Thursday delivered a session in two acts and a close that reflects neither of them cleanly. Act one: the Dow Jones Industrial Average crossed 50,000 points intraday for the first time in its 140-year history, the S&P 500 and Nasdaq touched new all-time intraday highs, Apple hit an all-time high of $290.33, and markets priced the Iran deal as essentially done. Act two: TheStreet reported at 5:29PM ET that Iran accused the US of breaking its month-long ceasefire by striking Qeshm Port and civilian areas “with cooperation of some regional countries.” WTI crude, which had fallen as low as -3.52% to $91.73 mid-session, bounced to settle at $94.81 (-0.28%). The S&P 500 closed at 7,337.11 (-0.38%), the Dow at 49,596.97 (-313.62 points, -0.63%), and the Nasdaq at 25,806.20 (-0.13%). The session’s intraday range — from record highs to a red close — is the market pricing the Iran deal, then partially unpricing it in the same session.
After the close, two earnings reports arrived with the same pattern in different industries: revenue beats, EPS misses, stock selloffs. ARM Holdings fell 7.3% after hours as the earnings call disclosed the company cannot meet a $1 billion in additional AGI CPU demand due to supply capacity constraints — the first supply-side bottleneck disclosure in the current AI hardware buildout cycle. MercadoLibre fell 7.2% after hours after reporting $8.85 billion in Q1 revenue, +49% year-on-year and the fastest growth since Q2 2022, but EPS of $8.23 missed the $9.37 estimate — the fourth consecutive earnings miss as margin compression from deliberate investment continues to outpace the market’s willingness to wait. A US Trade Court struck down Trump’s 10% global tariff — a structural macro event developing alongside the Iran escalation. Full coverage below.
TheStreet reported at 5:29PM ET Thursday that Iran has accused the US of breaking its month-long ceasefire, striking Qeshm Port as well as civilian areas “with cooperation of some regional countries.” The phrase “regional countries” is almost certainly a reference to Israel, which participated in the February 28 opening strikes. This accusation arrives at the worst possible diplomatic moment — when the White House believes it is days away from an MOU (memorandum of understanding) signature, when WTI had already crashed 13% over two sessions on deal optimism, and when markets had largely priced the war as over. If confirmed and not disputed by Washington, a Qeshm strike would represent a significant breach of the de-escalation narrative that has been driving asset prices since Wednesday.
The MOU framework is the most detailed picture yet of what a deal looks like. The Jerusalem Post and Axios confirmed the document is a 14-point memorandum crafted by senior US envoys Steve Witkoff and Jared Kushner together with Iranian officials. Key terms: both countries lift their respective blockades on the Strait of Hormuz; the US removes sanctions on Iran; Iran commits to a 15-year moratorium on uranium enrichment; Iran transfers its stockpile of highly enriched uranium outside its borders, potentially to the US. These are significant Iranian concessions if agreed. An Iranian official responded to Axios calling the proposal “more of a wishlist than a reality” — the first explicit Iranian dismissal of the MOU framework on the record. Iranian state media (Tasnim) confirmed that Iran had not yet sent its response to Pakistani mediators as of Wednesday evening. Trump told Fox News Iran has one week to respond. Pakistani source told Reuters: “We will close this very soon.”
The diplomatic picture as of Thursday close is therefore: the US believes it is close to a deal; Iran is publicly dismissing the framework while privately reviewing it; a possible US strike on Qeshm has injected new escalation risk exactly when both sides appeared to be converging. The Qeshm accusation has not been confirmed or denied by the Pentagon as of this edition. The story is still developing. Full diplomatic history covered in Issues 51 and 51B; this section covers only what is new since this morning’s Morning Brief.
WTI (West Texas Intermediate, the US oil benchmark) opened Thursday continuing Wednesday’s 10.6% crash, falling as low as $91.73 (-3.52%) by mid-session as markets priced Hormuz reopening as imminent. Then the Qeshm accusation broke. WTI reversed and settled at $94.81, down only 0.28% on the session. Brent (the global crude benchmark) settled at $100.06 (-1.19%). The intraday range — $91.73 to $94.81 — represents the market simultaneously pricing a deal (session low) and unpricing it (session close). The two-session decline from last week’s $106.42 peak is now approximately -10.9% to the settle, versus -14% at Thursday’s intraday low. Goldman Sachs’ Q4 WTI target of $83 remains directionally valid, but the Qeshm accusation pushes the timeline into next week and beyond. If the Pentagon confirms a Qeshm strike, oil gaps higher Friday. If Iran’s claim is denied or retracted, oil resumes its decline and Friday’s NFP becomes the primary price driver. NFP Friday now has two simultaneous questions: how strong is the labor market, and where is the Iran deal?
