General Market News

Kevin Warsh, President Trump's nominee for Federal Reserve chair, told the Senate Banking Committee he wants to significantly reduce the Fed's $6.7 trillion balance sheet, arguing it benefits Wall Street over Main Street and forces higher short-term interest rates. Warsh said he would coordinate with the Treasury Department to shrink holdings 'slowly and deliberatively,' though he provided few specific details on implementation. Analysts view any balance sheet reduction as a long-term project that would challenge the Fed's current interest rate management system.

• The Fed's balance sheet grew from under $1 trillion before 2007 to a peak of $9 trillion in 2022; it currently stands at $6.7 trillion and could reach $10 trillion by 2035 under current projections
• Warsh believes a smaller balance sheet would allow the Fed to maintain lower interest rates, better control inflation, and strengthen the economy while reducing the central bank's involvement in politics
• Analysts expect Warsh would avoid outright asset sales in favor of gradual reduction, potentially paired with easing liquidity regulations to reduce bank demand for reserves

Sen. Thom Tillis (R-N.C.) is blocking confirmation of Kevin Warsh as Federal Reserve Chair until the Justice Department ends its criminal investigation into current Fed Chair Jerome Powell. The probe concerns Powell's congressional testimony about a $2.5 billion renovation of Fed headquarters buildings in Washington, D.C.

• Tillis called the DOJ investigation 'bogus' and said it could be dropped in 'five minutes,' urging immediate action to allow Warsh's confirmation to proceed
• Powell confirmed the unprecedented criminal investigation on Jan. 11, which relates to his June 2025 testimony denying luxury features in the $2.5 billion Fed building renovation
• The Fed renovation is self-funded through interest on government securities, not taxpayer money, with completion expected in fall 2027 and occupancy in March 2028

Fed chair nominee Kevin Warsh survived a contentious Senate Banking Committee hearing where he faced questions about his independence from President Trump and his finances, but his plan for 'regime change' at the Federal Reserve remained largely unchallenged. Warsh argues the Fed has lost credibility with markets and the public since the financial crisis, requiring a fundamental overhaul of how the institution operates. His reform agenda includes eliminating forward guidance, changing inflation measures, and rolling back the Fed's heavy involvement in the economy.

• Warsh plans to dramatically reshape Fed operations, potentially ending regular press conferences, eliminating the 'dot plot' forward guidance tool, and moving away from the core PCE inflation measure the Fed currently uses
• He attributes high long-term interest rates (mortgages, credit cards) to the Fed's loss of market credibility, dating back to its $6.7 trillion balance sheet from quantitative easing programs he opposed since leaving the Fed in 2011
• Former Fed Chair Janet Yellen expressed skepticism that Warsh could persuade the 11 other FOMC voting members to support his changes, though Warsh said he welcomes a 'good family fight' and dissent may actually help make his case for reform

GE Vernova is set to report Q1 earnings on Wednesday, with analysts expecting $1.95 per share on $11.1 billion in revenue, representing 15% year-over-year growth. The stock has surged 217% in the past year, tripling in value, driven by surging demand from AI data centers requiring massive power infrastructure. Investors will focus on order flow momentum and the impact of the recently completed Prolec acquisition targeting AI energy needs.

• GE Vernova disclosed over $2 billion in electrification orders in 2025 directly tied to data centers, with the company sold out for years as AI workloads drive unprecedented power demand
• The company completed its acquisition of Prolec in February, adding transformer manufacturing capabilities for data centers and expected to be 'immediately accretive' to 2026-28 guidance
• For full-year 2026, Vernova expects revenue of $44-45 billion (up 19% at midpoint) with expanding margins, though offshore wind remains a drag and Middle East security concerns have emerged

Federal Reserve Governor Christopher Waller proposed a significant restructuring of the Fed's 12 regional banks, advocating for centralization of key business operations including human resources, finance, procurement, and technology. Currently, each regional bank manages these functions independently, but Waller argues the system needs to shift from a 'Bank mindset' to a 'System mindset' with national lines of business.

