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Ceasefire headlines; relief rally in chip and AI stocks (0:30) Oil down; stock slide context (2:30) Data murky, but not panic inducing (3:30) Palantir and Intuit drop (9:17)
Transcript
Rena Sherbill: Brian Stewart, welcome back to another week of Wall Street Roundup.
Brian Stewart: Great to be here.
Rena Sherbill: What are you thinking about these days as Tax Day approacheth?
Brian Stewart: That’s right. Tax day is coming up. I think Iran is probably top of the mind or Iran, I suppose, depending on where you brought up. So this week we saw the ceasefire be agreed to.
With that, we saw a rally in chip and AI stocks, basically a relief rally risk back on kind of thing. So we saw Intel up about 22 percent. We saw Micron (MU) up about 13%.
This is over the last five days. Broadcom (AVGO) up about 20%. If you look at the (XLK), which is the broad tech ETF, that was up 3 % on Wednesday when the ceasefire was announced. That’s the third biggest one day gain of 2026. One of the only days that was a higher jump for that was on March 31st, which was also a rally on peace hopes.
So you see the market very tied to what’s going on in the geopolitical space. It’s tough because different headlines come out all the time. I think the most common characterization of the ceasefire is fragile. There’s a lot to be decided. Like the Strait of Hormuz is still closed. There’s still conflict between Hezbollah and Israel, which kind of threatens to break the peace. So remains to be seen what’s going to happen.
But for this week anyway, the market is taking a positive outlook that we’re taking steps forward towards towards peace.
Rena Sherbill: Yes, amen to that. I know I’m always plugging Investing Experts at some point during these conversations, but I am not doing it mindlessly. There is value to be had, I believe, and many others too. Just a slew of episodes this week about the tech space and how to think about that, because I think there is a lot to parse through over there as we’ve seen these volatile jumps and slumps in that sector.
Speaking of which oil sector next, oil stocks?
Brian Stewart: Yeah, I mean, that’s the other side of the trade, right?
So you saw tech up as the kind of risk on trade comes back and you saw oil prices down and then the oil stocks down as well. So ExxonMobil (XOM) was down about 5 % over the past week. You see Chevron (CVX) down about 6%. However, you have to kind of put that in context.
ExxonMobil is still up 54 % over the past year. I think it’s up a little bit more than 20 % for the year to date. Chevron showing a similar pattern up 41 % over the past year.
Crude oil (CL1:COM) dropped 15 % on Wednesday with the ceasefire coming out a little bit more than that. But it’s still trading around $98. It was at roughly 57 as we started the year. So still up about 70 % year to date.
We’re far from returning to where normal was as we started the year. We had the inflation data come out today, the CPI came out, it showed a significant rise in energy prices. Energy prices were up about 11 % from February to March. And that was thanks to about a 21 % increase in gasoline prices.
But overall, the inflation data was high, but not enough to really sour the market. So on a headline basis, CPI was up about 3.3 % from last year. If we look at the core, it was up 2.6%. 3.3%, even with all the higher energy prices, isn’t that far off of what we’ve been seeing lately anyway. 2.6 % is sort of in the comfortable range. I mean, it’s still above the 2 % Fed target, but the market has sort of gotten used to things in more of the 2.5%, 2.6 % range.
I think it’s just in line with the kind of inflation that we’ve been seeing lately. So elevated, but not panic inducing.
So the market kind of took that in stride. If we look at the bigger picture of the Fed, pretty much locked in at this point that we’re going to get no change in April. Market trading is showing a 98 % trade, a chance that we’ll get no change with a very fractional chance that there be higher rates in April.
If you look to the end of the year, there’s about a 70 % chance of no change. That includes a 1 % chance of higher rates and a 29 % of lower rates. Just to put that in context, about a week ago, so before the ceasefire, before the latest inflation data, there was an 80 % chance of no change, including a 7 % chance of higher rates.
Basically what you’re seeing is people starting to believe again in the possibility that sometime during 2026 we’re going to lower rates is still a minority kind of position at this point, but it is a meaningful probability now when before there was, a shadings towards, maybe being higher rates later.
