Morning Forecast: Thursday, 7 May
Tehran replies today. Either outcome moves everything.
This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).
👀 Today’s Stories at a Glance
🕊️ Iran’s Reply Could End War: Tehran replies today on Washington’s framework to reopen Hormuz and pause enrichment for twelve years.
💥 Israel Breaks Beirut Ceasefire: Strike on Hezbollah commander hours after deal news ratchets oil and defense tail risk back up.
⚡ PJM Calls For Market Redesign: Top United States grid operator says capacity market cannot match artificial intelligence (AI) demand surge.
🌬️ Microsoft Reconsiders 2030 Climate Pledge: Hourly clean-power match for 2030 under internal review as AI build adds gigawatt every quarter.
🎯 Counterterror Doctrine Targets Cartels, Antifa: Sixteen-page strategy formalizes lethal strikes, sanctions, and cyber operations against three new threat categories.
⚛️ IonQ Posts 755% Revenue Surge: Quantum pure-play raises full-year guide and books University of Cambridge as flagship 256-qubit customer.
💻 AMD Crushes Q1 And Guide: Data center revenue up 57% and June quarter guide $700 million above consensus on AI capex.
💸 Global Debt Hits Record $353T: Institute of International Finance flags investors rotating from Treasuries into Japanese and European sovereigns.
⚖️ Google Offers Brussels A Settlement: Alphabet files remedies offer on news ranking to dodge potential ten percent global revenue fine.
🧠 One Big Thing
Tehran delivers its formal reply today to a fourteen-point United States framework that would end the 68-day war, reopen the Strait of Hormuz, and pause uranium enrichment for twelve years. Markets are half-priced for the deal: the S&P 500 closed at a record 7,365.12, Brent settled down 7.8% at $101.27, and the Nikkei ripped to a record 62,009 overnight. The tension is what the framework leaves out. Iran's 400 kilogram near-weapons-grade uranium stockpile, its missile program, and its proxy network are untouched. Either outcome moves enormously from here. The signal to watch is Revolutionary Guard procedural language on Hormuz transit; it suggests whether the oil and risk-on rally extends or whips violently.
⚖️ Fear & Greed
📉 The Number That Matters
755%
IonQ's first-quarter revenue grew 755% year-over-year to $64.7 million, with that 755% surge and $470 million in remaining performance obligations signaling quantum has crossed from science project to a revenue-generating government and enterprise contract pipeline.
⚔️ Winners vs Losers
Winners
AGL 0.00%↑: Agilon Health surged after a blowout Q1 print, posting EPS of $1.80 versus the $0.95 consensus and raising full-year 2026 guidance for revenue, medical margin, and adjusted EBITDA, with new CEO Tim O’Rourke officially starting today.
SITM 0.00%↑: SiTime jumped after reporting Q1 revenue up 88% year-over-year to $113.6 million on surging AI data center demand, beating estimates and raising full-year 2026 revenue growth guidance to at least 80%.
FLNC 0.00%↑: Fluence Energy soared after announcing year-to-date order intake had doubled to $2 billion and revealing master supply agreements with two major hyperscalers, alongside a record $5.6 billion backlog that overshadowed a Q1 revenue miss.
PCT 0.00%↑: PureCycle Technologies climbed on a Q1 update showing record production of 8.4 million pounds, a fifth consecutive quarter of sequential revenue growth, and confirmation that its PureFive resin passed qualification for its first Procter & Gamble application.
BLBD 0.00%↑: Blue Bird rallied after delivering record fiscal Q2 profitability with adjusted EBITDA of $51 million and raising full-year 2026 guidance to $1.75 billion in revenue, citing strong demand and the MicroBird acquisition integration.
HNRG 0.00%↑: Hallador Energy spiked after signing a 12-year capacity agreement with a utility expected to generate over $1 billion in contracted revenue from 2028 to 2040, nearly doubling the company’s forward sales book despite a soft Q1.
Losers
FSLY 0.00%↑: Fastly tumbled despite beating Q1 estimates and raising full-year guidance, as investors took profits following the stock’s massive year-to-date rally and appeared unconvinced the results justified its elevated valuation.
ADMA 0.00%↑: ADMA Biologics dropped after Q1 revenue of $114.5 million missed the $142.7 million consensus and the company slashed its full-year 2026 revenue outlook to $530 to $560 million from over $635 million previously, citing competitive pressure and aggressive discounting in the immunoglobulin market.
