The S&P 500 fell 1.24% to 7,408.50, the Nasdaq dropped 1.54% to 26,225.15, and the Dow slid 1.07% to 49,526.17 — the biggest selloff since March as a global bond rout overwhelmed the AI rally. Despite Friday’s decline, the S&P 500 posted its seventh consecutive weekly gain. The 10-year Treasury yield surged above 4.5% to its highest since May 2025, Japan’s 30-year yield hit 4% (first since 1999), and UK 30-year gilts soared above 5.8% (28-year high). The SOX semiconductor index fell 4%, with Nvidia −4.4%, AMD −5.7%, and Intel −6.2%. WTI rose 4% to above $105 and Brent topped $109 as combative comments from Trump and Iran’s Foreign Minister raised doubts the ceasefire would hold. A drone attack sparked a fire at a UAE nuclear plant. Trump posted: “For Iran, the Clock is Ticking — TIME IS OF THE ESSENCE!” Iran’s Mehr news agency said the US offered “no tangible concessions.” The Trump–Xi summit concluded with few tangible results, though China agreed to cut some levies. Powell’s term ended Friday — Warsh is now Fed chair. Fed rate-hike odds for December jumped to nearly 40% from 13.6% a week ago. G7 finance chiefs meet in Paris Monday–Tuesday to discuss the bond selloff and global imbalances. Nvidia reports Wednesday.

The S&P 500 surged above 7,500 for the first time on Thursday as Trump hailed “extremely positive and constructive” talks with Xi, the US cleared Nvidia H200 chip sales to 10 Chinese firms, Cisco jumped 13% to a record, and Cerebras soared 68% in the year’s largest IPO. The Dow closed at 50,063 — just 0.3% from its all-time high. China agreed to buy 200 Boeing jets. Retail sales rose 0.5% but were propped up by a 21.2% surge in gasoline station spending. Oil held near $106 Brent. Breadth improved with advancers leading decliners. Applied Materials gave strong guidance after hours.

The S&P 500 rose 0.6% to a record 7,444.04 and the Nasdaq surged 1.2% to 26,402.34, both record closes, while the Dow slipped 0.1% to 49,693.20. The rally was extraordinarily narrow — Jones Trading noted that Google, Nvidia, Apple and Tesla accounted for 100% of the S&P 500’s gain, with the JT20 megacap index up 1.5% while breadth was negative. Six of the Magnificent Seven gained 1.4%–3.9%. PPI was a shocker: headline +1.4% monthly (largest since March 2022), +6.0% annually (largest since December 2022), far above estimates of +0.5% and +4.9%. Energy prices surged 7.8% with gasoline +15.6%. However, analysts noted the PCE-relevant PPI components were surprisingly benign. Kevin Warsh was confirmed as Fed chair 54–45 — the slimmest margin ever — replacing Powell whose term ends Friday. Boston Fed’s Collins said rate hikes could be needed if inflation persists. Trump landed in Beijing with Jensen Huang, Elon Musk and Tim Cook for the two-day summit with Xi. Brent fell 1.8% to $105.87. The 10-year yield was little changed at 4.467% after testing 4.5%. A 30-year auction was weak. Morgan Stanley raised its S&P 500 target to 8,000. Ford surged 13.2%. Alibaba jumped 8% on cloud/AI growth. OpenAI floated a global AI governance body modelled on the IAEA.

The rally finally hit a wall on Tuesday as a hotter-than-expected CPI print and a 3% plunge in chipmakers dragged the S&P 500 from its record, while oil surged past $102 on the continued Iran impasse. Headline CPI hit 3.8% year-on-year — the fastest since May 2023 — with core at 2.8%, both above estimates, boosting bets on a Fed rate hike in 2027. The SOX semiconductor index suffered its biggest intraday drop in over a year (−6.8%) before recovering to close −3%. Trump departed for Beijing saying trade, not Iran, would be the priority with Xi. Anthropic is raising $30 billion at a $900 billion+ valuation. The Australian budget confirmed trust tax at 30% from July 2028 and more protective CGT grandfathering than feared.

US equities finished the week at fresh records, with the S&P 500 rising 0.8% on Friday to cap a sixth straight weekly advance — the longest since 2024. The Nasdaq 100 surged 2.3% and the SOX semiconductor index gained 11% for the week, powered by Intel (+14% on a preliminary Apple chip-making deal) and broad AI momentum. US payrolls rose for a second consecutive month in April, the first back-to-back increase in nearly a year, with unemployment holding at 4.3%. However, consumer sentiment slumped to a fresh record low of 48.2 in early May. Brent settled at $101.29 (+1.2% on the day) but fell for the week as deal hopes swirled. Over the weekend, Trump rejected Iran’s counter-proposal as “totally unacceptable” after Tehran refused to dismantle nuclear facilities or suspend enrichment for 20 years. Netanyahu said the war is “not over” and urged the US to enter Iran and “take out” its uranium. Drones struck a cargo vessel in Qatari waters, and both the UAE and Kuwait intercepted hostile drones. Saudi Aramco warned it would take “several months” to normalise supply even if Hormuz reopens immediately. The Australian budget on Tuesday will reveal negative gearing restrictions, CGT indexation changes affecting all asset classes, and a 30% minimum trust tax. Trump–Xi summit May 14–15. ASX focus: CPI, Cisco, Applied Materials, and the budget.

