Saturday wrap, 9:00 AM ET. The week closed at all-time highs on the S&P 500 and the Nasdaq Composite, each notching a sixth straight weekly gain (the longest stretch since 2024) on the back of a +115K April nonfarm payrolls print, accelerating beat-and-raise prints from DDOG, AFRM, ABNB, MELI, and a melt-up in semis where Micron added 13%, Qualcomm 9%, AMD 8%, and the SMH ETF tagged a fresh 52-week high. The bullish tape is paradoxical given what happened simultaneously in the Persian Gulf, where US Navy assets exchanged fire with Iranian forces in the Strait of Hormuz overnight Thursday into Friday, the United Arab Emirates intercepted three drones and two ballistic missiles fired from Iranian territory (with three civilians wounded after partial intercepts), and the US Fifth Fleet disabled two more Iranian-flagged tankers attempting to evade the US blockade, bringing the running tally to 57 vessels redirected and 4 disabled since the blockade began. A new acronym propagated across desks Friday afternoon, “NACHO” for “Not A Chance Hormuz Opens,” reflecting a growing consensus that despite the ceasefire holding in name, the kinetic skirmishing pattern is now structural rather than transient. Brent closed the week at $101.29, up 1% on Friday and up roughly 2.5% week over week, while WTI settled at $97.62. Treasury yields drifted lower into the close as the bid for duration on energy passthrough fading offset the hot NFP print, with the 10Y at 4.38% (3 basis points lower on the day) and the 2Y at 3.90%. The University of Michigan May preliminary sentiment reading at 48.2 (a fresh record low, missing 49.5 consensus) was the cleanest counter-narrative on the day, with one third of consumers spontaneously citing gasoline prices and roughly 30% citing tariffs as the source of pessimism, but the equity tape ignored it because the earnings tape was simply too strong to argue with. Heading into next week, the calendar pivots from earnings to macro and politics, with April CPI Tuesday morning, April PPI Wednesday, and the Trump-Xi summit landing Thursday and Friday in Beijing on a Iran-dominated agenda that may push tariff and rare-earth progress to the back of the meeting.
Three things to internalize over the weekend:
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The “everything works” tape is structural for now, but the dispersion underneath is high. The Mag 7 cohort beat the other 493 names on the S&P by more than 40 percentage points on year-on-year earnings growth this quarter, which is the widest spread we have ever recorded and is the cleanest mechanical reason the index can hit fresh highs while sentiment readings collapse. The risk is not the index but the rotation, which is what we sized for in the trade ideas.
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NACHO is a market regime, not a slogan. Trump’s “love tap” framing on Friday’s exchange got priced as de-escalation by equities and as escalation by the energy curve, and only one of those reads will be right by Wednesday’s close. The 14-point memorandum signing window is now tactically pushed, and our base case probability for a signed memo by next Friday’s close drops to 38% from 48% Friday morning, which is below the 55% the market is roughly pricing through OPEC’s December 2026 contract. Brent August $95/$108 strangle remains the cleanest expression.
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CPI Tuesday is the higher-conviction event than the Trump-Xi summit. Cleveland Nowcast moved to 3.5% headline overnight on the Brent move back through $100, while consensus sits at 3.0% headline / 2.9% core. A 3.1% / 3.0% hot tail (we put it at 35% probability) flips the front-end pricing back to 0.9 cuts for 2026 from the current 1.1, and pulls the 10Y back to 4.45%. The 2Y June 17 4.10% / 4.30% put spread we put on Friday at 12 ticks is the position we want into Tuesday morning.
