The S&P 500 (^GSPC) punched to a fresh record Wednesday, with the broader market index now perched above 7,300. With a 7.6% YTD gain in the S&P 500 (^GSPC), bulls are back in control, citing a roughly 15% rally off the March low as AI earnings, easing Iran tensions, and softer crude combine to push higher.
Oil prices were choppy Thursday as traders continued to monitor the fluid situation between the U.S. and Iran, but both WTI and Brent Crude are now trading below the $100/barrel threshold. Citi U.S. equity strategist Scott Chronert cautioned that the duration of the conflict carries meaningful implications for broader economic conditions. Shell reported that first-quarter profits more than doubled, but flagged reduced gas production stemming from the war’s disruptions, sending shares roughly 2% lower.
So far, this earnings cycle is shaping up as one of the strongest on record. Deutsche Bank has characterized it as potentially one of the best earnings seasons in two decades, with S&P 500 profit growth tracking near 25%, more than double the historical pace outside of recessions, and beat rates running well above long-term averages. Analysts, rather than trimming estimates as is typical mid-cycle, are actually revising numbers higher.
On the economic front, initial jobless claims for the most recent week came in at 200,000, below the consensus estimate of 205,000. The stronger-than-expected reading points to continued resilience in the labor market and gave equity investors an additional layer of confidence heading into the session.
AMD lights the AI fuse
The biggest catalyst was Advanced Micro Devices (NASDAQ:AMD | AMD Price Prediction). Shares ripped almost 19% to roughly $421 after Q1 revenue of $10.25 billion and non-GAAP EPS of $1.37 topped the $1.29 estimate. Data Center revenue jumped 57% to $5.78 billion, and CEO Lisa Su guided Q2 to around $11.2 billion, calling it an “outstanding first quarter, driven by accelerating demand for AI infrastructure” and told investors the CPU market could top $120 billion by 2030, growing more than 35%.
The report lifted the entire AI complex. NVIDIA (NASDAQ:NVDA) added almost 6% to about $208 on volume of 184 million shares. T
Earnings Parade
Consumer strength showed at McDonald’s (NYSE:MCD): EPS of $2.83 beat $2.74, and global comps came in at +4%. Media was messier. Warner Bros. Discovery (NASDAQ:WBD) posted a Q1 loss of $1.17 per share after paying Netflix a $2.80 billion termination fee tied to the pending Paramount Skydance merger. On the other end of the ledger, Whirlpool slashed its full-year earnings outlook roughly in half and suspended its dividend, sending the stock down 18% before the open.
Shell (NYSE:SHEL) reported Q1 adjusted earnings more than doubled to $6.92 billion and announced a $3 billion buyback, but shares slipped almost 3% to around $87 on warnings tied to the Pearl GTL attack and Strait of Hormuz disruptions.
What to watch next
Away from the tape, Anthropic CEO Dario Amodei disclosed that while his company had planned for 10x growth, actual revenue and usage surged 80x on an annualized basis in Q1 — a data point that speaks to the accelerating pace of AI adoption and helps explain why investors continue to reward the sector with premium valuations. Coinbase, Airbnb, and Datadog headline tonight’s earnings. The 10-year Treasury at 4.43%, the Fed on hold at 3.75%, and any fresh Iran headlines remain the macro swing factors capable of testing this rally’s footing.
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