The immediate driver is the possible path toward ending the nearly three-month conflict between the United States and Iran. Iranian Foreign Minister Abbas Araqchi met Pakistan's Interior Minister Syed Mohsin Naqvi in Tehran to discuss proposals aimed at ending the war. Investors have taken some comfort from the fact that talks continue at all.

The problem is that the hardest issues remain unresolved. Washington and Tehran are still divided over Iran's uranium stockpile, uranium enrichment, and control of the Strait of Hormuz. Iran's leadership has signaled that it wants to keep its stockpiles, while Tehran is still working on a toll system in Hormuz. These are not small details.

That explains why oil is not behaving as if peace is around the corner, although it did fall substantially. Brent crude is trading around $103 to $104 a barrel, while West Texas Intermediate is near $96. For now, bond yields are giving stocks some breathing room. The 10-year Treasury yield has slipped, hovering around the mid-4.5% range after rising earlier in the week.

And investors are very excited about chips again. The AI trade has regained force after wobbling earlier in the week. Nvidia's quarterly forecast was strong, though the stock slipped Thursday and only edged higher today. It helped lift the broader semiconductor group. AMD, Marvell, Broadcom, Intel, GlobalFoundries, D-Wave Quantum, and others are benefiting from renewed appetite for anything tied to computing power, data centers, and AI infrastructure.

The market's AI enthusiasm has several sources. UBS raised its year-end 2026 target for the S&P 500 to 7,900 from 7,500, citing resilient consumer spending and enormous demand for data-center infrastructure. Lenovo also added fuel to the story, reporting its fastest revenue growth in years and saying AI-related revenue accounted for 38% of total sales. The company now aims to reach $100 billion in annual revenue within two years.

Then there is the speculative side of the AI boom. Investors are watching for huge public offerings from SpaceX, eventually OpenAI, and perhaps later Anthropic. Reports that Anthropic may have reached positive operating profit earlier than expected have helped shift the conversation. If true, it suggests that at least some AI companies may not be bottomless spending machines dressed up as the future.

Elsewhere, Kevin Warsh is being sworn in as Fed chair at the White House, taking over from Jerome Powell. The symbolism is hard to miss: the last Fed chair sworn in there was Alan Greenspan in 1987. Warsh arrives with markets hoping for rate cuts, the White House clearly preferring them, and inflation still capable of ruining the party.

In corporate news, Workday shares jumped after the company beat expectations for first-quarter revenue and profit. Take-Two rose after confirming the November 19 launch date for Grand Theft Auto VI. Estée Lauder surged after merger talks with Spain's Puig ended, while Puig shares fell sharply in Europe. Deckers Outdoor showed strong demand for Hoka shoes, though its shares pulled back.

Today's economic highights:

On the agenda today: the monthly and yearly retail sales in the United Kingdom; the GfK consumer confidence and Ifo business climate in Germany; business confidence in France; foreign direct investment in China; final and preliminary monthly retail sales as well as retail sales excluding autos in Canada; in the United States, the final Michigan consumer sentiment index and the Fed Waller speech. See the full calendar here.

  • Dollar index: 99.302
  • Gold: $4,515
  • Crude Oil (BRENT): $105.75 (WTI) $98.78
  • United States 10 years: 4.56%
  • BITCOIN: $77,208

In corporate news:

  • GE Vernova agreed to acquire Canada-based Robotech Automation to expand its robotics and automation capabilities, with the deal expected to close in early Q3.
  • Live Nation Entertainment is facing a proposed court remedy from 34 U.S. states that would force it to divest Ticketmaster and some amphitheater assets.
  • EOG Resources doubled its share-repurchase authorization to $20 billion.
  • Goldman Sachs will pay $500 million to settle a shareholder class-action lawsuit tied to its role in the 1MDB scandal.
  • FedEx and partners will launch their €7.8 billion buyout offer for InPost from May 26 to July 27, while keeping the company's brand and Polish operating base.
  • Walt Disney, Netflix, Spotify, Sky and DAZN suffered an estimated €300 million in damages from a streaming piracy ring dismantled by Italian authorities.
  • Workday shares rose premarket after fiscal Q1 adjusted earnings and revenue beat expectations, helped by resilient AI-related demand.
  • Take-Two Interactive Software shares rose after better-than-expected fiscal Q4 results, while the company reaffirmed a November 19 launch for Grand Theft Auto VI.
  • Rocket Lab won a $90 million U.S. Space Force contract to build and operate two satellites carrying the Heimdall space-domain awareness payload.
  • Estée Lauder ends merger talks with Spain's Puig.
  • Anthropic is reportedly in talks to use Microsoft's AI chips, according to The Information.
  • AMD is ramping up capacity in Taiwan amid global CPU market tightness.
  • Take-Two gains 6% in after-hours trading following its quarterly results.
  • Ross Stores gains 5.5% in after-hours trading following its quarterly results.
  • Biogen and Denali abandon their Parkinson's treatment following a clinical failure.

Analyst Recommendations:

  • Alcoa: UBS upgrades to buy from neutral and raises the target price from USD 75 to USD 80.
  • Bloom Energy Corporation: Daiwa Securities upgrades to outperform from hold with a price target raised from USD 98 to USD 324.
  • Deckers Outdoor Corporation: KGI Securities Co Ltd downgrades to neutral from outperform and reduces the target price from USD 129 to USD 117.
  • Pinterest, Inc.: Baptista Research upgrades to buy from outperform with a price target raised from USD 20.80 to USD 26.70.
  • Zoom Communications, Inc.: KeyBanc Capital Markets upgrades to market weight from underweight.
  • Dell Technologies Inc.: Wells Fargo maintains its overweight recommendation and raises the target price from USD 180 to USD 270.
  • Hims & Hers Health, Inc.: Truist Securities maintains its hold recommendation and raises the target price from USD 18 to USD 23.
  • Intuit Inc.: HSBC maintains its buy recommendation and reduces the target price from USD 897 to USD 707.
  • Jazz Pharmaceuticals Plc: Piper Sandler & Co maintains its overweight recommendation and raises the target price from USD 232 to USD 301.
  • Lululemon Athletica Inc.: Piper Sandler & Co maintains its neutral recommendation and reduces the target price from USD 190 to USD 130.
  • Marvell Technology Group Ltd: Stifel maintains its buy recommendation and raises the target price from USD 140 to USD 210.
  • Nvidia Corporation: CITIC Securities Co Ltd maintains its buy recommendation and raises the target price from USD 242 to USD 315.
  • Ralliant Corporation: Melius Research LLC maintains its hold recommendation and raises the target price from USD 49 to USD 63.
  • Target Corporation: Roth Capital Partners maintains its neutral recommendation and raises the target price from USD 88 to USD 114.
  • Walmart Inc.: Punto Research maintains its buy recommendation and raises the target price from USD 105 to USD 135.
  • Workday Inc.: Jefferies maintains its hold recommendation and raises the target price from USD 115 to USD 140.