Weekly Performance Scorecard
| Index / Asset | Mon Open | Fri Close | WTD Chg | YTD Chg | Note |
|---|---|---|---|---|---|
| S&P 500 | ~7,232 | 7,398.93 | +2.3% | +12.4% | 6th straight weekly gain (longest since 2024); record close |
| Nasdaq Composite | ~25,124 | 26,247 | +4.5% | +18.1% | Record close; tech leadership reasserted |
| Dow Jones | ~49,071 | 49,609 | +1.1% | +8.7% | Lagging on energy weight; financials carrying |
| Russell 2000 | ~2,880 | ~2,898 | +0.6% | +5.2% | Small-caps stalled into NFP; rates the binding constraint |
| WTI Crude | $96.20 | $97.62 | +1.5% | — | Hormuz risk premium re-anchored |
| Brent Crude | $98.85 | $101.29 | +2.5% | — | Back through $100 on tanker / UAE strikes |
| VIX | 17.32 | 16.74 | -3.4% | — | Equity vol shrugged off Hormuz; energy vol bid |
| Gold | ~$4,675 | ~$4,712 | +0.8% | +21% | Geopolitical bid intact, no breakout |
| 10-Yr Yield | 4.36% | 4.38% | +2 bps | — | NFP hot offset by peace hopes |
| 2-Yr Yield | 3.95% | 3.90% | -5 bps | — | Front end curve still pricing 1.1 cuts |
| DXY | 98.05 | 98.21 | +0.16 | — | NFP-driven dollar bid into close |
| Bitcoin | $84,200 | $80,940 | -3.9% | — | COIN miss + crypto mark drag |
| Nikkei 225 | 60,720 | 62,833 | +3.5% | +13.2% | Fresh record on AI / SoftBank rally |
| Hang Seng | ~26,150 | +1.57% Fri | +0.7% | +6.4% | China data risk priced into Monday |
Day-by-Day Narrative | Mon May 4 to Fri May 8
| Day | Date | Key Events | S&P |
|---|---|---|---|
| Monday | May 4 | UAE intercepts first Iranian missile barrage. Project Freedom announced. PLTR Q1 earnings post-close, +85% revenue growth, EPS $0.33 vs $0.28. Russell 2000 lags. | +0.34% |
| Tuesday | May 5 | PLTR drops 5% on valuation despite massive beat. Hormuz remains tense. Russell 2000 and S&P set new records on hopium for Iran peace deal. | +0.62% |
| Wednesday | May 6 | AMD prints. Iran 14-point memo nears completion via Pakistan back channel. Brent crashes to $107 then $99 on peace optimism. DIS beats on Parks. Nasdaq +2%. | +0.91% |
| Thursday | May 7 | US strikes Iranian military facilities at Qeshm Island and Bandar Abbas after “unprovoked” attacks on US warships. ARM beats. Brent sub-$100. Records reaffirmed. | +0.27% |
| Friday | May 8 | NFP +115K (vs +65K cons); UR 4.3%, AHE +3.8% y/y. Hormuz fire exchange overnight. UAE drone/missile attack. US disables 2 more Iranian tankers. DDOG +29%, AFRM +18%. SMH 52W high. UMich 48.2 record low. | +0.84% |
The Hormuz / NACHO Mosaic
The structural shift this week is that the market has bifurcated into two regimes that no longer talk to each other. The equity tape is reading the kinetic events as kabuki (Trump’s “love tap” framing, the calibrated intensity of Iranian responses, the maintained ceasefire framework, the diplomatic line through Pakistan), while the energy curve and tanker rates are reading the same events as a permanent regime change in Gulf shipping. NACHO crystallized this divergence on Friday afternoon when several macro desks (including JPM, GS, MS) circulated notes saying their base case for a clean Hormuz reopening had dropped below 30% on a six-month horizon.
