Today's data did little to soften the market's main concern. March core PCE rose 0.3% month-on-month, exactly as expected, while headline PCE jumped 0.7%, also in line with forecasts. Inflation is still moving fast enough to keep the Fed cautious, especially with energy prices adding pressure. First-quarter GDP growth, at an annualized 2.0%, came in below the 2.3% expected, but not weak enough to fear a recession. Meanwhile, the Employment Cost Index rose 0.9%, slightly above forecasts, and jobless claims fell to 189,000, well below the 212,000 expected. This means that inflation remains sticky, wages are still firm, and the labor market remains tight. That is not the combination rate-cut bulls wanted to see.

Today's session is not really about optimism or fear, it's about two ideas. The first one is comforting: corporate America, especially Big Tech, is still remarkably good at making money. Alphabet delivered a record quarter for its cloud business. Amazon's cloud sales beat expectations. Microsoft showed strong cloud growth and more paid AI subscribers. Meta's advertising machine is humming again. Even outside technology, companies such as Eli Lilly, Merck and Caterpillar gave investors reasons to buy.

The second idea is much less pleasant: oil is really starting to become a problem. Brent crude has been trading above $110 a barrel for quite a while now, after fears grew that the conflict with Iran could drag on and further disrupt global energy supplies. Reports that Donald Trump would receive military options for potential action against Iran added to the tension.

In other news, the Federal Reserve did what everyone expected last night: it left interest rates unchanged. But the meeting was not boring. Four officials dissented, the biggest split since 1992. Central banks usually prefer to look united, even when the room is less harmonious than the public statement suggests. This time, the disagreement was too large to hide.

For months, investors have leaned on the idea that the Fed's next move would be a rate cut. That assumption now looks much weaker. Powell kept the door open, but barely. Inflation is still too high, and energy prices are making the Fed's job harder. One market strategist put it simply: the Fed seems less willing to ignore energy-driven inflation than it was to overlook earlier price shocks.

That is why the bond market has tightened while equities try to rally. The 10-year Treasury yield is near recent highs. The 30-year yield has pushed back above 5%. This is the market's way of saying that even if tech earnings look strong, the cost of money still matters.

Back to corporate news, as mentioned above, Alphabet was the standout. Its first-quarter revenue jumped 22%, net income rose sharply, and the market rewarded it. The reason is straightforward: Alphabet owns the cloud capacity that AI companies need. In this investment cycle, the winners are not only the firms with clever models or shiny products. They are also the firms that own the pipes, the servers and the infrastructure everyone else must rent. It is not glamorous, but neither is a toll road, and those can be very profitable.

Amazon also benefited from cloud strength and demand for AI services. Microsoft showed robust cloud growth and momentum in AI subscriptions. But investors were more cautious because the company also said capital spending would rise sharply. Meta had an even clearer problem: its revenue growth was excellent, its biggest quarterly jump in nearly five years, but its plan to spend even more on AI data centers made investors wince. The company is now looking to raise as much as $25 billion from a bond sale, another reminder that the AI buildout is not just a technology story. It is also a funding story.

For now, investors appear willing to reward companies that can turn AI demand into immediate cloud sales. They are less forgiving toward companies that must spend heavily today in the hope that tomorrow's profits will justify the outlay.

Today's economic highlights:

Today's agenda includes: the NBS Manufacturing and Non-Manufacturing PMIs along with the RatingDog Manufacturing PMI in China; housing starts and consumer confidence in Japan; in France, preliminary GDP growth rates and inflation rate; retail sales and unemployment figures in Germany; in Spain, GDP growth rates and consumer confidence; KOF leading indicators in Switzerland; in Italy, GDP growth rates and unemployment rate; in the Euro Area, GDP growth rates, inflation rates, and unemployment rate; in the United Kingdom, BoE monetary policy decisions; in the United States, initial jobless claims, PCE price indices, personal spending and income, and GDP growth rate; in Canada, monthly GDP; followed by the ECB press conference and President Lagarde's speech. See the full calendar here.

  • Dollar index: 98.280
  • Gold: $4,633
  • Crude Oil (BRENT): $108.43 (WTI) $104.00
  • United States 10 years: 4.40%
  • BITCOIN: $76,079

In corporate news:

  • Union Pacific and Norfolk Southern filed a revised application for U.S. approval of their $85 billion merger, arguing it would create the first coast-to-coast U.S. freight rail operator and save shippers $3.5 billion annually.
  • Air Products raised its 2026 earnings forecast after stronger pricing, higher helium prices, and new assets helped lift quarterly sales.
  • Merck reported a quarterly loss due to an acquisition-related charge from Cidara Therapeutics, but sales rose 5% on strong demand for Keytruda and Winrevair.
  • Eli Lilly raised its annual revenue and profit guidance after first-quarter earnings beat expectations, driven by strong sales of Mounjaro and Zepbound.
  • Blue Owl beat quarterly profit expectations as fee-related earnings rose and assets under management increased to nearly $315 billion.
  • ConocoPhillips cut its 2026 production outlook due to Middle East war-related disruption while reporting lower first-quarter earnings.
  • Caterpillar posted higher first-quarter profit and revenue, helped by strong demand for construction equipment and power systems tied to data-center growth.
  • Royal Caribbean cut its annual profit forecast as higher fuel costs linked to Middle East tensions weighed on expected margins.
  • Amazon said its AWS cloud regions in Bahrain and the UAE were damaged by the Middle East conflict and may take several months to restore.
  • WTW reported higher quarterly profit, supported by strength in its risk and brokerage business.
  • Altria reported higher first-quarter sales as cigarette price increases offset lower shipment volumes.
  • Ford, General Motors, Mercedes-Benz, and Stellantis booked expected tariff refunds totaling about $2.3 billion, though the timing of U.S. reimbursements remains uncertain.
  • Bristol-Myers Squibb reported higher first-quarter sales, driven by growth in newer treatments including Camzyos, Breyanzi, and Reblozyl.
  • Warner Bros Discovery disclosed that CEO David Zaslav's 2025 total compensation was $165 million.
  • DCC rejected a $6.66 billion takeover proposal from KKR and Energy Capital Partners, saying the offer undervalued the company.
  • Berkshire Hathaway is entering its first annual meeting under CEO Greg Abel, with Warren Buffett remaining chairman but stepping out of the spotlight.
  • Cigna raised its annual profit forecast after quarterly earnings beat expectations, helped by growth at its Evernorth health-services unit.
  • Qualcomm shares rose as investor optimism about smartphone recovery and future AI data-center chip opportunities outweighed weak near-term guidance.
  • KKR is considering selling Flora Food Group for $10 billion, according to the FT.
  • Apple is planning a Siri camera mode and improved visual AI for iOS 27, according to Bloomberg.
  • L3Harris has filed a registration statement for the IPO of its missile solutions division.
  • Residential property giants AvalonBay and EQR are considering a merger, reveals Bloomberg.
  • Today's key earnings reports in America: Eli Lilly, Mastercard, Caterpillar, Amgen, ConocoPhillips, Sandisk, Western Digital, Stryker, Parker-Hannifin, Bristol-Myers Squibb, Altria, Southern Company, Agnico Eagle Mines, Quanta Services, Illinois Tool Works, Cigna, Monolithic Power Systems, Valero Energy, L3Harris, Arthur J. Gallagher, AMETEK, Carrier Global, Xcel Energy, Cardinal Health, Roblox, American International, The Hershey…

Analyst Recommendations:

  • Lennox International Inc.: Vertical Research Partners upgrades to buy from hold and raises the target price from USD 550 to USD 600.
  • Meta Platforms, Inc.: JP Morgan downgrades to neutral from overweight and reduces the target price from USD 825 to USD 725.
  • Qualcomm, Inc.: Fubon Securities upgrades to buy from neutral and raises the target price from USD 177 to USD 195.
  • Alphabet Inc.: D.A. Davidson maintains its neutral recommendation and raises the target price from USD 310 to USD 375.
  • Amazon.com, Inc.: Benchmark Co., LLC maintains its buy recommendation and raises the target price from USD 275 to USD 370.
  • Bloom Energy Corporation: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 188 to USD 279.
  • Booking Holdings Inc.: Susquehanna maintains its positive recommendation and reduces the target price from USD 5000 to USD 200.
  • Carvana Co.: Baird maintains its neutral recommendation and raises the target price from USD 350 to USD 440.
  • Cognizant Technology Solutions Corporation: BMO Capital Markets maintains its market perform recommendation and reduces the target price from USD 83 to USD 63.
  • Corning Incorporated: Argus Research Company maintains its buy recommendation and raises the target price from USD 150 to USD 200.
  • Equinix, Inc.: Oppenheimer maintains its outperform rating and raises the target price from USD 975 to USD 1200.
  • Etsy, Inc.: Deutsche Bank maintains its hold recommendation and raises the target price from USD 54 to USD 75.
  • Fair Isaac Corporation: HSBC maintains its reduce recommendation and reduces the target price from USD 1032 to USD 707.
  • Humana Inc.: Evercore ISI maintains its in-line recommendation and raises the target price from USD 195 to USD 250.
  • Nucor Corporation: Seaport Global maintains its buy recommendation and raises the target price from USD 185 to USD 245.
  • Nuscale Power Corporation: CLSA maintains its accumulate recommendation and reduces the target price from USD 52 to USD 19.
  • Nxp Semiconductors N.v.: Argus Research Company maintains its buy recommendation and raises the target price from USD 270 to USD 330.
  • Seagate Technology Holdings Plc: China Renaissance Research maintains its buy recommendation and raises the target price from USD 469 to USD 802.
  • Sofi Technologies, Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from USD 26 to USD 18.
  • Universal Health Services, Inc.: Leerink Partners maintains its outperform recommendation and reduces the target price from USD 278 to USD 215.
  • Wingstop Inc.: BMO Capital Markets maintains its market perform recommendation and reduces the target price from USD 280 to USD 200.