MPC Markets Morning Call

📉 Wall Street tumbled overnight as 30-year US Treasury yields hit their highest level since 2007, with inflation fears from the Iran war gripping markets ahead of Nvidia's blockbuster earnings tonight. We break down the bond market shock, the brutal sell-off in precious metals, and what to watch from Nvidia's Q1 FY27 print.In today's Morning Call:🔻 Wall Street sell-off — tech and financials hit hardest (GOOGL -2.34%, MS -4.57%, AMZN -2.08%)📈 30-year UST yield flirting with 5.20% — highest since 2007⚡ 2-year yield at 4.11% sitting well above the 3.63% Fed Funds rate🎯 Futures now pricing greater than 50% chance of a Fed rate hike this year under new Chair Kevin Warsh🛢️ Oil -0.8% on US–Iran diplomacy progress, but inflation premium remains embedded🥇 Precious metals smashed — Gold -1%, Silver and Platinum both -4%💵 USD strength on widening yield differentials, pressuring the AUD🤖 Nvidia earnings preview — $79.2B consensus revenue, BofA expects 2–4% beat, $320 PT🏆 Strong Buy 15 out of 15 analyst rating heading into the print📅 Week ahead: AU jobs data Thursday, FOMC Minutes, Walmart & Target earningsThe ASX is set to open lower on the Wall Street lead, with all eyes on Nvidia after the US close. A beat could stabilise sentiment — a miss into this bond-yield backdrop would amplify the risk-off mood meaningfully.

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 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.

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%.

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 Takeaways01 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.

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.

US equities held at record highs in subdued trading on Monday as investors braced for the most consequential week of the year — five Magnificent Seven earnings reports, a Fed meeting that may be Jerome Powell’s last as chair, and Q1 GDP and PCE inflation data. The S&P 500 rose 0.1% to 7,173.89 and the Nasdaq edged up 0.2% to 24,887.10, both fresh records, while Brent crude surged 3% to above $108 a barrel for its sixth straight session of gains. Iran proposed an interim deal to reopen the Strait of Hormuz in exchange for lifting the US naval blockade, with Trump convening his national security team to discuss. ASX 200 futures point to a 0.6% fall.

US equities pulled back from record territory on Thursday as an escalating naval standoff in the Strait of Hormuz overwhelmed a solid earnings season. The S&P 500 fell 0.4% to 7,108.97 after touching an intraday record of 7,147.78, the Nasdaq Composite dropped 0.9% to 24,438.50 — its biggest decline in a month — and the Dow slipped 0.4% to 49,309.33. Trump ordered the Navy to fire on Iranian boats laying mines in the strait and declared the US had “total control” of Hormuz, while Axios reported Iran had deployed additional mines. Brent crude surged 4% to $106.00 a barrel, extending its weekly gains as Dated Brent physical prices climbed above $107. The SOX semiconductor index extended its record run to a 17th consecutive session of gains. After the closing bell, Intel soared 19% on AI-fuelled revenue guidance that crushed estimates, while Meta and Microsoft announced plans to cut or buy out up to 23,000 jobs to offset AI spending. ASX 200 futures slipped 4 points to 8,828, with the Australian dollar at US$0.7130.Key Takeaways01The S&P 500 fell 0.4% to 7,108.97 after touching an intraday record at 7,147.78, the Nasdaq dropped 0.9% to 24,438.50, and the Dow slipped 0.4% to 49,309.33, with the SOX semiconductor index extending its winning streak to 17 days.02Trump ordered the US Navy to “shoot and kill” any Iranian boat laying mines in the Strait of Hormuz and declared “total control” of the waterway, while Iran reportedly deployed additional mines and mediators scrambled to salvage peace talks.03Brent crude surged 4% to $106.00 a barrel — up for a fourth consecutive session — with WTI rising 0.8% to $96.60, as Hormuz disruptions keep physical markets signalling acute near-term supply tightness.04Texas Instruments surged 19.4% on strong guidance while Tesla fell 3.7% on $25B+ capex plans, IBM dropped 8.3% and ServiceNow cratered 17.7% as software stocks bore the brunt of AI-disruption fears.05Intel soared 19% after hours on AI-fuelled Q2 revenue guidance of $13.8–$14.8 billion versus the $13.07 billion estimate, while Meta and Microsoft announced cuts affecting up to 23,000 jobs to offset AI infrastructure spending.06ASX 200 futures slipped 4 points to 8,828, the Australian dollar held at US$0.7130, and Trump extended the Israel–Lebanon ceasefire by three weeks, removing a key roadblock to broader Middle East negotiations.