ARM surged 13.6% Wednesday on pre-earnings enthusiasm, then reported Q4 FY2026 results that beat on every headline metric: revenue $1.49 billion (+20% YoY), EPS $0.60 (beat $0.58), data center royalty revenue more than doubled. The initial Wednesday after-hours reaction was positive. Then the earnings call introduced three complications: royalty revenue of $671 million missed the $693.3 million estimate; smartphone market unit growth flipped to negative, weighed down by memory chip shortages and rising component costs; and supply capacity cannot meet an additional $1 billion in AGI CPU demand. ARM reversed from its after-hours gains overnight.
Thursday: ARM opened lower and was red the entire session, closing at approximately $218.93 — a 7.3% decline from Wednesday’s $237.30 close. The stock had more than doubled year-to-date entering this report, creating a buy-the-rumor, sell-the-news setup where even a beat required a flawless forecast. CEO René Haas told CNBC he was “confident AI data center demand is going to continue.” The two ARM stories remain: AI data centers are a structural tailwind; smartphones and supply constraints are the near-term overhang. Thursday punished the overhang.
MercadoLibre reported Q1 2026 revenue of $8.85 billion — beating the $8.29 billion estimate by 6.7%, +49% year-on-year and the fastest top-line growth since Q2 2022. Adjusted EBITDA of $857 million beat the $849 million estimate. Brazil GMV (Gross Merchandise Value, the total value of goods sold through the platform) grew 35% YoY with items sold +45%, Mexico GMV +35%, and the Mercado Pago credit card is being issued at 2.7 million per quarter with TPV +90% YoY. On every growth metric the quarter was exceptional. GAAP EPS of $8.23, however, missed the $9.37 analyst estimate by $1.14 — the fourth consecutive quarterly earnings miss. Operating margin fell to 6.9% from 12.9% in Q1 2025.
The structural tension is deliberate: MELI is compressing margins to fund growth — lowering free-shipping thresholds in Brazil, scaling the Mercado Pago credit flywheel, and building logistics infrastructure across Latin America. The CFO has guided for approximately 5-6 percentage points of margin compression from these investments. Four consecutive misses means the market has been expecting improvement that has not arrived. CEO Martin De Los Santos on the call: “This performance reflects the strategic investments we have made consistently over the past several quarters, which are bearing fruit with increasing clarity.” The market is asking how long until it bears fruit in EPS.
Cloudflare beat on every metric: revenue $639.8 million (+34% YoY, beat $620.83M), non-GAAP EPS $0.25 (beat $0.23), Q2 guide $664-665 million (beats), and full-year guide $2.805-2.813 billion (beats $2.8B estimate). The numbers were unambiguously strong. The stock fell 18% after hours because alongside the results, Cloudflare announced the elimination of more than 1,100 employees — approximately 20% of its global workforce across all functions and geographies — to embrace what CEO Matthew Prince described as an “agentic AI-first operating model.”
The analytical significance extends beyond Cloudflare itself. A company that sells AI infrastructure — the edge network, security layer, AI inference tooling — is restructuring 20% of its human workforce to run on AI agents. The market read it as a signal that AI disruption is now operating inside the beneficiaries of the buildout, not just its traditional targets. This was a strategic choice: Cloudflare holds $4.16 billion in cash and generated $84.1 million in free cash flow in Q1. The beat was priced in; the layoffs were not.
CoreWeave reported Q1 2026 revenue of $2.08 billion — more than doubling year-over-year from $982 million and beating the $1.97 billion estimate by 5.5%. Revenue backlog reached $99.4 billion, the strongest bookings quarter in company history. CEO Michael Intrator: “We have reached hyperscale. We now have 10 clients committed to spending at least $1 billion on our products.” Nvidia bought an additional $2 billion in CoreWeave shares during Q1. Adjusted EPS loss of $1.12 missed the $0.90 estimate. The stock fell 9.3% after hours because Q2 guidance of $2.45-2.60 billion (midpoint $2.53B) trailed the $2.69 billion consensus, and management raised its 2026 capital expenditure forecast on component cost inflation.