AMPL 0.00%↑: Amplitude fell after its Q1 revenue beat was overshadowed by a non-GAAP EPS miss and full-year EPS guidance of $0.03 to $0.06, well below the $0.13 consensus, signaling weaker profitability than analysts had modeled.
📊 Market Snapshot
Cryptocurrencies:
Bitcoin (BTC): $80,752 (▼ -0.84%)
Ethereum (ETH): $2,324 (▼ -1.16%)
XRP: $1.41 (▼ -1.14%)
Equity Indices (Futures):
S&P 500: $7,369 (▲ 0.13%)
NASDAQ 100: $28,718 (▲ 0.00%)
FTSE 100: £10,363 (▼ -0.80%)
Commodities & Bonds:
10-Year US Treasury Yield: 4.33% (▼ -0.41%)
Oil (WTI): $93 (▼ -3.17%)
Gold: $4,736 (▲ 0.96%)
Silver: $80.47 (▲ 4.16%)
Data as of: UK (BST) 11:40 / US (EDT): 06:40 / Asia (Tokyo): 20:40
✅ 5 Things to Know Today
🕊️ Tehran’s Answer Lands Today
Markets are pricing today’s deal as half-cooked, and the asymmetry on either outcome is enormous. Iran is expected to deliver its formal reply through Pakistani mediators on the one-page, 14-point US framework that would end the 68-day war, reopen the Strait of Hormuz, lift US sanctions, release frozen Iranian assets, and defer nuclear negotiations behind a 12-year enrichment pause. President Trump told reporters yesterday the past 24 hours had produced “very good talks” and called a deal “very possible,” while warning that if Tehran refuses, the bombing resumes “at a much higher level and intensity than before.” Iran’s Revolutionary Guard navy said safe transit through the strait could resume under unspecified “new procedures.” The S&P 500 closed at a record 7,365.12 yesterday, the first close above 7,300, while Brent crude settled down 7.8% at $101.27. (CNBC)
Asian markets ripped overnight on the same hopes. Japan’s Nikkei surged 5.27% to a record 62,833.84 as it caught up after a three-day holiday, South Korea’s Kospi closed at a record 7,490.05, and Samsung Electronics crossed $1 trillion in market cap, only the second Asian company to hit the milestone after TSMC. The dollar slid to pre-war levels, gold pushed higher, and Treasury yields slipped on receding inflation expectations. The known unknowns matter just as much. Iran’s existing 440 kilogram stockpile of near-weapons-grade uranium isn’t addressed in the framework, ballistic missile programs aren’t curbed, and there’s no requirement for Tehran to drop support for proxies. Goldman has flagged global oil inventories falling toward 98 days of demand by end-May. (CNBC)
Sensei’s Insight: The deal Washington is offering defers everything Iran wanted deferred and drops most of what Trump demanded six weeks ago. That’s how negotiations end, but it pre-loads the next nuclear standoff. Watch the IRGC’s “new procedures” language; it tells you whether Tehran can sell this at home.
💥 Israel Hits Beirut, Tests the Iran Deal
Hours before Iran was set to formalise its response on the US framework, Israel struck Beirut for the first time since the April 17 ceasefire. Around 10 heavy bombs hit an apartment in the Haret Hreik neighbourhood of the southern suburbs, killing Malek Ballout, the operations commander of Hezbollah’s elite Radwan Force, his deputy and several fighters. Prime Minister Benjamin Netanyahu and Defence Minister Israel Katz announced the operation jointly. An Israeli official said the strike was coordinated with Washington in advance, though a separate Israeli source told Reuters the country had not been told a deal was close and was preparing for escalation. At least 11 other people were killed in strikes across the south and east of Lebanon yesterday. (Reuters)
For markets, this is the embedded tail risk on every Iran-deal headline today. Tehran has insisted any settlement with Washington must include a halt to Israeli operations in Lebanon, since Hezbollah is its most prized regional proxy. If the response from Hezbollah or Tehran overnight escalates, oil ratchets back up and the defence complex bid returns. Morgan Stanley equity strategist Kristine Liwag has flagged that further Middle East escalation is “not priced into US defence stocks today.” Lebanese Prime Minister Nawaf Salam and President Joseph Aoun have spent recent weeks pushing the highest-level direct contacts with Israel in decades, including ambassador-level talks in Washington and another meeting planned for next week. Last night puts that track on shakier ground.
Sensei’s Insight: Netanyahu marking territory on a deal that, by all reporting, doesn’t address Hezbollah disarmament. The strike timing was deliberate. Watch for Hezbollah’s response and any Litani-line evacuation orders today; a meaningful retaliation is what would reset oil and the defence bid in a hurry.