• Waller wants to consolidate operational functions currently managed separately by each of the 12 regional Federal Reserve banks into centralized national business lines
• The proposal aims to move away from individual Reserve Banks managing operational infrastructure independently and toward a more unified system-wide approach
• Waller made no comments on economic outlook or interest rates as Fed officials are in the blackout period before next week's monetary policy meeting

The Nasdaq Composite completed a historic 13-day winning streak in April 2026, its longest since January 1992. The rally was particularly powerful, with the index surging over 10% during the streak, blowing past 22,000 and 23,000 milestones in rapid succession. Historical data suggests the Nasdaq typically continues to perform well after such extended winning streaks, especially when accompanied by significant percentage gains.

• The 13-day streak featured substantial gains including a 3.8% surge on March 31 and six additional 1%+ moves, marking the Nasdaq's best 13-day start to a quarter in history outside of the COVID rally in Q2 2020
• Major semiconductor stocks led the rally: AMD posted its longest win streak since 2005, adding over $101 billion in market cap and hitting a record high of $281.05, while Intel and Nvidia had 9 and 10-day streaks respectively
• Historical analysis shows that after 11+ day streaks with 10%+ returns, the Nasdaq posted positive one-month returns in all five prior instances, averaging 5.6% gains with a range of 3.3% to 8.2%

SpaceX is meeting with Wall Street analysts this week as it moves toward a planned IPO as early as June, seeking to raise $75 billion at a valuation of $1.75 trillion or more, which would make it the largest IPO in history. A confidential SEC filing reveals the company ended 2025 with $24.8 billion in cash and $92 billion in total assets, though it posted a $4.94 billion loss on $18.67 billion in revenue last year.

• SpaceX plans dual-class stock structure with Class B shares carrying 10 votes each, allowing Musk and insiders to maintain control despite public ownership
• The company's 2025 financial loss of $4.94 billion (vs. $791 million profit in 2024) reflects heavy spending on AI and integration of xAI and X social media, though Starlink generated $4.42 billion in operating profit
• Analyst meetings include tours of the Starbase launch facility in Texas and Colossus data center in Tennessee, with President Gwynne Shotwell receiving $85.8 million in total compensation last year

Sullivan & Cromwell, a prestigious Wall Street law firm, apologized to a federal bankruptcy judge for submitting a court filing containing AI-generated 'hallucinations' including fabricated case citations and inaccurate legal sources. The errors were caught by rival law firm Boies Schiller Flexner in a bankruptcy case related to Prince Global Holdings. The firm acknowledged its AI usage policies were not followed and submitted a corrected filing.

• Andrew Dietderich, co-head of Sullivan & Cromwell's global restructuring group, apologized to U.S. Bankruptcy Court Chief Judge Martin Glenn and thanked Boies Schiller Flexner for identifying the errors
• The firm admitted its 'comprehensive policies and training requirements' for AI tools were not followed, and secondary review processes failed to catch the inaccurate AI-generated citations
• U.S. judges have sanctioned lawyers in dozens of cases for using AI without proper vetting, though AI use is not prohibited if attorneys ensure accuracy of submissions

Algorithmic Investment Models' Decathlon portfolios delivered one of their strongest quarters in Q1 2026, with all three risk levels posting positive returns amid market volatility driven by conflict in Iran and shifting market dynamics. The firm argues that the era of 'easy beta' from U.S. large-cap growth stocks is ending, as their tactical strategies increasingly favor energy, natural resources, and international equities over the 'Magnificent 7' tech stocks that dominated recent years.

• All three Decathlon portfolio risk levels posted positive Q1 2026 returns (Growth: high single digits, Moderate: mid-single digits, Conservative: low single digits) while most investable assets had modest negative returns
• Since end of 2024, international stocks (MSCI ACWI ex US) have outperformed the S&P 500 by 27.95% to 10.66% through March 31, 2026, outperforming in all but one of the past five quarters
• The firm identifies multiple emerging risks including wealth effects from potential AI capital cycle deterioration, rising mortgage rates impacting housing markets, inflationary pressures from the Iran conflict, and potential instability in the private credit sector

Q1 2025 earnings season has begun with strong results from major banks and semiconductor companies, driving the S&P 500 toward a sixth consecutive quarter of double-digit earnings growth projected at 13.2%. CEO confidence has reached record highs, with the LERI uncertainty index falling to 55, its lowest Q2 reading in eight years, suggesting management teams have strong visibility despite ongoing geopolitical tensions.