The S&P 500 fell 0.6% to 7,064.05, extending its retreat from record highs as VP Vance called off his trip to Pakistan and Iran refused to attend further negotiations. Oil surged above $100 intraday before Trump’s after-hours ceasefire extension knocked Brent back below $100 — WTI settled at $92.13 (+2.8%) and Brent near $95. The 10-year Treasury yield rose 6 basis points to 4.31% as Warsh’s hawkish testimony — calling for a new inflation framework and “regime change” in policy conduct — crushed rate-cut expectations to just a 30% chance before January. Apple shed 2.5% on news Tim Cook will step down as CEO in September, replaced by hardware chief John Ternus. US retail sales surged 1.7% in March, with gasoline station receipts jumping 15.5% — masking weaker underlying demand. ASX 200 futures point to 8,915 (-63 pts / -0.70%), with Axios reporting Iran’s Supreme Leader Khamenei is expected to respond to the latest proposals on Wednesday.The S&P 500 fell 0.6% to 7,064.05, the Nasdaq slipped 0.6% to 24,259.96 and the Dow dropped 0.6% to 49,149.60 — a second straight decline from record highs, with 10 of 11 S&P sectors lower and only energy advancing.Trump extended the US-Iran ceasefire indefinitely after the bell, citing Iran’s “seriously fractured” leadership, but maintained the Hormuz blockade; Vance’s Pakistan trip was called off after Iran refused to attend talks.WTI rose 2.8% to $92.13 and Brent settled near $95 after touching $100 intraday; spot gold fell 3.0% to $4,677.24 as the dollar strengthened and yields surged on Warsh’s hawkish testimony.Fed chair nominee Kevin Warsh called for “regime change” at the central bank and a new inflation framework, sending the 10-year yield up 6 bps to 4.31% and cutting rate-cut odds to 30% before January.Apple fell 2.5% as Tim Cook announced he will step down as CEO on September 1 in favour of hardware chief John Ternus; Amazon invested an additional $5 billion in Anthropic; Deutsche Telekom is weighing a full T-Mobile merger.ASX 200 futures fell 63 points to 8,915 (-0.70%); BHP, South32 and Paladin Energy report Wednesday; Axios says Iran’s Supreme Leader Khamenei expected to respond to proposals on Wednesday.

Friday’s euphoric rally — which pushed the S&P 500 to a record 7,125.36 (+1.2%) and sent Brent crude tumbling 8.7% to $90.71 — is being unwound after Iran re-closed the Strait of Hormuz over the weekend, citing the continued US naval blockade of its ports. Weekend futures show Brent crude surging 7.25% while the Nasdaq 100 dropped 1.01%. The US Navy seized the Iranian-flagged cargo ship Touska after firing on its engine room — the first major encounter of the week-old blockade. Iran has declared it will skip the next round of US-Iran talks in Islamabad and warned that vessels approaching Hormuz “will be considered cooperation with the enemy.” At least 135 million barrels of crude remain trapped on tankers in the Persian Gulf. ASX 200 futures point to an 82-point gain at 9,056 based on Friday’s close, but the weekend Hormuz reversal and oil spike are expected to pressure the open sharply lower.Key Takeaways01 The S&P 500 closed at a record 7,125.36 (+1.2%), the Nasdaq hit 24,468.48 (+1.5%) and the Dow surged to 49,447.92 (+1.8%) on Friday, capping an 11.9% three-week rally — but weekend futures show the Nasdaq 100 down 1.01%.02 Iran re-closed the Strait of Hormuz within 24 hours of reopening it, with IRGC gunboats firing on commercial vessels and at least 13 oil tankers forced to turn back toward the Persian Gulf.03 Brent crude plunged 8.7% to $90.71 on Friday but weekend futures surged 7.25%, with at least 135 million barrels of crude stuck on tankers in the Gulf and the energy crunch far from resolved.04 The US Navy seized the Iranian-flagged cargo ship Touska after firing on its engine room — the first boarding of the week-old blockade — while Iran declared it has no plan to attend the next round of talks in Islamabad.05 Netflix slumped 9.7% on below-expectation revenue growth guidance and the departure of co-founder Reed Hastings, while travel stocks (Royal Caribbean, United Airlines, Carnival) led S&P 500 gainers on Hormuz optimism.06 ASX 200 futures closed Friday at 9,056 (+82 pts / +0.91%), but the weekend Hormuz reversal and oil spike are expected to weigh heavily on the open; the AUD led losses among risk-sensitive currencies in early Asian trading.

