The market closed the book…. Then another chapter was written just after the close.
Yesterday’s session was fairly straightforward. |
Stocks drifted lower through the afternoon as headlines out of the Middle East moved in the wrong direction. Iran pushed back on negotiations, uncertainty picked up again, and by the close all three major indexes were down roughly 0.6%. |
Oil moved higher. Yields followed. The dollar strengthened. |
It was a clean reversal of the setup that had supported risk just days earlier. |
Then, after the bell, the narrative shifted. |
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⚡ Closing Bell:
→ Dow Jones: ▼ −0.59% to 49,149.60 › Slipped into the close as geopolitical uncertainty picked up
→ S&P 500: ▼ −0.63% to 7,064.02 › Pulled back after early stability faded
→ Nasdaq: ▼ −0.59% to 24,259.96 › Gave back ground as rates moved higher
→ Russell 2000: ▼ ~0.6% › Broader risk followed large caps lower
Energy was the only sector that finished higher, tracking the rebound in crude.
Real estate and utilities lagged as yields pushed higher, tightening financial conditions again.
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Macro Moves:
→ 10-Year Treasury Yield: ▲ ~4.31% › Moved higher as strong retail sales reinforced a “no rush to cut” rate outlook
→ 2-Year Treasury Yield: ▲ ~3.80% › Followed higher as policy expectations firmed
→ U.S. Dollar (DXY): ▲ ~98.5 › Strengthened as risk appetite softened
→ Bitcoin: ▼ ~$75K › Pulled back as macro turned less supportive
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❗❗❗ Looking Ahead:
The temporary extension keeps the door open, but it doesn’t answer the underlying question of what a longer-term agreement looks like — or if one materializes at all.
At the same time, earnings begin to take over. |
Tesla, Boeing, and AT&T report next, and those results will start to matter more as macro signals remain mixed. |
Because right now, the market isn’t lacking catalysts. 🙂 |
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#TRUTH:
❗❗❗ ❝ We are too quick to believe that the present is permanent. ❞
~ Nassim Nicholas Taleb |
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Just a quick question…👇 |
Poll of the day:Is the market too optimistic about the ceasefire? |
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Timeline Shifted |
After a weak session that pushed all three major indexes lower, the market got a late update: the U.S. extended the current ceasefire with Iran. |
That was enough to change the tone. |
S&P 500 and Nasdaq futures rose about 0.4%, with Dow futures up roughly 0.3% in after-hours trading. |
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It’s a modest move. But the direction matters. |
Because the setup hasn’t actually improved - the extension buys time, not certainty. |
What changed is the immediate risk. |
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$60 Billion… and a Disclaimer |
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SpaceX made two very different statements on Tuesday. |
One about where it’s going. The other about what might not work. |
On one side, the company said it has secured an option to acquire AI coding startup Cursor for $60 billion, or alternatively commit $10 billion to a strategic partnership. |
That’s not a small move. |
It’s a direct push into one of the few areas in AI that’s already generating real demand — tools that automate software development. The logic is straightforward: combine Cursor’s developer reach with xAI’s compute infrastructure and compete more directly with OpenAI and Anthropic. |
It’s a scale bet. |
On the other side, buried in its pre-IPO filing, SpaceX outlined a very different reality. |
Some of its most ambitious projects — including space-based AI data centers and broader in-orbit industrial systems — rely on technologies that are still unproven and may not become commercially viable. |
That’s standard language for a filing. |
But the contrast stands out.
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Fuel Changed the Math. |
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United’s first Q1 came in ahead of expectations. |
The outlook didn’t. |
The airline reported $1.19 in adjusted EPS on $14.6 billion in revenue, both above consensus. |
On the surface, that’s a clean result. But the reaction wasn’t about the quarter. |
It was about fuel costs. |
United’s fuel expense rose 12.6% year-over-year to $3.04 billion, and the company lowered its full-year profit guidance to a range of $7 to $11 per share, down from $12 to $14. |
That’s a meaningful reset. |
Q2 expectations also came in below estimates, with guidance implying that higher fuel costs will only be partially offset in the near term. |
The assumption is that pricing catches up over time. |
→ 40–50% of fuel costs recovered in Q2
→ 70–80% in Q3
→ Up to full recovery by Q4 |
That’s the plan. The gap is what happens until then. |
So, demand isn’t the issue. Costs are.
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Gains & Pains: |
Gains:
➝ Energy: Exxon (XOM ▲), Chevron (CVX ▲) › Moved higher as crude pushed back above $90, reintroducing the supply risk narrative |
➝ Healthcare: UnitedHealth (UNH ▲ +7.01%) › Gained after beating expectations and raising full-year guidance |
➝ Speculative / High Beta: POET Technologies (POET ▲ +19.44%), Avis (CAR ▲ +17.28%) › Continued to attract momentum flows, with volume driving outsized moves |
➝ EV / Strategic: Lucid (LCID ▲ +5.63%) › Climbed after a filing showed Uber increasing its stake |
😬 Pains:
➝ Mega Cap Tech: Apple (AAPL ▼ −2.50%) › Slipped following leadership transition news, adding to broader tech weakness |
➝ Industrials: GE Aerospace (GE ▼ −5.55%) › Fell after leaving guidance unchanged, highlighting how elevated expectations have become |
➝ Airlines: Frontier (ULCC ▼ −12.27%), Alaska (ALK ▼ −4.80%) › Dropped as higher oil reversed the tailwind seen last week |
➝ Consumer / Analysts: Cava (CAVA ▼ −1.14%) › Declined after receiving its first “sell” rating, introducing a shift in sentiment |
➝ Capital Markets: AXT (AXTI ▼ −4.96%) › Fell following a $550M stock offering |
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Escapes: |
White Sands National Park 📍 New Mexico 🇺🇸 |
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Commodities Check : ✔️ |
→ WTI Crude (CL): ▲ +2.81% to ~$92.13/bbl › Rebounded as Iran rejected talks, bringing supply risk back into pricing |
→ Brent Crude (BRN): ▲ +3.14% to ~$98.48/bbl › Pushed higher as geopolitical uncertainty resurfaced |
→ Gold (Spot): ▼ −2.95% to ~$4,677/oz › Dropped as the dollar strengthened and yields moved higher |
→ Corn (CBOT): ▲ +0.33% › Moved higher as export demand picked up, with confirmed sales and rising barge bids supporting prices |
→ Soybeans (CBOT): ▲ +0.63% › Firmed alongside corn as Gulf demand improved and farmer selling remained limited |
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The stinger: |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
This publication is for informational and educational purposes only. It does not constitute investment, trading, or financial advice and is not based on any individual’s financial circumstances, goals, or risk tolerance. We are not registered investment, stock, or commodity advisors. Always consult a licensed financial professional before making investment decisions. |
Information provided in this newsletter (and on any affiliated website) is obtained from sources believed to be reliable; however, accuracy and completeness cannot be guaranteed. Opinions expressed are those of the authors and are subject to change without notice. |
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* Source: Sherwood News |
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