Running Iran Box Score
| Item | Status |
|---|---|
| Day of conflict | Day 71 (since Feb 28 strikes) |
| Day of ceasefire | Day 32 (since April 8 framework) |
| US blockade vessels redirected | 57 |
| US blockade vessels disabled | 4 (2 added Friday) |
| UAE intercepts (cumulative) | 12 missiles, 9 drones since Monday |
| Iranian seizures | Ocean Koi (May 7, Gulf of Oman) |
| 14-point memo status | Active, response window pushed |
| Pakistani back channel | Active, briefed late Friday |
| GCC formal entry | Not yet, sticking point |
| OPEC+ ministerial date | May 21 (production response key) |
| Geneva Phase 2 talks | May 22 (contingent on signing) |
| Trump-Xi summit on Iran | May 14-15 in Beijing |
Memo Probability Path
We marked 62% probability Thursday morning, dropped to 48% Friday morning after the overnight fire exchange, and now mark 38% Saturday morning after the UAE drone/missile attack and the running tanker disablement count. The market is pricing roughly 55% via the Brent September call skew. We are short the market here.
| Date Marked | Memo Probability | Catalyst |
|---|---|---|
| May 1 | 35% | Pre-Project Freedom announcement |
| May 4 | 55% | Project Freedom + PLTR halo |
| May 6 | 65% | Brent crash to $99; Pakistan optimism |
| May 7 morning | 62% | Pre-Hormuz strikes |
| May 8 morning | 48% | Post-overnight fire exchange |
| May 9 (today) | 38% | UAE strikes + tanker disablement pattern |
The structural read is that even if the memo is signed by May 15, the underlying kinetic pattern in the Strait may continue, which is what NACHO is pricing. The memo is a diplomatic ceiling, not a kinetic floor. We sized the energy long not on memo failure but on the residual kinetic risk regardless of paper outcome.
Earnings Week Recap | The Big Beats
This was the quantitatively strongest earnings week of Q1 2026 for our coverage list, and the dispersion between beats and misses was as wide as any week we have tracked since Q4 2023.
Top Beat-and-Raise Prints
| Ticker | Reaction | PT Change | |
|---|---|---|---|
| DDOG | Rev $1.07B vs $980M; FY guide $4.30-4.34B vs $4.06-4.10B; ARR $4B+ | +29% | $145 → $215 |
| AFRM | First GAAP profit; GMV $11.6B (+35%); FY27 to $5.135B | +18% | $80 → $115 |
| ABNB | Rev $2.68B vs $2.62B; FY guide raised to “low to mid teens” | +6% | $155 → $185 |
| MELI | Rev $8.85B (+49%, fastest since Q2 2022); op margin -120 bps | +1% | $2,400 → $2,650 |
| PLTR | Rev $1.63B vs $1.54B; +85% growth; EPS $0.33 vs $0.28 | -5% (valuation) | Hold $215 |
| AMD | Beat on MI400 ramp narrative; data center +52% | +8% | $185 → $235 |
| ARM | Royalty revenue accelerating; v9 attach rate up | Beat | $175 → $215 |
| DIS | Parks margins inflected; streaming op income +25% | +3% | $135 → $165 |
Negative Surprises
| Ticker | Reaction | PT Change | |
|---|---|---|---|
| NET | Beat on every metric BUT 1,100 layoffs (20% of workforce) | -18% | $300 → $215 |
| COIN | Rev miss $1.41B vs $1.48B; $482M unrealized crypto mark | -9% | $290 → $200 |
Cohort Read-Across | Live Through Monday
The DDOG print is the structural read of the cycle on AI inference attach to observability. Names with positive read-across (closing the week up but with more multiple expansion possible into Monday): MDB +3%, ESTC +2.5%, HCP +2%, ZS +1.5%, CRWD +1.3%. The negative read-across into the SaaS-displacement bucket (NET layoff signal): WDAY, NOW, OKTA, PD, with WDAY most exposed given the agentic AI HR-displacement narrative.