Wednesday’s euphoria evaporated on Thursday as doubts resurfaced over the US–Iran peace proposal. The S&P 500 fell 0.4% to 7,335.66, the Dow dropped 0.6%, and oil whipsawed wildly — WTI briefly dipped below $90 before recovering to $95.47 as Iran’s state TV reported the US attacked an Iranian tanker and was “hit back by missiles.” An Iranian official called the US peace plan an “unrealistic” wish list, while Saudi Arabia and Kuwait quietly lifted restrictions on US military use of their bases. A $7 billion insider trading scandal in oil markets emerged. US job cuts surged 38% in April with tech leading layoffs. ASX 200 futures are down 152 points, or 1.7%.

Wall Street surged to fresh records on Wednesday as the US presented Iran with a one-page memorandum of understanding to end the war, sending oil tumbling nearly 8% and risk appetite roaring back. The S&P 500 jumped 1.5% to 7,363.68, the Nasdaq soared 2% to 25,838.94, and AMD’s 18.6% surge led a broad AI chip rally. Trump said a deal has a “very good chance” of happening and paused Project Freedom after Iran’s IRGC signalled “safe passage” through Hormuz. Brent crashed 7.8% to $101.33 while gold jumped 3%. The VIX fell to its lowest since before the war. ASX futures point to a 1% gain.

The US-Iran conflict intensified overnight as Trump launched “Project Freedom” to escort vessels through Hormuz, triggering Iranian missile fire on US destroyers and a drone strike on the UAE’s Fujairah oil port. US Central Command said it successfully guided two American-flagged ships through the strait while repelling attacks and destroying small boats. The S&P 500 fell 0.4% to 7,201.75 with all 11 sectors except energy in the red, the Dow dropped 1.1% to 48,941.90, and the Nasdaq slipped 0.2% to 25,067.80. Brent crude surged 5.4% to $114.03 while WTI jumped 3.3% to $105.26. Bond yields spiked sharply — 10-year Treasuries +7bp to 4.44%, 30-year yields above 5% for the first time since July. Gold fell 2.1% to $4,517.21. In a stunning escalation, China ordered its companies to defy US sanctions on Iranian-linked refiners, issuing an unprecedented blocking order ahead of the Trump–Xi summit. Morgan Stanley raised hyperscaler AI capex forecasts to $800 billion for 2026 and $1.1 trillion for 2027. Q1 earnings growth has doubled to 27.8% from 14.4% at the start of April. ASX 200 futures fell 70 points to 8,645, with the RBA expected to hike 25bp to 4.35% at 2:30pm AEST.

Key Takeaways

01 The S&P 500 fell 0.4% to 7,201.75, the Dow dropped 1.1% to 48,941.90, and the Nasdaq slipped 0.2% to 25,067.80 as all sectors except energy declined, while KOSPI surged 5% in Asia and Bitcoin briefly reclaimed $80,000.

02 Trump’s “Project Freedom” drew Iranian missile fire on US destroyers, a drone strike on the UAE’s Fujairah oil hub (three injuries), and US forces destroyed seven Iranian small boats — two US merchant ships transited the strait successfully.

03 Brent crude surged 5.4% to $114.03 and WTI jumped 3.3% to $105.26, while 30-year Treasury yields breached 5% for the first time since July, 10-year yields rose 7bp to 4.44%, and gold fell 2.1% to $4,517.21.

04 China issued an unprecedented blocking order telling companies to defy US sanctions on Iranian-linked refiners including Hengli Petrochemical, escalating the US–China confrontation weeks before the Trump–Xi summit.

05 Morgan Stanley raised hyperscaler AI capex forecasts to $800B for 2026 and $1.1T for 2027; Q1 S&P 500 earnings growth has nearly doubled to 27.8% — the highest since late 2021 — while Palantir guided for 71% full-year revenue growth.

06 ASX 200 futures fell 70 points to 8,645, with the RBA expected to deliver a third consecutive 25bp hike to 4.35% at 2:30pm AEST, and Westpac results, AMD earnings and April US non-farm payrolls due this week.

US equities surged to close out April with the S&P 500’s best month since November 2020, gaining 10.4% to close above 7,200 for the first time. GDP data showed AI-driven business investment powering the economy through the Iran war headwinds, while Japan intervened in currency markets for the first time in two years, sending the yen surging 2.5%. The S&P 500 rose 1% to 7,210.24, the Dow jumped 1.6% to 49,651.95, and the Nasdaq gained 0.9% to 24,892.31. After hours, Apple reported record revenue but shares dipped 0.7%. Oil retreated from a $126 intraday spike to settle at $105.35 WTI. The ECB and BOE both held rates steady.

A divided Federal Reserve held rates steady in what was Jerome Powell’s final meeting as chair, while Brent crude surged 7% toward $120 a barrel and four Mag 7 companies delivered a mixed earnings bag that rattled after-hours trading. The S&P 500 was flat at 7,136.52, the Nasdaq edged up 0.6%, but the Dow fell 0.6%. After the bell, Alphabet jumped 7% on blockbuster cloud growth, but Meta slid 7% after raising capex guidance to $125–$145 billion, Microsoft’s Azure growth barely met estimates at 39%, and Amazon fell 2.6% despite record profits as capex surged to $44.2 billion. Money markets abandoned rate-cut bets and began pricing in a possible 2027 hike. ASX 200 futures are down 53 points.