Geopolitics: US–Iran Negotiations and the Oil Market
The dominant geopolitical storyline is the back-and-forth between the United States and Iran, with markets bracing for a potential signing of a memorandum of understanding (MOU) on Friday. The uncertainty surrounding that document is the central concern. Reports out of Bloomberg indicated that the agreement contained 14 points, but Iranian state media (TASNIM) pushed back, claiming that the reported details were not accurate. This creates an ongoing "he said, she said" dynamic between what Iranian media reports and what is understood in the US — though there is likely at least some truth to Bloomberg's reporting of the 14 points being part of the framework.
President Trump added fuel to the situation with comments delivered at the G7. He stated bluntly that if he doesn't like what is in the MOU and doesn't agree with it, he would simply resume "dropping bombs on Iran again." That rhetoric put a bid into crude oil. Crude had earlier touched near $74 a barrel — its lowest level since March 3rd, marking three-month lows — before starting to catch a bid and recover. This rebound in oil placed some restrictions on an equity market that had otherwise been pushing higher, led by a rebound in the NASDAQ, with the Dow sitting just off the all-time highs it had set the prior day.
Despite the picking-up of rhetoric, there remains substantial optimism that a deal gets done. Still, open questions persist: Will Iran actually sign on Friday? There were also reports of drones flying around the Strait of Hormuz over the past couple of nights, adding to tensions. A key caveat on the entire US-Iran deal is Israel — specifically, whether Israel will pull back on its attacks on Hezbollah into Lebanon. That is viewed as one of the big concerns moving forward. The expectation entering the week was that the deal would be "inked" by week's end, but part of that arrangement also involves setting up another 60-day window to negotiate the next steps. The pingponging of rhetoric between the two countries is seen as a likely continuation rather than a resolution.
The Federal Reserve: A New Chair and a Potential Shakeup
The Federal Reserve is closing out a two-day meeting, and this one carries unusual significance because Kevin Warsh now takes the helm as chair. Expectations are described as a wide array, with genuine uncertainty over which scenario will play out. Warsh has stated that he wants to change the tone of the Fed, the way the Fed looks at things, and possibly even some of the data points it relies upon.
A central question concerns the "dot plot" — the summary of economic projections released alongside the decision. There has been commentary that Warsh dislikes the guidance these dot plots provide. The underlying skepticism is over how accurate dot plots really are, given that conditions in the marketplace are dynamic on a quarter-by-quarter basis. The open question is whether Warsh will offer guidance on his expectations. The assessment is that he likely will not — and if he declines to provide that guidance, it could inject uncertainty into how his comments are interpreted.
By any reasonable expectation, there are likely to be shakeups: in how the meeting is run, and in some of the data points the Fed uses. This is expected to draw pushback from some Fed governors and presidents, especially the more hawkish members. Austin Goolsbee is cited as potentially favoring rate hikes, and the market has been pricing in some chance of a rate hike by the end of the year.
However, Warsh's job is seen as having gotten considerably easier with crude oil back below $80 a barrel, which should help tame inflation projections going forward. That is viewed as a positive for Warsh's messaging. The reasoning is this: if Warsh were to look at the data the way former Fed chair Powell did, one might argue rate hikes are on the table. But the expectation is that Warsh will "pivot completely 150" — that is, depart sharply from the prior approach — and attempt to shake up both how the Fed operates and how it communicates. Although he has served on the Fed before and knows its intricacies, the view is that the Fed may be due for a shakeup after roughly a decade of consensus-driven decisions, where a clear majority would line up to stand pat, hike, or cut. An important caveat noted is that while Warsh was on the Fed before, it was a different era — one in which the Fed did not engage in all the "telegraphing" of future moves that has since become standard.
SpaceX: A Frenetic Rally and Healthy Options Activity
SpaceX has been off to the races, with strong momentum carrying shares higher, including additional gains in the pre-market. The stock hit above $225 a share the prior day before pulling back significantly, though it still closed up roughly four or five percent. The interpretation of that pullback: when the stock popped early in the morning, reports began circulating about its market capitalization. On a market-cap basis, it had climbed near Microsoft's valuation and was sitting above Amazon, reaching roughly $2.6–2.7 trillion in market cap. That triggered profit-taking, which helped calm what had been a frenetic rally — and some consolidation is viewed as warranted at this point.
Another factor that helped the broader market was that this marked the first full day of options trading in the name, with about 1.5 million contracts traded. The put-call ratio was around 0.74–0.75, which is essentially in line with what is typically and historically seen in options markets — where calls outtrade puts at roughly a one-to-0.7 ratio, producing a normal put-call ratio of about 0.75. This was read as a positive, healthy sign: not everyone was simply piling into calls. Some shareholders appear to have been buying puts, and put volume was a bit higher than one might expect for a stock that is rallying. At the same time, traders are using the call market as an alternative to buying shares outright — buying calls or call verticals instead. The normal-range put volume and put-call ratio were therefore taken as constructive signals. In terms of overall volume, the name ranked just behind Tesla and Nvidia among major tech names — which typically carry high options volumes — and ahead of Apple, Meta Platforms, and Google/Alphabet. The optimism and the elevated volumes continue.
Intel: The 18A-P Node Ignites the Stock
Intel shares moved higher in the pre-market, up more than 3%, on a significant catalyst: the company began production of its most advanced chip node, the 18A-P. The announcement was made at a symposium held at one of Intel's facilities in Honolulu. This development is seen as a potential inroad to Intel becoming a supplier for Apple going forward. Intel's foundry chief framed the milestone as a "journey," acknowledging there is more work ahead while expressing appreciation for the opportunity to share the progress being made on the new chip.
This builds on prior momentum. Intel brought its 18A node to PC chips in January, which was a major catalyst for the stock earlier in the year, making it an outperformer to the upside. The 18A-P milestone represents the latest development in Intel's effort to become a manufacturer of chips for other companies — and it comes on top of the nearly 10% stake that the US government took in the company.
On the broader CPU side of the market, Intel still holds the leadership position, even though AMD has been taking some market share. That portion of the chip market has skyrocketed, with pricing surging as demand begins to outstrip supply. All of these developments are clear benefits for Intel.
The one cautionary note is valuation. Intel's valuation is described as getting stretched — its forward price-to-earnings ratio over the next 12 months sits far above what is seen in Nvidia and even above AMD. That stretched valuation is flagged as the sole concern, even as the news flow around the company remains decidedly positive.