You’re seeing the market starting to get kind of a more optimistic view of how things might play out over the rest of the year, but obviously, we’re very headline driven.
We’ve got PPI coming out next week. See whether that confirms the CPI report. We have the ongoing conversations in the Middle East, so we’ll see how those turn out. So right now, the market’s sort of taking things in stride, but there’s always headline risk going forward.
The latest jobs data came out last week, came out on the market holiday. So you and I didn’t get to talk about it, but it was a pretty good report. The payrolls were up more than expected. Unemployment rate ticked down to 4.3%.
It’s been kind of a habit of these jobs reports where you get a couple of stinkers in a row and then you start to get worried about the job market and then you’ll get a good one that kind of wipe away the sweat from your brow and move on.
Again, the jobs market remains murky, but not panic inducing. This is the same as I said about the inflation data. So the economic news is in this sort of low grade anxiety causing situation, but not really in a situation where you sort of raise the white flag and start to really get concerned about recession risk.
So we’ll see. I mean, we’ve talked about before how there’s kind of a structural change going on with AI and we’ve seen layoffs at places like Amazon where they’re starting to think that they need fewer employees to do the same tasks because of the new technology that’s coming up and whether or not how that’s going to play into the longer term employment situation.
With the unemployment rate ticking down last time, you also saw labor participation at relatively high level or relatively low levels, meaning that there are, it seems like there are people just coming out of the workforce, know, people who are retiring early, people who are going back to school, families where they’ve decided they’re going to be a one income household for a while.
So you have a complicated situation. You have the near term effects of things like oil prices and just the overall economy. And then you have this long structural change that’s going on with AI. So it’s hard to predict where things are going to go. So I think we’re gonna have to just take it sort of data point by data.
Rena Sherbill: Do you think it’s worth mentioning gold at all? As a safe haven sector that’s behaving, I guess unpredictably, but has been up for the most part recently.
Brian Stewart: Gold’s (GLD) had and silver too is had kind of a strange run recently. I think that the dynamics in that market are have been unusual, so I think it’s worth keeping an eye on just as things go forward, but it is kind of breaking with tradition.
Some of the some of the ways it’s trading, which is a weird thing to say about gold. know, like gold seems like the most sort of like vanilla predictable, one to one this happens and then I expect gold to do this. So it’s kind of interesting that it’s become kind of a trading vector.
I’m thinking especially of silver (SLV). You we had that run in silver for a while where it was almost like trading like a meme stock. So it’s an interesting market and I agree that it’s worth keeping an eye on.
Rena Sherbill: What else stock wise? Seen some major droppage from Palantir on the back of Anthropic’s (ANTHRO) momentum. What else are you thinking about stock wise?
Brian Stewart: I think an interesting thing to flag, especially when we’ve talked about like tech was up generally with the ceasefire Palantir (PLTR) moved in the opposite direction. So it’s down about 14 % this week.
There’s concern. I think Palantir is becoming real battleground stock in terms of, you know, the SaaSpocalypse concerns, the idea that with agent AI coming into effect, whether software stocks like Palantir are going to be able to keep their moat or and then on the other side, there’s a lot of people who say like quite the opposite.
Palantir is AI winner. It’s going to be one of the breakout AI stock. So I think you have a real like polarization going on among the people interested in Palantir as a potential investment.
So I think it’s a little a lot of bear bull push and pull going on in that stock. So bears kind of took the lead in the past week. So we’ll kind of see how that conversation bears out.
You had mentioned tax day, Intuit (INTU) is another one that’s been suffering from the, the SaaSpocalypse concerns. So it’s down 16 % in the past week. It’s down about 23 % in the past month. It reached a low in February after its earnings report, had soft guidance in there and the stock bounced back following that and now it’s drifting back below that level.
So it’s ticked to a new low recently. It’s lost about half its value so far this year. So I think that’s becoming like a benchmark for the software concerns that we have surrounding AI.
