, pressuring incumbents’ China-linked demand.
Tickers: $META, $BABA, $NVDA, $GOOGL
Retail Earnings
3 events
Retail earnings lean constructive as Target posts first positive comps in five quarters while Home Depot and Lowe’s sustain modest comp growth and guidance.
Last 24 hours
Target fiscal Q1 net sales rose over 6% y/y with comps up 5.6% and gross margin 29.0%; it lifted FY net sales growth to 4% and guided EPS near the high end of $7.50–$8.50.
Home Depot fiscal Q1 beat expectations with revenue $41.77B and comps up 0.6%, but transactions fell 1.3% and gross margin missed; it reiterated FY sales growth of 2.5%–4.5% and guided adjusted EPS growth up to 4%.
Lowe’s fiscal Q1 beat with comps up 0.6% and online sales up 15.5%; it reaffirmed FY sales of $92B–$94B and adjusted EPS of $12.25–$12.75, while noting tariff refund applications and prior corporate role reductions.
Our view
A modestly supportive read-through for U.S. retail and home improvement, with demand holding up enough for beats and maintained/raised outlooks despite margin and transaction friction. Next focus is whether tariff-refund timing and housing-linked large-project deferrals improve or further pressure profitability and volumes.
What could change our view
Tariff refund timing disappoints, amplifying cost pressures and limiting EPS follow-through.
Housing volatility prolongs large-project deferrals, deepening transaction declines at home improvement.
Tickers: $TGT, $HD, $LOW
Macro & Policy Digest
Treasury selloff pushes long-end yields to 2007 highs as inflation worries and foreign official selling fears tighten conditions.
Last 24 hours
Tuesday saw a sharp rates selloff, with 30Y briefly at 5.197% and 10Y near 4.67% after 4.687% intraday; 2Y was about 4.12% (+3 bps).
March TIC data showed total foreign Treasury holdings fell to $9.25T from $9.49T, with China down to $652.3B and Japan down to $1.191T; April TIC is the next checkpoint.
Market reaction
Yields rose across the curve (about +4 bps in 10Y and +3 bps in 30Y on the day cited), while equities closed lower: S&P 500 -0.67%, Nasdaq -0.84%, Dow -0.65%.
Our view
Long-duration Treasurys remain fragile as term premium rises and foreign-official support appears less reliable, keeping TLT skewed to further downside. The next pivot is whether yields stabilize below the cited stress levels (~4.65% in 10Y, ~5.5% in 30Y) and whether April TIC confirms continued liquidation.
What could change our view
April TIC shows renewed foreign buying, easing long-end supply-demand pressure.
Yields decisively fall below highlighted stress thresholds, reversing the selloff momentum.
Tickers: $TLT
Mortgage rates are back at 6.75% while pending home sales improved in April, setting up a demand test for housing equities.
Last 24 hours
Mortgage News Daily put the average 30-year fixed rate at 6.75% after a 7 bp daily jump, up 33 bps in 10 days and 46 bps from the April low.
NAR reported April Pending Home Sales rose 1.4% m/m and 3.2% y/y, with m/m gains in the Northeast, Midwest, and West offset by a decline in the South.
Our view
Higher mortgage rates cap near-term upside for ITB/XHB even as contract activity stabilizes. Key monitor is whether rates retrace from current levels or stay near 7%, which would shift the balance toward affordability-driven demand weakness and higher cancellation risk.
What could change our view
Mortgage rates quickly retrace on de-escalation or oil pullback, reaccelerating demand.
Rates push higher and persist, overwhelming buydowns and pressuring orders and cancellations.
Tickers: $ITB, $XHB
EU advances tariff-removal legislation to lock in Turnberry accord by July 4 deadline, easing near-term U.S.-EU escalation risk for cyclicals.
Last 24 hours
EU co-legislators reached a provisional agreement to implement removal of import duties on U.S. goods ahead of a mid-June approval vote, with safeguards allowing suspension if imports harm EU industry or U.S. tariffs exceed 15%.
