S&P 500: 2.28% DOW: 0.27% NASDAQ: 4.20% 10-YR Yield: 4.30%
What Happened?
Six straight up weeks for the S&P. The Nasdaq closed Friday above 26,000 for the first time, the Dow finished modestly higher, and the Russell 2000 set its own fresh record midweek before pulling back. Two months after the war with Iran sent the VIX to 22 and oil to $111, the indexes are not just back, they are building distance.
The catalyst arrived Wednesday afternoon, when Axios reported that the U.S. and Iran were close to a 14-point memorandum that would include a moratorium on Iran's nuclear enrichment, a phased reopening of the Strait of Hormuz, and a U.S. lift of the naval blockade. Within 24 hours, Brent crude broke below $110, then below $105, then below $100 for the first time in over two months. WTI settled Thursday at $94.81, roughly a 16% move in five trading days. Fresh attacks in the strait late Thursday gave back some of the move, but the bigger reset had already happened.
For diversified portfolios, the broader read is that the market is already pricing the peace dividend, but it is doing so in pieces, not all at once. Equities have most of it. Yields have some of it (the 10-year fell 9 basis points on the week to 4.30%). Energy still has the war premium baked in for now. The portfolios that are working best in this stretch are the ones that owned the basket through April's noisier prints rather than tactically rotating around them; the ones that did not have to find their way back in this week, because they were never out.
The Jobs Report Came in at Twice the Forecast, and the Bond Market Liked It
April nonfarm payrolls: +115,000 vs. Dow Jones consensus of 55,000
Unemployment rate: unchanged at 4.3%
Wage growth: average hourly earnings +0.2% MoM, +3.6% YoY (cooler than March)
The key takeaway – Wall Street walked into Friday morning expecting roughly 55,000 jobs. The number printed at 115,000. Wage growth softened. Yields fell, not rose, on the print, because for the first time in months a strong labor reading came without a sting in its tail.
After March printed a chunky 178,000 jobs (revised this morning to 185,000), every economist on the Street had penciled in a moderation. The Dow Jones consensus was 55,000. Then 8:30 a.m. came and went and the Bureau of Labor Statistics released a number nearly double the consensus: 115,000 nonfarm payroll additions in April, with the unemployment rate holding steady at 4.3%. Two months in a row of upside surprises is the first back-to-back stretch of expectation-beating gains in nearly a year.
Health care, transportation and warehousing, and retail led the gains. Average hourly earnings rose just 0.2% on the month, softening from March's 0.3% pace. That is the cleanest possible combination for a Federal Reserve that has been waiting for evidence the labor market can stay healthy without re-igniting wage inflation. In a textbook "good news is bad news" environment, an upside surprise of this size would normally push yields higher as the market re-prices toward Fed hikes. Instead, the 10-year yield fell on the print, settling near 4.30%, and the soft-landing scenario the rally has been running on stayed intact.
Apple Quietly Signed Up to Make iPhone Chips at Intel, and the Foundry Pivot Just Got Real
The deal: preliminary agreement for Intel to manufacture Apple-designed chips at Intel's U.S. fabs; specific products undisclosed
Foundry customer roster: Tesla (April 23), Microsoft, Amazon, Nvidia/Corning (May 6), Apple (May 8)
Government role: per WSJ, Commerce Secretary Lutnick met repeatedly with Tim Cook, Jensen Huang, and Elon Musk to broker introductions; U.S. is Intel's largest shareholder
The key takeaway – Apple and Intel hammered out a preliminary agreement to manufacture some of Apple's chips on Intel's U.S. fabs, ending a year of speculation. Add Apple to Tesla, Microsoft, Amazon, and Nvidia, and Intel's foundry strategy is no longer a slide deck.
The Wall Street Journal reported Friday morning that, after more than a year of negotiations, Apple has agreed to have Intel manufacture some of the chips that power its devices. Intel will make the silicon to Apple's designs, the same fabless-meets-foundry arrangement Apple has had with TSMC for over a decade. The specific products and start date were not disclosed.
Six weeks ago, Intel's foundry business was the part of the bull case bears would not concede. Then came Tesla's commitment for the Terafab in Austin. Then Microsoft. Then Amazon. Then this week, Nvidia and Corning announced three new optical-tech facilities in North Carolina and Texas tied to Intel-adjacent supply chains. And now Apple. Five of the most important silicon buyers in the world have committed to Intel manufacturing capacity in roughly six weeks. The U.S. government, Intel's largest shareholder, has been actively brokering: per the WSJ, Commerce Secretary Lutnick met repeatedly with Tim Cook, Jensen Huang, and Elon Musk over the past year to pull each of them to the table.
From Around the Watercooler
AMD's Q1 2026 earnings report
Nvidia to invest up to $3.2 billion in Corning as part of massive optical fiber deal
‘Godspeed my friend’: Inside the final hours of Spirit Airlines
U.S. and Iran closing in on one-page memo to end war, officials say
Consumer sentiment falls to fresh record low
Disclousure:
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