The CoreWeave pattern echoes the session’s broader After Hours Earnings theme: extraordinary revenue growth, persistent profitability miss, market punishes the guidance. The $99.4 billion backlog and 10 billion-dollar-plus customers represent the structural bull case. The Q2 guide miss and rising capex are the near-term bear case. CoreWeave is borrowing heavily — ending Q1 with approximately $25 billion in debt — to build data centers faster than its hyperscaler peers, betting the AI infrastructure demand cycle justifies the leverage. At $99.4 billion in contracted backlog against $25 billion in debt, the bet is very large and execution risk is real.
Thursday’s session produced two historic market milestones before reversing both. The Dow Jones Industrial Average crossed 50,000 points intraday for the first time in its history — briefly — before the Iran Qeshm accusation and general profit-taking erased the gain to close at 49,596.97 (-313 points). Apple (AAPL) touched an all-time intraday high of $290.33, eclipsing the prior record of $288.62 set on December 3, 2025. Apple has gained 14.8% over the past month, outperforming the S&P 500’s 11.6%. The chip sector took meaningful profit: AMD, Micron, and Lam Research each fell approximately 4% as the market rotated out of names that had surged 15-20%+ over the prior two sessions. Citi gained 1% after announcing a $30 billion share buyback programme — the largest single buyback announcement in the US financial sector in 2026.
SanDisk (SNDK) — the S&P 500’s top-performing stock of 2026 at +429% year-to-date — fell approximately 3.5% Thursday after hitting a 52-week intraday high of $1,497 on Tuesday. Seagate (STX) declined 2.5% as insider selling by an EVP and director (May 4-5) added pressure on top of valuation concerns after a 677% twelve-month run. Both are part of the same AI infrastructure memory supercycle: hyperscaler AI buildout demands NAND flash and hard-drive storage at unprecedented scale, driving pricing power that made memory names the unexpected stars of the AI era. Thursday’s pullback is consolidation alongside AMD, Micron, and Lam Research — not a break in the thesis. Meta’s Zuckerberg directly attributed the company’s raised infrastructure capex forecast to skyrocketing memory pricing; that demand driver remains fully intact.
McDonald’s fell to its lowest level in over a year despite reporting a Q1 earnings beat — adjusted EPS $2.83 vs $2.74 estimate, revenue $6.52 billion vs $6.47 billion. The sell-off reflects a pattern familiar in this earnings cycle: a beat that was already priced in, combined with forward guidance language that suggested the consumer resilience the beat implies may not persist through Q2. The result was already down 3% from its Thursday morning high before the close. Vital Farms fell 20% on a surprise loss — EPS of -$0.03 versus the +$0.06 expected, and a cut to its full-year outlook. The egg producer’s results signal that feed cost inflation from the war-era commodity shock has not yet fully unwound at the agricultural input level, even as WTI falls toward $90.
A US Trade Court ruled against President Trump’s 10% global tariff on Thursday. This is the second major tariff defeat for the Administration — the Supreme Court previously struck down an earlier round of tariffs. The 10% global tariff was implemented as a revised framework after the Supreme Court ruling. The Trade Court decision is likely to be appealed and the tariff may be reinstated pending that process. However, if the ruling stands, it effectively removes the 10% baseline tariff on all US imports — a significant deflationary development that would lower input costs for US manufacturers and consumer goods prices. The story was somewhat lost in Thursday’s Iran noise but has structural macro implications that will be dissected over the weekend. This story is developing.
Friday morning (War Day 70) arrives with two simultaneous market-moving binaries. The first: the Qeshm accusation. A Pentagon response — confirming or denying the Iran strike on Qeshm Port — will arrive before or during overnight trading. If confirmed, WTI gaps higher, equities futures decline, and NFP becomes secondary. If denied or retracted, markets return to the Iran deal trajectory and NFP re-emerges as the primary driver. The second: Non-Farm Payrolls (8:30AM ET Friday, 49,000 consensus). The setup is constructive: ADP (Automatic Data Processing) private payrolls beat 109,000 on Wednesday, jobless claims beat 200,000 on Thursday, and the unconfirmed InvestingLive signal that Trump has seen the preliminary figure and is happy. A significant beat in a war-ending environment reads as labor resilience. Watch the hourly earnings component in Friday’s NFP — Thursday’s unit labor costs came in above estimates (+2.3% vs 1.6%), signalling wages are rising faster than productivity. If hourly earnings also beat, it confirms wage-driven inflation is accelerating and the Fed’s rate-cut timeline extends.