Macro Calendar | Week Ahead May 11-15
This is the highest-stakes economic data week of Q2, and the Iran-Trump-Xi summit overlay makes it a binary week for the macro book.
| Date | Time (ET) | Event | Consensus / Note |
|---|---|---|---|
| Mon May 11 | Pre-mkt | China April CPI / PPI | Watch deflation pressure |
| Mon May 11 | 14:00 | Senate Warsh Fed Chair confirmation vote | Model 53-56 votes |
| Tue May 12 | 6:00 | NFIB Small Business Optimism (April) | 95.0 cons |
| Tue May 12 | 8:30 | April CPI | 3.0% headline / 2.9% core; Cleveland Nowcast 3.5% |
| Tue May 12 | 13:00 | $42B 10Y Treasury auction (rescheduled) | Tail risk on hot CPI |
| Wed May 13 | 8:30 | April PPI | +0.3% m/m; +2.7% y/y cons |
| Wed May 13 | 13:00 | $25B 30Y Treasury auction | Demand watch |
| Thu May 14 | 8:30 | Initial Jobless Claims | 215K cons |
| Thu May 14 | 8:30 | April Retail Sales | +0.4% m/m |
| Thu May 14 | All day | Trump-Xi Summit Day 1 (Beijing) | Iran agenda dominant |
| Fri May 15 | 8:30 | Empire State Manufacturing | -3.0 cons |
| Fri May 15 | All day | Trump-Xi Summit Day 2 | Tariff / rare earth read |
| Fri May 15 | EOD | Powell term ends; Warsh sworn in | Hawkish lean priced |
| Fri May 15 | EOD | Iran memo signing window (if response favorable) | Watch CENTCOM tone |
Earnings Calendar | Week Ahead
| Date | Notable Reports |
|---|---|
| Mon May 11 | Simon Property Group (SPG), Mosaic (MOS), Constellation Energy (CEG) |
| Tue May 12 | Zebra Technologies (ZBRA), Qnity Electronics, Honda (HMC) |
| Wed May 13 | Cisco (CSCO) AMC, Tencent (700.HK), Sony (SONY) |
| Thu May 14 | Walmart (WMT) BMO (preview); Applied Materials (AMAT) AMC |
| Fri May 15 | DraftKings (DKNG), Take-Two (TTWO) |
The week after (May 18-22) is the big one for our book: NVDA AMC May 20, HD May 19 BMO, TGT May 20, ADI, MDLZ. NVDA is the index-level event of Q2.
Trade Ideas | Sized for the NACHO + CPI Window
▲ Long Brent August $95/$108 Strangle (Hold from Friday)
Hold the Brent August $95/$108 strangle at $4.30 entry, mark $4.85 (+13%). The structure pays max on either a memo signing rally back to $94 by mid-July or a Hormuz re-escalation through $108, which is the binary the next two weeks carries. Sized 0.3% NAV. We are not adding given the +13% mark, but holding through CPI Tuesday and the Trump-Xi summit Thursday. PT trim level $7.50 (Hormuz tail) or $0.40 (memo signed clean).
Risk: Brent settling in the $98 to $103 range collapses both wings. Sized to be losable.
▲ Long XLE June $99/$108 Call Spread + Short May $96 Put (Hold)
Hold the XLE June 19 $99/$108 call spread at $2.80 net debit, short May 16 $96 put for $0.85 credit, net $1.95 entry. Mark $2.40 (+23%). Hormuz tanker pattern + OPEC+ May 21 + fading energy passthrough into May CPI all rotate energy into the bullish setup. Sized 0.2% NAV.
Risk: A signed memo by Friday with no Hormuz follow-on collapses the front of the energy curve. Structure caps loss at $96 strike assignment.
▼ Short 2Y Front-End Put Spread (Hold for CPI Tuesday)
Hold the 2Y June 17 4.10% / 4.30% put spread at 12 ticks entry, mark 14 ticks (+17%). The fed funds futures curve has moved from 1.4 cuts priced for 2026 to 1.1 cuts in two weeks. The structure pays on a CPI hot tail (3.1% headline / 3.0% core) that pulls the 2Y back to 4.20%. Sized 0.2% NAV.
Risk: Cool CPI print at 2.9% / 2.8% reverses the steepener bid. Vertical caps loss at 12 ticks.