⚡ PJM Says the Grid Can’t Carry AI
The largest US grid operator just admitted the wholesale market it has run for 30 years cannot keep pace with AI. PJM Interconnection, which manages the high-voltage grid for 67 million people across 13 states plus Washington, D.C., published a major policy paper yesterday calling for fundamental redesign of the capacity market that pays generators to be available on demand. New permanent CEO David Mills, who took the role on May 1, framed the current setup as “not tenable” given exploding demand from AI data centres, and warned consumers face a “credibility trap” where high prices designed to attract new generation instead pressure governments into price caps that scare investment off. PJM forecasts electricity demand across its footprint will grow roughly 70% over the next two decades, almost entirely from data centres. (Reuters)
The capacity market PJM is now opening up cleared at $329.17 per megawatt-day in last July’s auction, sending the total annual capacity bill to a record $16.1 billion, sevenfold the $2.2 billion in 2023-24. Independent power producers like Constellation Energy (CEG), Vistra (VST), Talen and NRG have collected the windfall and become the cleanest AI-adjacent equity story of the past two years. Last week PJM disclosed that 811 new generation projects totalling 220 gigawatts had applied to connect through its reformed interconnection process, including 18 GW of nuclear and 67 GW of battery storage. The supply response is starting, but the lag between bid and breaker is still measured in years, not months. New gas plants take three to five years; new nuclear takes 10 plus; an AI data centre takes 18 to 24 months. That arithmetic is why hyperscalers keep trying to build behind the meter, and why the next 12 months of FERC and PJM rule-writing matter as much for Microsoft and Google capex as for any IPP’s revenue line.
Sensei’s Insight: AI’s binding constraint is no longer chips, it’s electrons. PJM’s redesign could become the most important policy variable for hyperscaler capex through 2030. The IPP trade is intact, but the next leg depends on whether long-term contracts replace the auction model.
🌬️ Microsoft Wavers on Its Cleanest Pledge
Microsoft is internally weighing whether to drop or delay its 2030 goal of matching 100% of its hourly electricity use with same-grid clean power, the strictest version of corporate net-zero accounting and the toughest pledge in Big Tech. The company is adding roughly one gigawatt of data centre capacity every three months, enough to power 750,000 homes, to support its AI build-out, and expects to spend $190 billion through end-2026 mostly on data centres. A spokesperson said Microsoft continues to look for ways to maintain its annual matching goal, but the hourly-matching version is the stretch target now under pressure. Microsoft is also reportedly in talks with Chevron about funding a major natural gas plant in West Texas’s Permian Basin, and recently signed a 1.2 GW carbon-free deal with Wisconsin’s We Energies. (Bloomberg)
The walkback would carry weight far beyond Redmond. Microsoft is the world’s largest buyer of carbon removal credits and a major counterparty for renewable developers including NextEra Energy (NEE), AES (AES) and Brookfield Renewable (BEPC). If the most credible Big Tech climate pledge is softened, Google, Amazon and Meta have more cover to do the same, with read-through to ESG-fund holdings and clean-energy contract pipelines. The Permian gas talks with Chevron confirm what gas turbine maker GE Vernova (GEV) and gas producers EQT and Coterra have signalled in their own results: gas is the bridge fuel for AI, and the bridge is going to be longer than the 2030 net-zero math assumed. Microsoft’s emissions have already risen more than 23% since its 2020 baseline on data-centre build, and the company quietly paused new carbon removal purchases earlier this year.
Sensei’s Insight: The cleanest tell on whether AI demand has broken the climate consensus is what Microsoft does next. If the pledge is dropped, every other hyperscaler follows within 12 months, and the Permian gas trade gets a structural tailwind nobody had penciled in. ESG-fund rebalancing is the nearer-term equity flow.