• Big banks showed bifurcation: Goldman Sachs reported 48% surge in investment banking fees with $17.55 EPS, while JPMorgan and Bank of America trimmed full-year Net Interest Income guidance despite healthy consumer spending
• Semiconductor sector demonstrates 'AI Supercycle' momentum: TSMC posted record Q1 revenue on 2nm/3nm chip demand, while ASML raised 2025 sales guidance to €40 billion, driven by insatiable infrastructure demand
• Information Technology sector leads earnings expansion with projected 45% growth, while blended S&P 500 revenue growth reached 9.9%, the highest top-line growth rate since Q3 2022

US stocks rose Tuesday morning with the Dow jumping 310 points as investors focused on strong earnings and hopes for a peace deal despite ongoing tensions with Iran. Oil prices remained relatively stable with Brent crude at $95.36 per barrel, while President Trump indicated he has no plans to extend a Wednesday cease-fire deadline and is prepared to resume military action.

• The Dow Jones rose 0.6% (310 points) while the S&P 500 and Nasdaq each gained 0.1%; oil prices were roughly flat with Brent at $95.36 and WTI at $87.34 per barrel
• National average gasoline prices fell slightly to $4.02 per gallon but remain at a 30% premium compared to pre-war levels
• President Trump stated he expects to resume bombing Iran after the Wednesday cease-fire deadline, saying he doesn't want to be 'rushed' into a peace deal despite political pressure

JPMorgan announced that AI stocks have regained momentum heading into first quarter earnings reports, marking the highest investor interest in AI stocks since the first half of 2025. The positive outlook comes after many AI stocks experienced pullbacks in early 2026 due to increased capital spending by hyperscalers and tech giants including Alphabet's Google.

• JPMorgan reports investor interest in AI stocks has reached levels not seen since first half 2025
• AI stocks previously pulled back in early 2026 amid concerns over capital spending increases by major tech companies and hyperscalers
• The renewed momentum is occurring as companies prepare to report first quarter earnings results

The Dow Jones rose 220 points (0.45%) on Tuesday as AI-driven optimism and strong corporate earnings offset geopolitical tensions with Iran. JPMorgan raised its S&P 500 year-end target citing AI growth, while 87.5% of S&P 500 companies reporting earnings beat expectations, well above the historical 67.4% average.

• Amazon announced plans to invest up to $25 billion in AI firm Anthropic, reinforcing Big Tech's commitment to aggressive AI spending and supporting market sentiment.
• UnitedHealth Group surged over 8% after beating earnings and raising full-year profit guidance, with healthcare peers CVS and Humana also posting gains of 1.7% and 3.6% respectively.
• Markets remain volatile due to US-Iran tensions and uncertainty around ceasefire negotiations, though oil prices edged lower and Fed chair nominee Kevin Warsh emphasized central bank independence in confirmation hearings.

The Federal Reserve's high interest rates are making borrowing costly for Americans, particularly affecting mortgages, car loans, and credit cards, which keeps life feeling unaffordable despite cooling inflation. Kevin Warsh, President Trump's Fed chair nominee, faces a Senate confirmation hearing Tuesday amid political tensions, including a DOJ probe into current Chair Jerome Powell and rising geopolitical risks from Iran that could complicate future rate cuts.

• Sen. Thom Tillis may block Warsh's nomination in committee unless the Justice Department drops its investigation into current Fed Chair Jerome Powell, whose term ends next month
• High borrowing costs are adding hundreds of dollars to monthly payments even when underlying asset prices remain stable, creating political pressure on Trump's affordability pledge ahead of midterm elections
• Rising oil prices from tensions with Iran are reviving inflation concerns, potentially limiting how quickly the Fed can cut rates and prolonging expensive borrowing costs for households

President Donald Trump expressed surprise at the stock market's resilience during the Iran conflict, stating he had expected the Dow Jones Industrial Average to decline by 20%. The market's comeback defied the President's expectations amid geopolitical tensions.

• Trump anticipated a 20% drop in the Dow Jones Industrial Average due to the Iran conflict
• The stock market demonstrated unexpected resilience, recovering despite ongoing geopolitical tensions
• The President's public surprise highlights the market's ability to withstand major geopolitical risks

U.S. retail sales jumped 1.7% in March, exceeding the 1.4% forecast, primarily driven by surging gasoline prices linked to the U.S.-Israeli conflict with Iran and higher auto sales from manufacturer incentives. The strong headline figure masks concerns about consumer health, as rising fuel costs strain household budgets and consumer sentiment hit a record low in April.

