An elusive peace... The Fed chair's last ride... Powell is leaving, but nothing is changing... 'Good' earnings haven't been good enough... Nvidia, the rest of the Mag 7, and the S&P 493...
Peace remains on ice...
Iran's foreign minister has spent the past few days flying around to nations that could facilitate a "deal" with the U.S. to end the war.
Abbas Araghchi visited third-party mediator Pakistan and Strait of Hormuz neighbor Oman over the weekend. Today, he was in Russia and met with Vladimir Putin, who is reportedly happy to take Iran's enriched uranium off its hands.
The White House evidently isn't interested in that being part of a deal.
Two months into the war in Iran, and the stalemate to end it continues. And the Persian Gulf's oil supply remains essentially cut off from the world.
Appropriately, oil futures moved higher again today. Brent crude, the international benchmark, topped $108 per barrel, its highest level in three weeks. West Texas Intermediate was up to $96 per barrel, a gain of about 2% in the past 24 hours.
The major U.S. stock indexes were little changed, with the benchmark S&P 500 up 0.1%.
I (Corey McLaughlin) will continue monitoring the developments from the war in Iran. The situation remains a potentially major risk to the market if 20% of the world's oil remains stalled and energy prices move even higher from here.
But, mercifully, the globe is still spinning, spring has sprung where we live, and we'll be watching a couple other stories developing this week that may drive market action, too...
At the Fed, it's time to say goodbye...
This is it... This week is all but officially Jerome Powell's last ride as Federal Reserve chair.
Pour one out for the man who once likened himself to a centuries-old sailor and astrologer "navigating by the stars under cloudy skies" when it comes to monetary policy... who infamously and repeatedly declared pandemic-era inflation "transitory"... and who evoked the ghost of Fed Chair Paul Volcker in the ensuing years, vowing to crush high(er) inflation that the Fed helped create with higher interest rates.
Even with his term ending as chair, Powell could stick around on the Fed board. He's eligible to stay on as a voting member until 2028. We might find that out on Wednesday, when his press conference follows this week's two-day meeting.
But this week will likely mark Powell's last hurrah in the spotlight, for two reasons.
First, President Donald Trump's nominee to be the next Fed chair, Kevin Warsh, made it through two hours of congressional testimony last week relatively unscathed.
And second (relatedly), the Department of Justice dropped its criminal case against Powell over costly renovations at the Fed's headquarters. Senator Thom Tillis of North Carolina threatened to hold up Warsh's confirmation over the issue. But Tillis now appears satisfied, making for a likely transition to Warsh when Powell's term is set to end as chair on May 15.
We don't expect any significant policy announcements from Powell in what should be his final press conference as Fed chair. The market doesn't expect any, either. The Fed's benchmark interest-rate range of 3.5% to 3.75% will stay right where it is... and might for a while...
Oh, the irony...
Powell was famously a target of criticism from the White House for not lowering interest rates sooner, and by more, over the past year. But even as Trump's replacement nominee is poised to take over, the market sees rates as even less likely to fall.
The shift has come because of recent inflation numbers tied to the war in Iran.
The Cleveland Fed, which runs an Inflation Nowcast indicator, expects the headline consumer price index ("CPI") and personal consumption expenditures ("PCE") index to rise around 3.6% for April, and 5.6% and 4.8%, respectively, for the second quarter of the year.
Recall the Fed's dual mandate of "stable prices" and supposed 2% inflation target, and "maximum employment." With inflation jumping and the unemployment rate at a relatively low 4.3%, it'd be hard for Warsh to justify cutting interest rates. He'd instantly lose credibility in the market.
Then again, he wouldn't be the first Fed chair to do so...
Perhaps Warsh will operate drastically differently in pursuit of the Fed's congressionally mandated goals. But in his testimony last week, he at least said the right things about Fed "independence," and said Trump "never asked me to predetermine, commit, fix, decide on any interest-rate decision."
To me, this line of public posturing lays the groundwork for Warsh holding rates steady as he steps into the Fed's big chair.
Treasury Secretary Scott Bessent also admitted publicly earlier this month that it's reasonable to think rates could remain on "pause" until further notice... given uncertainty around inflation. So we expect higher rates to continue as we move through 2026.
The market does too, with federal-funds futures traders not expecting a rate cut again until sometime in 2027.
This is also a big week for Big Tech...
Four of the "Magnificent Seven" – Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT) – are set to report their quarterly earnings, all after Wednesday's close. Apple (AAPL) reports on Thursday.
And the numbers will represent another measuring stick for the AI boom and everything associated with it. In recent days, that has included layoffs by the "hyperscalers" developing and spending big on AI...