Wall Street reached all-time record highs on Wednesday as investors priced in growing optimism for a peace deal and rotated aggressively back into technology stocks. The S&P 500 closed at 7,022.81, its first record close since January 27, while the Nasdaq Composite hit 24,016.02, eclipsing its previous October peak. The catalyst was twofold: a major rotation into software stocks — which had lagged for months on AI disruption fears — and diplomatic signals that the US and Iran are considering a two-week ceasefire extension to allow more negotiating time, with mediators working on compromises covering the nuclear program, Hormuz, and war compensation. Bank of America and Morgan Stanley completed the bank earnings sweep with record trading results, while the broader sector cut more than 5,000 jobs amid a push into AI efficiency. Oil was essentially flat — Brent at ~$95/barrel (+0.1%), WTI at $91.14 (-0.2%) — and gold fell 1% to $4,794 as risk appetite lifted. The AUD reached its highest close since June 2022, rising 0.7% to US71.8¢. The major ASX-specific risk this morning is an overnight fire at Viva Energy’s Geelong refinery, representing approximately 10% of Australian fuel supply, with jet fuel and diesel production continuing at reduced levels. ASX 200 futures sit near-flat at 9,018 (-3pts).

US equities staged a decisive recovery on Monday, with the S&P 500 closing up 1% at 6,887 to fully erase all losses sustained since the outbreak of the Iran war six weeks ago. President Donald Trump’s declaration that Iran “wants to make a deal” sparked the rally even as the US Navy enforced a new blockade of the Strait of Hormuz. Oil prices surged toward $100 a barrel before paring gains on talk of renewed negotiations. The ASX is set to open higher as risk appetite returns to global markets.

The S&P 500 rose 0.6% to 6,824.66, the Dow +0.58% to 48,185.80 (now positive YTD), and the Nasdaq +0.83% to 22,822.42, marking the index’s seventh consecutive session of gains — its longest run since October.Israel agreed to direct talks with Lebanon focused on disarming Hezbollah, boosting ceasefire credibility, though Iran’s new supreme leader signalled Hormuz will enter “a new stage” of management and US–Iran peace talks in Islamabad are set for Saturday.WTI crude settled near $99.21 (+5.1%) and Brent near $97.17 (+2.6%) as the Strait of Hormuz remains largely shut, with Saudi Arabia’s production capacity cut by 600,000 bpd from attacks on energy facilities — roughly one-tenth of normal Saudi exports.February PCE inflation rose 0.4% month-on-month to 3.0% year-on-year — above the Fed’s 2% target and pre-dating the oil shock — while Q4 2025 GDP was revised down to 0.5% annualised growth, raising the prospect of Fed rate hikes rather than cuts.Carlyle Group’s $7 billion private credit fund capped redemptions at 5% after investors sought to withdraw 15.7% of shares, as AI disruption fears and software sector stress continue to roil private credit markets and the broader $1.8 trillion industry.ASX 200 futures are near flat at 9,002 (–1 point at 7:45am AEST); Atlassian fell 7.6% in New York and will weigh at the open, with China’s March CPI/PPI at 11:30am AEST and US CPI due tonight at 10:30pm AEST as key catalysts.