| Asset | Close | Day % | AH | Context |
|---|---|---|---|---|
| US INDICES · DOW 50K INTRADAY FIRST EVER THEN REVERSED · IRAN QESHM DROVE SESSION SELLOFF | ||||
| S&P 500 | 7,337.11 | -0.38% | Futures lower | Intraday ATH then reversed on Qeshm accusation |
| Nasdaq | 25,806.20 | -0.13% | Lower | Intraday ATH then reversed · Chip sector -4% |
| Dow Jones | 49,596.97 | -0.63% | Lower | Crossed 50,000 intraday (first ever) then reversed -313pts |
| ENERGY & COMMODITIES · OIL BOUNCED FROM SESSION LOW ON QESHM ACCUSATION | ||||
| WTI Crude | $94.81 | -0.28% | Watch Qeshm | Intraday low $91.73 (-3.52%) → bounced to $94.81 on Iran accusation |
| Brent Crude | $100.06 | -1.19% | Elevated | Back above $100 · Qeshm risk premium bid |
| Gold | ~$4,754 | +1.28% | — | Mid-morning confirmed $4,754.50 · Recovering from war-era low $4,524 |
| Silver | $82.07 | +6.17% | — | Outperforming gold · Broadening precious metals demand |
| SESSION WINNERS | ||||
| Rackspace (RXT) | — | +63% | — | AMD partnership · AI cloud for regulated/sovereign workloads |
| Datadog (DDOG) | ~$184.67 | +29% | — | Wednesday AH beat + guidance raise · AI infrastructure monitoring |
| Apple (AAPL) | ~$289-290 | ATH $290.33 | — | Intraday all-time high $290.33 · Prior ATH $288.62 Dec 3 2025 · +14.8% past month |
| Peloton (PTON) | ~$5.66 | +8.75% | — | Q3 rev $630.9M beat $618.3M · EBITDA $126.2M slight miss |
| Citi (C) | — | +1% | — | $30B share buyback · Largest US bank buyback of 2026 |
| SESSION LOSERS | ||||
| Planet Fitness (PLNT) | ~$42.89 | ~-28% | — | Full-year EPS growth guidance cut to 4% from 9-10% |
| ARM Holdings | ~$218.93 | -7.3% | Continued lower | Wed +13.6% fully reversed · Smartphone miss + royalty miss + supply constraint |
| Vital Farms (VITL) | — | -20% | — | Surprise loss -$0.03 vs +$0.06 est · Rev $187.2M beat · Cut full-year outlook |
| AMD | ~$404.53 | -4% | — | Profit-taking after +18.6% Wednesday session · Wed close $421.39 |
| Micron (MU) | — | -4% | — | Profit-taking · Chip sector rotation out |
| Lam Research (LRCX) | — | -4% | — | Profit-taking · Semiconductor equipment |
| SanDisk (SNDK) | ~$1,385 | -3.5% | — | Pulled back from Tue 52-wk high $1,497 · +429% YTD · S&P 500 top performer 2026 |
| Seagate (STX) | $766.80 | -2.5% | — | Insider selling May 4-5 · Valuation concerns · +677% 12-month |
| McDonald’s (MCD) | — | Year low | — | Beat Q1 EPS $2.83 vs $2.74 but sold off · Consumer outlook concern |
| AFTER HOURS · CONFIRMED RESULTS | ||||
| MercadoLibre (MELI) | — | Session | -7.2% AH | Rev $8.85B +49% beat · EPS $8.23 vs $9.37 miss · 4th consecutive EPS miss |
| Cloudflare (NET) | ~$223.81 | ~-11% | ~$183 -18% | Rev $639.8M +34% beat · EPS $0.25 beat · 1,100 layoffs (~20%) announced |
| CoreWeave (CRWV) | $128.84 | -6.6% session | $116.90 -9.3% | Rev $2.08B +112% beat · Backlog $99.4B · Q2 guide miss + capex rising |