Good morning and welcome to today's market chronicle. It's Tuesday, June 2. Wall Street crossed the finish line at all-time records yesterday, and then, as if on cue, Iran stopped returning Trump's calls.
Here is what the wonderful world of finance has decided to do: pretend that ninety-dollar oil is a feature, not a bug. Monday's close was a thing of beauty if you don't ask too many questions. The S&P 500 climbed to 7,600, the Nasdaq to 27,087, the Dow to 51,079, all records, all powered by two things with very little to do with each other: Nvidia's new PC chip and the rumor of peace with Iran. Nvidia ($NVDA) rose 6.3% on the announcement of its N1X processor, a laptop chip built with MediaTek that will run Windows for Arm, which is either the beginning of a new computing era or a very expensive keynote, and the market chose the first interpretation without blinking. Dell Technologies ($DELL) jumped more than 10%, HP Inc ($HPQ) rose 8%, Arm Holdings ($ARM) surged 18%. Intel ($INTC) dropped 6%, which is the market's polite way of saying the old guard has checked out. The AI rally, declared dead approximately four times in the last year, has resurrected itself inside a laptop keyboard.
But everyone is pretending not to notice the oil. WTI crude hit $92 a barrel on Monday after Iran's Tasnim news agency reported that negotiators are stopping talks following Israeli strikes in Lebanon and threatening again to close the Strait of Hormuz. The "rapid pace" of negotiations that our beloved president described on Monday morning was apparently moving so fast it lapped itself. Brent crossed $97. The last time we had a simultaneous AI euphoria and an oil shock of this magnitude, economists began revising their recession probabilities in both directions at once. We are choosing not to think about that this morning.
For the day ahead, the economic calendar has data points due that will matter considerably less than whatever Iran announces before noon. The 10-year yield sits at 4.46%, moving higher as ceasefire hopes deflated overnight, a canary that everyone is carefully not looking at. Gold is near $4,500. Bitcoin has retreated to around $70,000 from yesterday's $72,000, a move the crypto community will describe as consolidation. S&P futures are down roughly 0.4% in the premarket, sitting around 7,582.
Intel lost $6 billion in market cap while Nvidia gained $319 billion on the same day, in the same sector. The emperor has new chips. See you tomorrow.