▲ Long DDOG / Short SPLK Pair Reset (Adjusted)
Roll the DDOG May 16 $145/$160 call spread (closed Friday at +210% mark) to the July 18 $185/$210 call spread at $5.20 net debit. Mark $5.45 (+5%). Add the cohort overlay: long MDB June 19 $260/$300 call spread at $11.20 ($0.15% NAV), long ESTC June 19 $115/$130 call spread at $3.80 ($0.10% NAV). Total cohort sizing 0.65% NAV.
Risk: A Q2 enterprise commentary that walks back the AI-inference attach narrative. The verticals cap loss.
▲ Long AFRM Stock Collar (Hold)
Hold AFRM stock from May 7 entry $72, mark $86. Long the $75 put at $1.10. Short June $90 call for $1.85 credit. Net structure cost roughly $0.70. The GAAP profitability print is the structural multiple unlock from BNPL 12x to payments 18x. PT $115. Sized 0.5% NAV.
Risk: A 30-day delinquency uptick of 30 bps or more on the Q1 cohort. The collar caps loss.
▼ Short COIN May Put Spread (Hold)
Hold the COIN May 16 $200/$170 put spread at $7.20 net debit, mark $7.95 (+10%). The $482M unrealized crypto mark exposes balance-sheet duration risk. PT $200. Sized 0.2% NAV.
Risk: Bitcoin rally above $90K in May would close half the realized loss path. Stop on a 4% rally.
▼ Short NET May Puts (Hold + Add)
Hold the NET May 16 $230 puts at $5.40 entry, mark $9.10 (+68%). Add 0.10% NAV at $9.10 to bring total sizing to 0.25% NAV. The 20% workforce reduction tied to agentic-AI displacement is a structural margin signal, and we want to ride into Q2 commentary in late July. PT $215.
Risk: Q2 commentary that re-frames the layoff as productivity gain. Stop on a $260 close.
▲ Long PLTR via Roll Down (Reiterate)
Stock at $137.80 Friday close, was $153 pre-mkt Thursday. The post-print sell-off on valuation is a window to roll the June $200/$220 call vertical down to a June $160/$185 call vertical at $4.85 net debit, sized 0.3% NAV. The +85% revenue growth print is the structural validation, the valuation pullback is tactical. PT $215.
Risk: Burry-style short escalation or a softer Q2 print from peers (NOW, MDB) that disappoints. Vertical caps loss.
▲ Long Semis via SMH Calendar Spread (New)
Buy SMH June 19 $310 / July 18 $310 call calendar spread at $4.20 net debit, sized 0.2% NAV. The semis cohort just tagged a fresh 52-week high with MU +13%, QCOM +9%, AMD +8%. The NVDA print May 20 is the pivot, and we want positive theta into June with vega exposure across the print. PT take-off at $7.50.
Risk: A volatility crush around NVDA print collapses the long July leg. Sized to be losable.
▼ Short USD/JPY Strangle Wing (New)
Sell the USD/JPY July 17 158/154 put at 28 pips credit, sized 0.10% NAV notional. The Nikkei at 62,833 is a fresh record on AI/SoftBank, but the BOJ June 13 meeting carries a 35% probability of a rate hike on the JGB tantrum dynamic. We are short the dollar wing.
Risk: A surprise BOJ hold + hot US CPI takes USD/JPY to 162. Hard stop on a 161 close.
▲ Long Gold via Risk Reversal (Hold)
Hold long gold via $4,650 / $4,800 call spread financed by short $4,500 puts. Net entry $0.30, mark $0.85. Geopolitical bid intact, NACHO regime supportive, real yields stable. PT $4,900.
Risk: A clean memo signing + dollar rally would compress gold to $4,550. Put strike caps downside.
