Stocks shrugged off the hottest inflation print in nearly three years and closed at fresh records on Thursday. The S&P 500 and Nasdaq both hit all-time highs as tech led the charge, powered by a monster Snowflake earnings beat. Meanwhile, a possible 60-day ceasefire extension between the U.S. and Iran helped push oil below $90 for the first time in six weeks. The Dow barely moved, but the message was clear: this market does not care about your inflation fears.
Market Snapshot
| INDEX | CLOSE | CHANGE |
|---|---|---|
| S&P 500 | 7,563.63 | +0.58% |
| Nasdaq | 26,917.47 | +0.91% |
| Dow Jones | 50,668.97 | +0.05% |
| Bitcoin | $73,760 | -0.70% |
| Ethereum | $1,989 | -3.85% |
What Moved Markets
Inflation ran hot, and nobody flinched. April’s PCE price index, the Fed’s preferred inflation gauge, came in at 3.8% year over year. That is the highest reading in nearly three years, driven largely by energy costs tied to the Iran conflict. Markets opened lower on the data, then reversed course and rallied into the close. The takeaway: traders have priced in “higher for longer” rates and moved on. Most economists now expect the Fed to hold rates steady through the rest of 2026, and some think the next move could be up, not down.
Snowflake exploded higher on earnings and a massive Amazon deal. Shares jumped 36% after the cloud data company crushed Q1 estimates and announced a $6 billion, multi-year commitment with Amazon Web Services. That kind of spending signals the enterprise AI buildout is still accelerating, and it dragged the broader tech sector along for the ride. Microsoft also climbed on analyst upgrades and news about in-house AI model development.
Geopolitics gave and took in the same breath. Iran’s Revolutionary Guard launched strikes on a U.S. air base in retaliation for earlier American attacks near the Strait of Hormuz. Sounds bad, and it is. But markets focused on reports that Washington and Tehran are close to a 60-day memorandum extending the ceasefire and gradually reopening energy exports. WTI crude fell to just under $90 a barrel on the truce talk, its lowest level in six weeks. The casino sector also had a moment: Fertitta Entertainment agreed to acquire Caesars Entertainment for $31 per share in cash.
Goldman raised its S&P 500 year-end target to 8,000. The bank previously had 7,600 as its call, citing a solid earnings backdrop. Meanwhile, Best Buy beat earnings and surged 8.4%, Dell landed a $9.7 billion military contract, and Salesforce dipped despite solid results as investors flagged heavy AI spending. The theme: companies spending on AI are getting rewarded, unless the market decides they are spending too much on AI. Good luck drawing that line.
Worth Watching
Dell reports after the close today. The $9.7 billion Pentagon deal gave shares a lift, but the real question is whether AI server demand is translating into margins. Watch for guidance on that front.
SpaceX Starship flights are paused. The FAA opened a probe after last week’s booster mishap, where it hit the Gulf of Mexico at high speed instead of a controlled splashdown. This comes as SpaceX prepares for what could be one of the largest IPOs in history under the ticker SPCX on Nasdaq.
The Fed is effectively on pause. After today’s PCE print, rate cut expectations have evaporated for 2026. If you were positioning around a dovish pivot, that trade is dead for now.
Bottom Line
The market is telling you something worth listening to: it has stopped waiting for rate cuts. Stocks are rallying on earnings momentum, AI spending, and the slow de-escalation of the Iran situation, not on hopes that the Fed will ride to the rescue. That is actually a healthier foundation than chasing pivot fantasies, but it also means there is no safety net if earnings disappoint or the ceasefire collapses. If you hold positions, you are riding a market that is grinding higher on fundamentals while ignoring real risks. That can work for a while. Just know what you own and why you own it.
