Nvidia Non-Event,
Geopolitical Noise, VIX Shrugs

U.S. Futures & World Markets

S&P futures are slightly lower premarket after Reuters reported that Iran's Supreme Leader issued a directive that the country's near-weapons-grade uranium should not be sent abroad. A hardening of Tehran's stance on peace talks has investors hitting the pause button.

Nvidia reported earnings last night, and the stock is flat premarket. Considering NVDA was up 17% over the last three months, a lot of the good news was clearly priced in. This was a complete non-event. The bulls are still positive on the stock, and the bears are sticking to their guns. We'll find out who is right over the next twelve months.

As always, I'm watching the VIX for clues on investor sentiment. Datatrek Research summed up the current environment well:

In other words, despite all the geopolitical noise, the options market still isn't showing signs of real panic.

CORE Headlines

• Iran says latest U.S. proposal has "narrowed the gaps to some extent." Iran in the process of issuing a response. — Bloomberg
• Nvidia reported record sales and earnings, driven by surging demand for datacenter computing and the astronomical rise of AI agents. — WSJ
• President Trump will sign an artificial intelligence and cybersecurity executive order today. — WSJ
• The Trump administration will award $2 billion in grants to quantum computing companies and take equity stakes. — WSJ
• Fed officials at their meeting last month all but retired the question of whether to cut interest rates and began seriously weighing whether to raise them. — WSJ
• ChatGPT maker OpenAI has been working with bankers to prepare to file for an IPO in the coming days or weeks. — WSJ
• Kroger planning to cut prices to compete with Walmart and Costco. — Bloomberg
• Eli Lilly's triple agonist retatrutide delivered powerful weight loss in pivotal Phase 3 obesity trial.
• Advance Auto beats by $0.34, beats on revenue; reaffirms FY26 guidance; Q1 comps +3.5%.
• Putin traveled to Beijing, looking for support for Russia's economy and to demonstrate close ties with China. — WSJ
• Harvard faculty voted to approve a cap on the number of A's per course as part of a long push to curb grade inflation. — WSJ

Charts & Data

US economy outperforming peers since the start of the war. TS Lombard: "Since the start of the war, the US economy has significantly outperformed peers. This has resulted in only modest 2026 GDP growth forecast downgrades for the US, while other countries have seen their prospects deteriorate more significantly." The energy shock is a global headwind but a relative US tailwind.

US earnings leadership is widening vs. the rest of the world. Manish Kabra, SocGen via Daily Chartbook: "Earnings leadership remains firmly US-centric. EPS revision ratios across Nasdaq (~2.5), S&P 500 (~1.8), S&P 400 (~1.5), and S&P 600 (~1.3) all sit above global peers." This is the structural argument for staying overweight US equities.

Fund managers expect Hormuz to reopen by end of June. BofA via Daily Chartbook: "54% of fund managers think the Strait opens by the end of June (5 weeks). 76% think crude ends the year below $90, with the average response at $85. Dec Brent is currently at $92. Too optimistic? Still vulnerable to more delays?" The market is pricing in a resolution. If it doesn't come, yields and oil stay elevated longer.

Volatility is not dead — it's just concentrated. Charlie McElligott, Nomura via Daily Chartbook: "Vol is not 'dead.' It is concentrated in mega-cap AI and the biggest names in the index." Under the surface, individual name volatility is substantial.

Hedge fund short exposure at fresh 10-year highs. Goldman Sachs via Daily Chartbook: "Short exposure has now moved above pre-Iran ceasefire levels and is sitting at fresh 10-year highs." A record number of hedge funds are betting against the market — and so far, they're losing. That fuel source hasn't been exhausted.

Active funds under-own the five biggest tech names. Morgan Stanley via Daily Chartbook: "Of the large-cap stocks we evaluate, NVDA, AAPL, MSFT, AMZN, and GOOGL are currently the most under-owned in actively managed portfolios vs. the S&P 500." Despite everyone talking about AI concentration, the biggest names remain underweight in active funds.

Tech overbought RSI historically bullish — S&P posts 54% annualized returns when tech leads. @bluekurtic via Daily Chartbook: "Tech is currently the most overbought sector, and is another sign this bull market may have room to run. When tech leads on RSI, the S&P 500 posts its strongest returns at 54% annualized."

High-yield credit breadth breaking down — watch this. Jim Carroll, Vixology via Daily Chartbook: "A measure of breadth for the publicly-traded high-yield market has lost the script, and that is not bullish for equities." Credit often leads equities at turning points.

Downside hedges at cheapest levels in 20 years. Goldman Sachs via Daily Chartbook: "Downside hedges are at some of the cheapest levels in 20 years." Cheap insurance in a crowded market is worth noting.

Mortgage demand declining — 30-year rate at 6.73%. Haver Analytics via Daily Chartbook: "Both purchase and refi applications declined. Interest rate on 30-year fixed-rate loans rose 9 bps to 6.73%. Average loan size declined." The housing market remains under pressure from elevated rates.

Interesting Reads

• A psychologist's top 5 signs your cognitive load is too high — Fast Company. "Research has found that high cognitive load reduces both behavioral and neural empathic responses. An overloaded brain is simply less able to read other people's emotional states."
• Meta's new reality: record high profits, record low morale — Wired
• Ben Evans on OpenAI's "Deployment Company" launch — Ben Evans. "There used to be a joke that an 'AI scientist' is a statistician who lives in San Francisco — maybe now Accenture will rename all their staff 'forward deployed engineers.'"

Want this in your inbox every morning?

Morning Core subscribers get this analysis two days before it's published here — plus charts, data, and Nick's unfiltered take on the markets. It's free.