Morning Report | Oil war-premium fades, Fed hawkish edge
$USO Hormuz signals cut war premium · $TLT FOMC minutes tilt hawkish · $NVDA China concessions hit AI tape · $ITB Mortgage rates up, apps slip · $TGT Comps reaccelerate, consumer mixed
Market Pulse
U.S.-Iran War
4 events
Hormuz access signals and late-stage Iran talks puncture war-risk premium, while IRGC threats keep oil and rates headline-driven.
Last 24 hours
Three VLCCs carrying about 6 million barrels attempted Strait of Hormuz transit on an Iran-designated northern route, after Iran set up a permit-and-toll “Gulf Strait Authority” framework.
Iran’s Revolutionary Guard warned the conflict could extend “beyond the region” if U.S. and Israeli strikes resume, as U.S. officials delivered mixed messaging while calling a ceasefire active but fragile.
UAE ADNOC said a second Hormuz-bypass pipeline is nearly 50% complete and targeted for 2027, while some crude is already redirected via an existing Fujairah route with 1.8 million bpd capacity.
WTI fell more than 5% to settle at $98.26 and Brent fell more than 5% to $105.02 after President Trump said talks with Iran are in the “final stages,” highlighting rapid repricing of disruption odds.
Market reaction
Crude sold off on reopening/talks headlines: Brent fell about 6% to roughly $104.65 and later settled at $105.02, while WTI settled at $98.26. The move coincided with a bond rally, with the U.S. 10-year yield down about 0.09 percentage points to around 4.58%.
Our view
A choppy grind lower in oil as “tiered access” transits and diplomacy reduce immediate tail risk, but with a meaningful risk premium intact given fragile ceasefire conditions and disrupted shipping. Next key check is whether additional, verifiable Hormuz crossings occur under the new permit regime without a restart of strikes.
What could change our view
Renewed U.S./Israeli strikes trigger broader conflict beyond the region, re-closing Hormuz.
Verified sustained reopening boosts flows, collapsing war-risk premium faster than expected.
Tickers: $USO, $BZ=F, $CL=F
AI
4 events
AI tape features Nvidia conceding China, mega-private model labs touting revenue and IPO plans, and AMD stepping up Taiwan packaging investment.
Last 24 hours
Nvidia’s CEO said export controls have largely ceded China’s AI chip market to Huawei and told investors to expect no approvals; Nvidia also reported +85% YoY revenue and authorized an $80B buyback.
Anthropic told investors Q2 revenue may reach $10.9B versus $4.8B in Q1, with sources citing roughly $559M operating profit; reports also discuss a ~$30B round valuing it around $900B.
OpenAI is reported to be preparing a confidential IPO draft filing as soon as Friday, with FT flagging a potential listing as early as September; Goldman Sachs and Morgan Stanley are said to be advising.
AMD announced plans to invest more than $10B across Taiwan’s semiconductor and AI ecosystem to advance packaging and manufacturing, citing partnerships with ASE and SPIL and system partners including Sanmina ahead of 2H26 Helios rollout.
Our view
Listed AI beneficiaries remain supported by capital returns and accelerating infrastructure investment even as China access stays structurally constrained. Key monitor is any change in US export licensing posture plus OpenAI/Anthropic deal and timing updates that could reshuffle investor allocations across the AI complex.
What could change our view
Unexpected reopening of China shipments materially changes Nvidia’s mix and guidance.
Mega-AI IPO/funding terms reset valuations and pull liquidity from listed AI leaders.
Tickers: $NVDA, $AMZN, $GS, $AMD
U.S. Housing
3 events
Mortgage rates tick higher as applications slip, House advances investor curbs, and Lowe’s results highlight uneven housing-linked demand.
Last 24 hours
MBA data showed the 30-year fixed mortgage rate rose to 6.56% from 6.46% as total applications fell 2.3% WoW; purchase apps dropped 4% and ARM share neared 10%.
The House passed the 21st Century ROAD to Housing Act 396–13, limiting “major investors” (≥350 units) from buying additional single-family homes while allowing new construction; the Senate faces a 60-vote hurdle.