• Gasoline prices soared 24.1% in March as the Iran conflict pushed global oil prices up more than 30%, adding an estimated $857 to Americans' average annual gasoline costs
• Core retail sales (excluding autos, gas, building materials, and food services) rose a more modest 0.7%, suggesting underlying consumer spending growth slowed from Q4's 1.9% annualized rate
• Tax refunds averaged $351 higher through March 27 versus 2025, below Treasury expectations of a $1,000 increase, potentially limiting consumers' ability to absorb higher fuel costs

D.A. Davidson initiated coverage of Reddit stock with a buy rating and a $200 price target, citing the social media platform as significantly under-monetized compared to peers. Reddit stock has fallen 28% year-to-date and over 40% from its late 2024 record high of $282.95, despite rallying more than 600% in the 18 months following its March 2024 IPO. The company is set to report first quarter earnings on April 30.

• Analysts believe Reddit remains 'incredibly under-monetized' relative to peers, with growth opportunities from advertising, data licensing to AI companies like Google and OpenAI, and broader user adoption
• Reddit stock climbed back above its 50-day exponential moving average last week for the first time since January, though it remains well below its 200-day moving average
• The stock holds an IBD Composite Rating of 63 out of 99, below the 90+ threshold typically associated with best-performing growth stocks

US stock futures pointed to a higher open on Tuesday, led by the Dow Jones up 0.6%, as strong earnings from UnitedHealth and defense contractors offset concerns about stalled US-Iran peace talks. Investors await a Senate confirmation hearing for Fed chair-designate Kevin Warsh and monitor developments ahead of Wednesday's Iran ceasefire deadline.

• UnitedHealth reported earnings that beat expectations despite being lower than last year, while defense stocks GE Aerospace, RTX, and Northrop Grumman posted mixed but generally positive results
• Oil markets remain steady as Iran reportedly has not sent a delegation to Pakistan for proposed peace talks, with uncertainty over whether US Vice President JD Vance will arrive for Wednesday negotiations
• Kevin Warsh's Senate confirmation hearing is expected to emphasize central bank independence while acknowledging that political input on interest rates will not compromise Fed autonomy

Tech stocks rallied globally despite ongoing U.S.-Iran tensions and an expiring ceasefire on Wednesday, with Asian markets hitting new highs driven by AI enthusiasm. Amazon's announcement of up to $25 billion investment in AI startup Anthropic boosted sentiment as U.S. tech earnings season begins. Markets are balancing optimism about peace talks with uncertainty over the ceasefire's durability and oil shock implications.

• South Korea's Kospi reached a new high since the Iran war began, with SK Hynix hitting an all-time high; Amazon announced up to $25 billion investment in Anthropic following a $50 billion OpenAI investment
• Apple named hardware chief John Ternus as next CEO to succeed Tim Cook in September, with Cook staying as executive chairman after boosting Apple's market value by $3.6 trillion over 15 years
• Fed Chair nominee Kevin Warsh faces Senate confirmation hearing today, while U.S. March retail sales data will provide insight into consumer behavior during the first month of the Iran war and oil shock

US stock index futures rose on Tuesday, with Dow futures climbing 270 points, driven by strong AI-related sentiment and solid corporate earnings. J.P. Morgan raised its S&P 500 year-end target to 7,600, citing AI optimism and 22% projected EPS growth to $330 for 2026. Investors are focusing on tech earnings momentum despite geopolitical tensions and uncertainty around the Fed chair confirmation hearing for Kevin Warsh.

• S&P 500 companies are reporting blended Q1 earnings growth of 13.2%, the sixth consecutive quarter of double-digit gains, with 88% beating EPS estimates versus a 78% five-year average
• AI capital expenditure is forecast to surge 58% year-over-year to $775 billion by year-end 2026, reinforcing bullish sentiment in tech stocks
• Apple shares dipped 0.6% premarket after CEO Tim Cook announced he will transition to Executive Chairman, with hardware chief John Ternus taking over as CEO