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Happy Friday. The S&P 500 just rallied seven straight days. Consumer sentiment just hit a record low. TSMC posted 35% revenue growth. And half the software sector is sitting at 52-week lows. If you feel like this market is telling two completely different stories depending on where you look, you're paying attention.
S&P 500: 6,813.24 (-0.17%, +3.5% weekly). Dow: 47,912.20 (-0.57%, +3.0% weekly). Nasdaq: 22,868.84 (+0.20%, +4.5% weekly). WTI: ~$99. Gold: $4,761. Bitcoin: $73,239. VIX: 19.49. 10Y: 4.29%. DXY: 98.65.
THE RUNDOWN
WAR › The ceasefire is holding, barely. Trump agreed to suspend bombing for two weeks on Tuesday, and Iran's new supreme leader accepted. Markets ripped. But by Thursday, Trump was warning that Iran is reportedly charging tolls on tankers passing through the Strait of Hormuz: "They better not be and, if they are, they better stop now."
On Friday, he praised Palantir ($PLTR) for its "great war fighting capabilities and equipment." Oil dropped back near $99, but the World Bank warned this week that the conflict could still shave 0.3% to 1.0% off global GDP and add up to 0.9 percentage points to inflation. The ceasefire bought time. It didn't buy clarity.
MACRO › CPI came in at 3.3% year-over-year this morning, just below the 3.4% consensus. Sounds like good news until you read the details. Nearly 75% of the monthly increase came directly from energy prices. The gas price component posted its largest climb since 1967.
Core inflation actually cooled, which gives the Fed some cover, but the University of Michigan consumer sentiment index collapsed to a record low. Consumers are feeling the squeeze even if the headline number cooperated.
AI › The AI hardware trade got fresh fuel this week. TSMC posted Q1 revenue growth of 35%, beating expectations and prompting analysts to raise Q2 forecasts. Broadcom ($AVGO) locked in a multiyear deal with Google to build future generations of custom TPUs. Intel and Google announced a collaboration on next-gen AI cloud infrastructure. And Google launched AI-powered Google Finance globally across 100+ countries. Semis led the market Friday, with Nvidia and Broadcom among the top performers. The capex cycle is still accelerating.
EARNINGS › Delta beat on both lines. EPS of $0.64 vs $0.61, revenue of $15.9 billion vs $14.9 billion. The stock jumped 11%. Management pulled back on capacity growth as fuel costs and macro uncertainty rose, but demand held up. Constellation Brands ($STZ) beat by 9.2% on EPS but withdrew its fiscal 2028 outlook, which caps the story. Next week is the real event: JPMorgan ($JPM), Wells Fargo ($WFC), Citigroup ($C), and BlackRock ($BLK) all report Monday. Netflix ($NFLX) Thursday. ASML ($ASML) Tuesday. This is when earnings season actually starts.
WARNING › While AI hardware rallies, software is getting quietly destroyed. The iShares Software ETF ($IGV) closed Thursday at its lowest level since 2023. On Friday alone, Salesforce ($CRM), Adobe ($ADBE), Snowflake ($SNOW), ServiceNow ($NOW), Intuit ($INTU), and Atlassian ($TEAM) all hit new 52-week lows. The market is drawing a hard line between companies that build AI infrastructure and companies whose business models AI might replace. If you own software names, this distinction matters right now.
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THE PLAY: Two Markets in One
There are two markets right now. You need to know which one you're in.
The AI hardware market is winning.
TSMC posted 35% revenue growth. Broadcom signed a multiyear TPU deal with Google. Intel and Google announced a cloud infrastructure collaboration. Nvidia is back above $175. The semiconductor index has rallied every week since the ceasefire reports started. The capex cycle behind AI is real, it's accelerating, and it's showing up in actual revenue, not just guidance.
The software market is breaking.
The iShares Software ETF ($IGV) hit its lowest level since 2023 on Thursday. Salesforce, Adobe, Snowflake, ServiceNow, Intuit, and Atlassian all printed new 52-week lows on the same day. The fear is straightforward: if AI makes software cheaper and faster to build, the companies selling expensive seats and subscriptions are the ones who get squeezed. The market is pricing that in right now, aggressively.
The quiet winner nobody's talking about.
Utilities. The S&P 500 Utilities index gained 7.5% in Q1 while the broader S&P fell 4.6%, its best relative start since 2019. The reason isn't just defensive positioning. Deloitte estimates data centers could consume 17% of total U.S. electricity by the end of the decade. Utilities with direct data-center exposure (AEP, NEE, DUK, XEL, D) are being repriced as AI infrastructure plays. The second-derivative winners might not be the chip companies. They might be the ones supplying the power.
The positioning takeaway.
Bank earnings Monday will set the tone for Q2. If JPM, Wells, and Citi show credit quality holding and investment banking rebounding, the rally has legs. If they're building reserves and flagging consumer stress, the seven-day streak was a head fake. Watch credit quality. That's the tell.
One more thing before the weekend. If you earn too much for a direct Roth IRA contribution and haven't funded tax year 2025 yet, you have until April 15 to do a backdoor Roth. Make a nondeductible traditional IRA contribution ($7,000, or $8,000 if you're 50+), then convert it. The catch is the pro-rata rule: if you hold pre-tax IRA balances, the conversion creates a tax bill. File Form 8606 correctly. Five days left.
RALLIES RADAR
Rallies flagged utilities as the quiet outperformer this week, and the data backs it up. The sector gained 7.5% in Q1 while the S&P fell 4.6%. But Rallies is also tracking the AI vs. software divergence in real time, including which names are showing institutional accumulation and which are seeing continued selling. If you want to see how the AI models are positioning through the split, the portfolio data is on the platform.
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