Lowe’s reported Q1 revenue and EPS above expectations with comps up 0.6% and online sales up 15.5%, and reaffirmed full-year sales of $92B–$94B and adjusted EPS of $12.25–$12.75.
Our view
Higher mortgage rates keep near-term housing activity choppy, limiting upside for homebuilders and housing-adjacent cyclicals despite pockets of retail execution strength. Watch Treasury-yield-driven rate direction and the Senate’s path on the investor cap, as either could shift affordability and single-family rental growth expectations.
What could change our view
Mortgage rates fall meaningfully, reaccelerating purchase demand and improving builder sentiment.
Senate passes a stricter forced-sale version, pressuring large single-family rental operators.
Tickers: $ITB, $INVH, $LOW
U.S. Consumer
3 events
Mixed U.S. consumer tape as Target reaccelerates comps while Walmart warns fuel-driven budget strain and e.l.f. tests price rollbacks.
Last 24 hours
Walmart guided FY adjusted EPS to $2.75–$2.85 versus $2.91 consensus and current-quarter to $0.72–$0.74 versus $0.75, citing a ~$175M 1Q fuel headwind that could worsen in 2Q.
Target beat on EPS and revenue with comparable sales up 5.6% and digital comps up 8.9%, then raised its full-year net sales growth outlook to 4% while reiterating its $7.50–$8.50 EPS range.
E.l.f. plans to reverse some prior $1 price increases after unit demand softened; a $4 cut on an $18 Halo Glow test drove nearly 40% lift, and the company expects about $55M in tariff refunds.
Market reaction
Walmart shares fell about 2% premarket after FY and current-quarter adjusted EPS guidance came in below consensus.
Our view
Consumer spending is bifurcating toward value and convenience, supporting traffic-led retailers, but earnings will hinge on cost pass-through and mix rather than topline alone. Watch fuel-price persistence and the pace of tariff-refund and pricing actions, which can swing 2Q margin trajectories.
What could change our view
Fuel prices remain elevated into 2Q, deepening budget pressure and retailer margin headwinds.
Price rollbacks and tariff-refund timing disappoint, forcing broader promotions and lower gross margins.
Tickers: $WMT, $TGT, $ELF
Macro & Policy Digest
FOMC minutes lean hawkish as energy and tariff risks threaten sticky inflation, with dissent highlighting discomfort over any easing-tilted guidance.
Last 24 hours
April FOMC minutes showed a hold at 3.50%–3.75%, with most seeing higher risk inflation returns to 2% more slowly; a majority said further firming could be appropriate if inflation stays elevated amid energy and tariff pressures.
Our view
A higher-for-longer Fed with tightening risk reintroduced, keeping duration (TLT) vulnerable to renewed repricing. The key monitor is whether energy-driven inflation persistence keeps readings meaningfully above 2%, pulling the Committee toward additional firming rather than easing-signaling language.
What could change our view
Inflation cools faster than expected, reducing justification for additional policy firming.
Energy-price shock fades quickly, easing concerns about persistent inflation above 2%.
Tickers: $TLT
SpaceX’s reported $75B Nasdaq IPO filing sets up a blockbuster June roadshow and tests demand for dual-class, high-capex growth.
Last 24 hours
SpaceX filed for a Nasdaq IPO under “SPCX”; reports cite a ~$75B raise, a June 4 roadshow and potential pricing June 11 with debut as early as June 12, using a dual-class structure keeping Musk ~85.1% voting control.
Our view
That this filing lifts IPO risk appetite and pulls forward investor focus toward liquidity and supply, but pricing power will hinge on institutional tolerance for control and investment intensity. Monitor roadshow feedback and any disclosed deal size/range for whether demand is broad-based or narrowly concentrated.
What could change our view
Roadshow indicates demand shortfall, forcing a smaller deal or delayed timing.
Governance and loss/capex optics trigger valuation pushback despite headline scale.
Tickers: $IPO
Treasury yields resume climbing as oil strength revives inflation risk premia and keeps curve sensitivity high into housing data.