Our view
The provisional EU legislation keeps the path open for a broader U.S.-EU pact and limits tail-risk of immediate tariff escalation into early July. Monitor the mid-June final vote and any U.S. signal on maintaining the 15% cap and auto-duty threats.
What could change our view
EU ratification slips past July 4, triggering threatened U.S. higher tariffs.
Brussels invokes suspension mechanism or U.S. keeps steel/aluminum derivatives above 15%.
Tickers: $SPY
Putin–Xi talks revive focus on Power of Siberia 2, a potential 50 bcm/year Russia-to-China gas reroute with key commercial terms unresolved.
Last 24 hours
Putin and Xi met in Beijing as the Kremlin said Power of Siberia 2 would be discussed in detail; the ~2,600 km, 50 bcm/yr pipeline via Mongolia still lacks agreed pricing, financing, and timeline.
Our view
Negotiations stay protracted, limiting near-term implications for global gas balances and leaving maritime disruption risk in focus for LNG-linked markets. Monitor for a binding price-and-volume agreement and financing package; without that, PS2 remains a medium-term concept rather than a tradable supply shift.
What could change our view
Rapid agreement on PS2 pricing and financing accelerates construction and supply reorientation.
Further Strait of Hormuz disruption tightens LNG availability and reprices gas exposures.
Tickers: $UNG
SpaceX IPO process advances with Goldman lead-left, with a prospectus potentially public Wednesday and mega-deal implications for 2026 pipeline.
Last 24 hours
SpaceX selected Goldman Sachs as lead-left underwriter, with Morgan Stanley next and Bank of America, Citi, and JPMorgan also listed; its confidential SEC filing could become public as soon as Wednesday.
Our view
The IPO stays on track into a public S-1, keeping underwriting fee optionality concentrated at Goldman and shaping mega-IPO sentiment. Monitor the S-1 release for financials, risk factors, and initial offering terms, which will determine whether the deal can support the referenced $1.25 trillion scale.
What could change our view
S-1 timing slips or the IPO track is paused after disclosure.
Public filing reveals terms or risks inconsistent with the cited $1.25 trillion valuation.
Tickers: $GS
Samsung labor strike threat lifts near-term memory supply execution risk for semis, with potential knock-on sensitivity across SMH and SOXX constituents.
Last 24 hours
South Korea’s labor commission said Samsung rejected a mediation proposal accepted by its union, triggering a Thursday strike involving 47,000+ workers over performance-bonus demands and payout-cap removal.
Market reaction
Samsung shares reportedly fell about 3% on the news, reflecting concern that labor unrest could disrupt operations during a strong memory/AI cycle.
Our view
Manageable but market-relevant supply execution risk: legal constraints should limit catastrophic fab disruption, keeping the impact skewed to throughput and planning friction. Monitor whether the strike proceeds and whether bonus cap removal becomes embedded, as that could shift the issue from transient disruption to structural profitability pressure.
What could change our view
Strike action materially curtails throughput beyond planning friction despite legal constraints.
Bonus cap removal is adopted, creating a lasting profitability drag at Samsung.
Tickers: $SMH
Company Events
China Commerce Ministry confirms a 200-plane Boeing order with engines and spares, restoring the first major China demand signal since 2017.
Last 24 hours
China’s Commerce Ministry confirmed an agreement to buy 200 Boeing aircraft plus engines and spare parts, following prior U.S. leadership comments and framing it as commercially driven without disclosing mix, timing, pricing, or customer allocation.
Our view
The confirmation reduces headline risk and supports multi-year delivery visibility for BA and adjacent supply-chain activity. Next key monitor is disclosure of aircraft mix, delivery cadence, and commercial terms, which will determine the realized margin and cash-flow implications.
What could change our view
Unfavorable aircraft mix, delivery schedule, or steep discounts reduce profitability versus expectations.
Lack of financing or customer allocation delays execution despite headline confirmation.
Tickers: $BA
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Informational only; not investment advice. Sources deemed reliable.