Meta told its staff on Thursday that the company plans to cut 10% of its employees next month and close 6,000 open roles. And Microsoft is planning its first-ever voluntary buyout for up to 7% of its U.S. workforce.
When I hear the phrase "voluntary buyout," I have unfortunate flashbacks to recession times in a contracting industry – when I was in my early career in the newspaper industry during the great financial crisis...
Back then, newspaper chains were paying plenty of good reporters and writers to leave to cut costs.
Today, the tech companies that disrupted the print-news industry are behaving similarly...
Frankly, though, the last time Meta announced widespread layoff plans like these was during a "year of efficiency" in 2023. And it marked a turning point for Meta's stock as investors saw the plans as good for business. Will this be the same or different?
Generally, we'll be keen to see the quarterly results from Meta and the others this week and how the market reacts. But as we wrote earlier this month, early results tell us that for this market, "good" might not be good enough.
Semiconductor-equipment maker ASML (ASML) raised its full-year outlook and reported quarterly sales growth of 13%, but the stock fell 5% the day after it released earnings.
Taiwan Semiconductor Manufacturing (TSM), the world's largest chip manufacturer, posted a fourth straight quarter of record profits and 58% first-quarter growth, but its shares lost 3% after its earnings report.
The AI leaders have felt the weight of "high expectations" for several months now.
We saw the same in the previous earnings season...
Back in February, chipmaker Nvidia (NVDA) reported growing its revenue 73% year over year, yet the stock lost about 5% the next day. Nvidia reports earnings again on May 20.
Keep an eye on the Magnificent Seven. What happens this week will help show us if the market still sees booming AI growth... or is putting more weight in risks of a growth slowdown.
Heading into this week, it looks like the latter.
According to Wall Street estimates compiled by FactSet, the market expects Nvidia to be the biggest contributor to Magnificent Seven and S&P 500 earnings growth for the quarter. No big surprise there.
But earnings-per-share growth for the other six of the Mag 7 is only 6.4% versus almost 23% if you include Nvidia in the group. And that's also less than the growth projection of the "other" S&P 493, of 10% for the quarter.
Given Big Tech's weight in the S&P 500 Index, the results from Amazon, Alphabet, Apple, Meta Platforms, Microsoft, and the reaction to them, will dictate a good chunk of market direction.
New 52-week highs (as of 4/24/26): ABB (ABBNY), Applied Materials (AMAT), Advanced Micro Devices (AMD), Amazon (AMZN), Arm Holdings (ARM), Broadcom (AVGO), Alpha Architect 1-3 Month Box Fund (BOXX), Ciena (CIEN), Canadian National Railway (CNI), DXP Enterprises (DXPE), iShares MSCI Emerging Markets ex China Fund (EMXC), EnerSys (ENS), FirstCash (FCFS), Alphabet (GOOGL), Helmerich & Payne (HP), Intel (INTC), Liberty Energy (LBRT), Linde (LIN), Nucor (NUE), Nvidia (NVDA), Invesco Oil & Gas Services Fund (PXJ), Ryder System (R), ProShares Ultra Technology (ROM), Tenaris (TS), Taiwan Semiconductor Manufacturing (TSM), and State Street SPDR S&P Semiconductor Fund (XSD).
In today's mailbag, we have feedback on Dan Ferris' Friday essay and Saturday's Masters Series by Joe Austin of our corporate affiliate Chaikin Analytics... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Dan, great Digest today.
"I do think President Trump is a bit more nuanced than he sometimes appears to be. Of course, you've probably read 'The Art of the Deal' as I did back in the 80's. I think he's trying everything, short of blowing Iran to smithereens, to make a deal. And I'm grateful for that.
"Plus, I enjoyed your reference to 'Casino Royale.' That scene you mentioned sticks with me too. The 2006 film with Daniel Craig is my second-favorite Bond film after 'Goldfinger'!" – Subscriber Lou C.
"Other than electric power, something else that may interfere with rapid data center expansion is the tremendous amount of raw materials that would be required to build them. Copper, Silver, Rare Earths, Memory Chips, Processing Chips, Cement, Trained Labor Force, etc., present a barrier to rapid expansion.
"These resources are all currently strained, and the time to find and process these extra natural resources, just like building gas and nuclear power plants, could also be many years away.
"Meanwhile, I foresee a global bidding war for existing supplies of these strained resources. This would not only affect the global economy, it could put financial and moral pressures on families around the world!
"Are we ready to sacrifice an even lower standard of living in order to gain AI's benefits?" – Subscriber Lewis M.
All the best,
Corey McLaughlin
Baltimore, Maryland
April 27, 2026