Last 24 hours
Early Thursday, yields rose with 10Y +~3 bps to 4.6014%, 2Y +~3 bps to 4.0746%, and 30Y +~1 bp to 5.1334% as WTI +1.4% to $99.61 and Brent +1.3% to $106.42.
Market reaction
Rates pushed higher in early trade (10Y to ~4.60%, 30Y ~5.13%, 2Y ~4.07%) alongside firmer oil (WTI $99.61, Brent $106.42), signaling renewed pressure on long-duration Treasuries.
Our view
Duration stays challenged with upside yield bias as energy-linked inflation concerns keep term premium elevated. Key near-term check is April housing starts/permits versus consensus (1.41M starts, 1.39M permits); a meaningful downside surprise would be the cleanest catalyst for a rates pullback.
What could change our view
Housing starts and permits undershoot consensus enough to trigger a rally in Treasuries.
Oil reverses lower, easing inflation fears and compressing breakevens and term premium.
Tickers: $TLT
Company Events
Big Tech restructurings accelerate as Intuit and Meta cut headcount to fund AI priorities, testing whether margin gains offset execution and sentiment risk.
Last 24 hours
Intuit said it will cut about 17% of staff (over 3,000 roles), record $300M–$340M restructuring charges mostly this quarter, and close Reno and Woodland Hills offices while reallocating toward growth and AI.
Meta began a layoff round impacting roughly 8,000 employees (~10%) and is not filling about 6,000 open roles, while shifting resources to AI and moving around 7,000 workers into AI-focused positions.
Market reaction
Intuit shares fell about 13% in extended trading following the restructuring and guidance update.
Our view
These restructurings are aimed at reallocating spend toward AI and simplifying orgs, supporting medium-term margins but leaving near-term equity narratives fragile. Watch for follow-through in guidance and whether Meta avoids additional companywide layoff rounds, as credibility and execution signals will drive reaction.
What could change our view
Restructuring charges or revenue softness overwhelm expected margin benefits.
Further Meta layoff rounds contradict management messaging and hit execution morale.
Tickers: $INTU, $META
Lilly’s retatrutide Phase 3 readout resets obesity-drug efficacy bar, with high-dose ~28% mean weight loss and notable dose-dependent tolerability trade-offs.
Last 24 hours
Eli Lilly reported a pivotal Phase 3 obesity trial (~2,500 patients) with 28.3% mean weight loss over 80 weeks at the highest dose vs 2.2% placebo, alongside 11.3% discontinuation; a 4 mg dose delivered 19% loss with ~4% discontinuation.
Our view
The data further strengthens Lilly’s positioning in next-generation obesity therapy, increasing competitive pressure as investors focus on the approvable dose and real-world tolerability. Key monitor is the regulatory filing path and whether benefit-risk at lower doses remains compelling given discontinuation rates at the highest dose.
What could change our view
Safety or discontinuation profile constrains labeling, dosing flexibility, or filing momentum.
Efficacy at better-tolerated doses disappoints, weakening differentiation versus current benchmarks.
Tickers: $LLY
Tesla’s FSD (Supervised) lands in China, opening a new autonomy monetization lane as feature parity hinges on packaging and approvals.
Last 24 hours
Tesla said on X that Full Self-Driving (Supervised) is now available for vehicles sold in China, after prior ambiguity and recent comments that regulatory approval was still pending.
Our view
China availability becomes a meaningful, higher-margin software upsell over time, but near-term financial impact is constrained by unclear pricing and take-rate. Monitor Tesla’s China offering structure (one-time fee vs subscription, hardware/trim gating) and any guidance that clarifies attach rates and revenue recognition.
What could change our view
China FSD packaging or pricing limits adoption versus expectations.
Regulatory stance tightens, restricting functionality or availability after launch.
Tickers: $TSLA
Go deeper -
For intraday developments, follow our Midday posts.
For the close, the wrap, and next-day trade ideas, read Evening Insights.
For deeper work, Forward Valuation covers multi-week single-name setups (paid subscribers only).
Deep Dive is where we publish our full thematic research for paid subscribers.
Informational only; not investment advice. Sources deemed reliable.