🎯 Trump Turns Counterterror on Cartels and Antifa
White House counterterrorism director Sebastian Gorka unveiled a 16-page National Counterterrorism Strategy yesterday that names three primary threat categories: Latin American drug cartels and gangs, legacy Islamist groups including the Muslim Brotherhood, and “violent left-wing extremists” including Antifa. The strategy formalises a posture already underway. Since January 2025 the US has designated multiple Mexican cartels and Venezuelan-linked groups as Foreign Terrorist Organizations, conducted at least 56 lethal strikes on suspected drug-trafficking boats in the Caribbean and eastern Pacific, and run the January operation that ousted Venezuelan President Nicolas Maduro. The document authorises broader intelligence, financial and military action against all three categories, including offensive cyber operations. (Reuters)
The retail-investor angle sits at the intersection of three trades that have been compounding for a year: defence, border-security technology, and Latin American emerging-markets risk. The strategy effectively makes Caribbean deployments, special-operations raids and covert action permanent, with direct revenue implications for Lockheed Martin (LMT), RTX, Northrop Grumman (NOC), General Dynamics (GD) and surveillance and reconnaissance names like Kratos (KTOS), AeroVironment (AVAV) and Palantir (PLTR). It also creates discrete tail risk for Mexican equities and the peso, Colombian assets and Venezuela-exposure plays like Chevron (CVX). Gorka indicated possible new FTO designations could come around tomorrow’s Trump-Lula meeting in Washington. The redirection of the “counterterrorism” label toward domestic groups also broadens the financial-sanctions toolkit federal agencies can deploy at home, with civil-liberties and tech-platform headline risk that ESG screens are not yet catching.
Sensei’s Insight: This is the war on terror coming home, geographically and ideologically. Defence primes get a structural floor, Mexican and Colombian assets get a new tail risk, and Chevron’s Venezuela operations are now a political asset rather than a liability. Watch the Lula meeting tomorrow for the next FTO name.
Stories You Might Have Missed
⚛️ IonQ delivers a quantum blowout
IonQ reported first-quarter 2026 results after the close yesterday that obliterated expectations. Revenue came in at $64.7 million, up 755% year over year and roughly 30% above the midpoint of guidance, against a Wall Street estimate near $50 million. The quantum computing pure-play raised full-year 2026 revenue guidance to $260-270 million from $225-245 million, guided Q2 revenue to $65-68 million, and pointed to remaining performance obligations of $470 million, up 554% year over year. Shares jumped about 9.5% in after-hours trading. Highlights included the sale of IonQ’s first 6th-generation, chip-based 256-qubit system to the University of Cambridge, selection for DARPA’s HARQ Program, and over $3.1 billion of cash on the balance sheet. The reported $805 million GAAP net income is largely a non-cash warrant mark; on an adjusted basis the company posted a 34-cent loss per share. For retail, this is the cleanest read yet that quantum has moved from science project to revenue-generating government and enterprise contracts. (Investing.com)
💻 AMD blows the doors off
Advanced Micro Devices reported first-quarter earnings Tuesday after the close that ripped past estimates: revenue of $10.25 billion versus $9.89 billion expected (up 38% year over year), adjusted EPS of $1.37 against $1.29, and a Q2 revenue guide of around $11.2 billion versus the $10.5 billion Wall Street had penciled in. The data centre segment surged 57% to $5.8 billion, driven by EPYC server chips and Instinct GPU accelerators. Shares jumped roughly 18% in pre-market and held a 16% gain at yesterday’s close, lifting the stock to record territory above $400. CEO Lisa Su called the quarter “a clear inflection in our growth trajectory.” For retail, the cleanest read is that the AI capex story isn’t slowing, and the AMD-Nvidia gap is closing on CPUs even faster than on GPUs. (CNBC)
💸 Global debt hits a record $353 trillion
The Institute of International Finance’s Q1 2026 Global Debt Monitor, released yesterday, put total global debt at a record near $353 trillion at end-March, up roughly $4.4 trillion in the quarter, the fastest pace since mid-2025 and the fifth consecutive quarterly rise. The headline shift in tone from the IIF: international investors are starting to diversify away from US Treasuries, with stronger demand flowing into Japanese government bonds and European sovereigns. Demand for Treasuries has been “broadly stable” while US issuance has surged, which the IIF flagged as the cleanest read on the structural drift toward gold and non-dollar duration. Author Emre Tiftik called the long-run US fiscal trajectory “unsustainable” while noting “no immediate risk” in the $30 trillion Treasury market. Global debt as a share of world GDP held at 305%. (Reuters)
⚖️ Google’s EU settlement gambit
Google has filed a formal remedies offer with the European Commission, proposing changes to how it ranks news content under its “site reputation abuse” policy, in an attempt to settle a Digital Markets Act investigation opened in November 2025 and avoid a fine of up to 10% of Alphabet’s global annual revenue. The European Publishers Council had argued the policy disproportionately demotes news pages that include affiliate marketing or third-party content, drying up traffic and ad dollars. Google’s offer adjusts the policy’s application to news domains and improves transparency on demotions. The Commission will market-test the offer with rivals and publishers before deciding whether to close the probe or proceed to a formal infringement decision. Cumulative EU antitrust fines against Google have already reached €9.71 billion since 2017. (Reuters)
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This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).