Oil Fell 7%. Nvidia Still Has to Prove More.

GOOD MORNING, U.S. cash markets were closed Monday for Memorial Day, but the global tape still moved. Brent and WTI fell nearly 7% as investors bet the U.S. and Iran were edging toward a deal that could eventually reopen the Strait of Hormuz. European stocks rallied, bond yields fell and U.S. equity futures pointed higher. The relief comes after an eighth straight weekly gain for the S&P 500 — but the AI trade is entering a tougher phase. Nvidia just delivered another record quarter and still fell. Great numbers remain necessary. They are no longer sufficient.

MARKETS | TLDR

Oil plunged on Iran peace hopes: Brent fell almost 7% to about $96.30 and WTI dropped 6.5% to $90.88 as traders priced a higher probability of eventual Hormuz reopening.
Global risk assets rallied while U.S. markets were closed: The STOXX 600 rose around 1%, Nasdaq futures gained 1.4% and S&P 500 futures added about 1% as oil and the dollar weakened.
Friday left the S&P 500 on an eight-week winning streak: The Dow closed at a record 50,579.70, while the S&P 500 gained 0.37% and the Nasdaq rose 0.19%.

OIL

A 7% Oil Drop Just Changed the Macro Setup

Oil prices fell nearly 7% Monday as optimism grew that Washington and Tehran were moving closer to an agreement that could eventually reopen the Strait of Hormuz. Brent dropped to about $96.30 a barrel and WTI to roughly $90.88 in thin Memorial Day trading.

The market transmission matters because the nearly three-month conflict had pushed energy prices higher and changed the global rates outlook. Hormuz handled around one-fifth of global oil and LNG shipments before the war. Any credible path toward reopening reduces the inflation premium embedded in crude, shipping, bond yields and equity discount rates.

The caveat is physical supply. Both sides continued to play down the idea that a final agreement was imminent, and analysts warned that normal oil flows could take months to restore even after a deal. Roughly 10–11 million barrels per day of crude supply remained disrupted, according to Sparta Commodities. Monday’s move was a repricing of future risk, not evidence that the physical shortage had disappeared.

NVIDIA

Nvidia Beat Again. The Stock Still Fell.

Nvidia reported first-quarter revenue of $81.62 billion, above the $78.86 billion Wall Street estimate, with data-center revenue reaching $75.2 billion. It forecast second-quarter sales of roughly $91 billion versus $86.84 billion expected and announced an $80 billion share-repurchase program.

Yet the stock fell after the report and finished Friday down 1.9%. That reaction is the clearest sign that Nvidia’s challenge has shifted from proving AI demand exists to proving that extraordinary growth can persist far enough into the future to justify extraordinary expectations.

The competitive backdrop is also changing. Nvidia’s largest customers are simultaneously spending heavily on their own custom silicon, while Google, Amazon, AMD and Intel are all competing for parts of the inference market. Jensen Huang says Nvidia should grow faster than hyperscaler capex. Investors increasingly need him to be right. A normal beat is no longer enough when the market already expects one.

HEADLINES

Dell and HP surged after Lenovo’s strong quarter: Dell rose 17% and HP gained 15% after Lenovo reported a 27% revenue increase, another sign that AI and enterprise hardware demand remained strong ahead of Dell’s own earnings.
Qualcomm jumped 12% Friday: The move helped lift the semiconductor index even as Nvidia slipped, showing that chip leadership was broadening rather than moving as one trade.
Magnificent Seven bond issuance hit $134 billion: Big Tech debt sales had already exceeded all of 2025’s $87.5 billion total as Alphabet, Amazon and Meta financed the AI data-center race.
S&P 500 capex is expected to rise 33% this year: Goldman data suggests the AI spending boom is accelerating much faster than buybacks, raising a new question about how capital allocation affects shareholder returns.
Long Treasury yields remained a valuation constraint: The 10-year yield had recently touched its highest level since January 2025 and the 30-year its highest since 2007, keeping the equity risk premium under pressure.

UPCOMING

Dell earnings — May 28: Dell will test whether hyperscaler and enterprise AI spending is translating into another step-up in server orders, revenue and guidance.
April PCE inflation — May 28: The Fed’s preferred inflation gauge is the week’s biggest macro test after the Iran conflict pushed energy prices and long-term yields higher.
Second estimate of Q1 GDP — May 28: Revised growth will matter because investors are balancing hotter inflation against signs the economy may be losing momentum.
U.S.-Iran negotiations: Any concrete agreement on Hormuz shipping could remove more of the oil risk premium; another breakdown would quickly reverse Monday’s relief.

DEEP INSIGTHS

Major Takeaways From Magnificent Seven’s AI-Fueled Earnings

Read this for the capital-allocation story behind the AI boom. Magnificent Seven bond issuance has surged to $134 billion, while S&P 500 capex is forecast to grow 33% this year. AI demand remains strong, but the buildout is increasingly being financed with debt and is competing directly with buybacks for corporate cash.

Wall Street Week Ahead: Soaring Stocks Face a Tougher Macro Test

This is the cleanest setup for the shortened week. Strong earnings have helped stocks look through high oil prices and rising bond yields, but earnings season is winding down just as PCE inflation and long-term rates move back to center stage. The market’s next test is whether macro relief can take over from earnings as the main support for valuations.