I think there’s just sort of this idea that maybe in five years we’re all just gonna plug our taxes into chat GPT or whatever and not need to pay the 60 bucks or whatever it costs to do turbo tax. I think it’s kind of just interesting, this is kind of coming to a four as tax day is coming.
And then one other stock that I thought was worth mentioning is (CAR), it’s a budget or Avis Budget, basically a car rental service, but it’s up 40% in the past week, up about 200 % in the past month.
Basically, it’s become a meme stock. There was a short squeeze and then, you know, sort of momentum trading from there. So it’s just sort of interesting. This was sort of the case when like every once in a while, these meme stocks bubble up where you’ll get these these well-known brands that are otherwise kind of blah stocks that just get get a short squeeze behind them.
This is the latest one. So I think it kind of just shows that there’s still that dynamic going on in the market. There’s still the trader instinct. I think what we’ve seen in the last over the course of the whole Iran situation is this idea that the market wants to be risk on, but there’s so much risk that kind of bubbles up in the world that it makes it difficult to be risk on.
So the market didn’t overreact to the war in Iran. Crude prices shot up, gasoline prices shot up and the stocks lost ground, but they just sort of drifted lower. There was no sort of like raising the white flag, going back into cash kind of in an aggressive, meaningful way.
And then when there’s a hint of, of peace, there’s a hint that this is going to be resolved. see the market kind of snapped back. So I just think there’s like the overall desire of investors sort of writ large to get back to the business of betting on AI and betting on betting on momentum and things like that.
So I think you just have that tension where you have that desire to kind of, you know, it’s almost like you have like a race car, but you’re stuck in traffic, you know, like you’re just sort of revving the engine, waiting for traffic clear so you can get in the straightaway on the highway. And we just keep sort of running into construction or whatever along the way.
Rena Sherbill: Did you ever see the movie Wayne’s World back in the day? When my brothers and I used to play sports in the street, we used to say, game off. When cars used to come by, game on. It feels like risk on, risk off.
Brian Stewart: And then waiting for the Iran car to pass or waiting for the tariff car to pass. Yeah, I think that’s a good way look at it.
Rena Sherbill: What are you looking at next week?
Brian Stewart: Earning season starts to rev up next week. We have the financial stocks as the kind of opening opening gambit in that financials were up this week. I mean, a lot of that’s just sort of the same relief rally that saw tech stocks up.
But you see like Citigroup (C) was up 6 percent. Wells Fargo (WFC) was up 5 percent. JP Morgan (JPM) was up 5 percent. So like I said, that was largely based on geopolitical situation getting a little better, but I think it also just people are ready for these earnings.
There’s a certain amount of enthusiasm headed into it. Some of these stocks, like the two that I think are most interesting and really I’m only saying that cause they’ve, they’ve been up so much over the past year is Citi and Goldman Sachs (GS).
So Goldman Sachs is up about 84 % in the past year. Citi has basically doubled over the past year. So, I mean, these are well-trodden established giants financials, sort of boring companies in a boring business, but they’re basically doubling over the past year.
I think it’s interesting to see whether that momentum can continue. So it’d be interesting to sort of see how the earnings play into that kind of longer stretch of, of gains. I also just think economically speaking, getting commentary from management, you the CEOs of these companies, because they’re really at the pulse of, you know, money changing hands. So whatever they have to say about the economy will be really useful.
And then besides the financials, I think the most interesting stock is Netflix (NFLX). So Netflix jumped when it lost the bidding war for Warner Brothers (WBD). Paramount (PSKY) came in and swooped that away. The stock was kind of under an overhang from that potential merger.
So it’ll be interesting to see management’s commentary about the thought process behind the merger, how they feel about things moving forward without it, whether there’s signs that they’re gonna look around for other content to buy or things like that.
I’m thinking about it in terms of the Project Hail Mary, sort of the big first big movie of 2026. It’s a Amazon MGM release. I think Amazon’s (AMZN) had a lot of success with that MGM merger so far, being able to boost its content offerings and be a bigger player in the box office world.
So I think that was kind of the vision that Netflix had with the Warner Brothers purchase was kind of going in that direction as well. So it’ll be interesting to see what the strategy is going forward.
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