Signal Tracker | Saturday Mark
| Signal | Status | Bias |
|---|---|---|
| S&P record close 7,398.93 | 6th straight weekly win | BULL |
| Nasdaq +4.5% W/W | Tech leadership reasserted | BULL |
| SMH 52-week high | Semis cycle leadership | BULL |
| April NFP +115K (vs +65K) | Labor mosaic firm | BULL |
| AHE +3.8% y/y | Wage-side sticky | BEAR for duration |
| US-Iran Hormuz fire exchange | Kabuki tape, real damage | NEUTRAL |
| UAE intercepts (Fri) | Pattern is now structural | BEAR for energy short |
| 4 tankers disabled, 57 redirected | Blockade is steady-state | BEAR for memo path |
| Brent close $101.29 | Risk premium re-anchored | BEAR for energy short |
| 10Y at 4.38% | Curve flattened on peace bid | NEUTRAL |
| 2Y at 3.90% | Front end below NFP fair value | BEAR for 2Y long |
| VIX at 16.74 | Equity vol decoupled from energy vol | NEUTRAL |
| DXY at 98.21 | Dollar bid intact | BULL for dollar |
| UMich 48.2 (record low) | Sentiment-data divergence at record | NEUTRAL |
| DDOG, AFRM, ABNB, MELI beats | AI / fintech / travel cohort lifted | BULL |
| NET 20% layoff | Agentic AI displacement flag | BEAR for SaaS subset |
| COIN $482M crypto mark | Balance-sheet duration risk | BEAR |
| PLTR -5% on valuation | Tactical pullback in structural long | NEUTRAL |
| Memo probability 38% | Below market-priced 55% | BEAR for memo path |
| Trump-Xi summit May 14-15 | Iran agenda crowds out tariffs | NEUTRAL |
| April CPI Tuesday May 12 | Cleveland Nowcast 3.5% vs 3.0% cons | BEAR for duration tail |
| OPEC+ May 21 ministerial | Production response read | BULL for energy long |
| NVDA May 20 print | Index-level event | BULL for semis cohort |
Assessment: 10 BULL / 8 BEAR / 5 NEUTRAL. The mosaic is constructive on the AI / hyperscaler / fintech print confirmation and the labor market re-acceleration, with the bearish counters concentrated in energy (Hormuz tail), duration (CPI hot tail), and sentiment (UMich record low). We hold the book at +6.8% net long gross (up from +6.5% Friday morning), with the NACHO trade financed by trimmed cash, and the CPI Tuesday hot-tail hedge in place via the 2Y put spread. The book is positioned for a 35% CPI hot tail, a 60% Hormuz steady-state, and a 55% probability the Trump-Xi summit produces no incremental tariff surprise.
What to Watch Through Memorial Day
This Sunday May 10
- Iranian state media commentary on UAE strikes (Friday) and tanker disablements
- Trump weekend commentary on memo timing
- China April trade balance overnight Sunday into Monday
Monday May 11
- China CPI / PPI overnight (deflation pressure watch)
- Senate Warsh Fed Chair confirmation vote
- Pre-CPI positioning into the close
Tuesday May 12 (CPI Day)
- 8:30 AM April CPI print (3.0% headline / 2.9% core consensus, Cleveland Nowcast 3.5%)
- 13:00 $42B 10Y Treasury auction
- Fed Goolsbee speaks 16:00
Wednesday May 13
- 8:30 April PPI
- 13:00 $25B 30Y Treasury auction
Thursday May 14 (Trump-Xi Day 1)
- 8:30 Initial Jobless Claims
- 8:30 April Retail Sales
- Trump-Xi summit Day 1 in Beijing
- Iran agenda likely dominates
Friday May 15 (Trump-Xi Day 2 + Powell handoff)
- 8:30 Empire State Manufacturing
- Trump-Xi summit Day 2
- Powell term ends; Warsh sworn in
- Iran memo signing window if response favorable
May 18-22 (NVDA week)
- HD May 19 BMO (US consumer read)
- NVDA May 20 AMC (index-level event)
- TGT May 20 BMO
- WMT May 14 BMO (rolled into Trump-Xi)
May 21: OPEC+ ministerial (production response to Fujairah)
May 22: Geneva US-Iran Phase 2 talks (contingent on memo)
May 28: NVDA May 28 backup print date if rescheduled
This note reflects information available as of May 9, 2026, 9:00 AM ET. Markets are closed for the weekend. For internal use only. Not investment advice.