The four numbers Friday is opening on.
Thursday’s S&P record close, the soft core PCE print, the Iran truce wording reached, and Snowflake’s $6B AWS deal headline-frame the final session of May. The detailed account follows in the section below.
7,563.63
S&P 500 (Thu close)
+0.58% · fresh record despite hot headline
3.3% YoY
Core PCE · April
vs 3.8% cons · biggest soft surprise in a year
$93.15
Brent (Thu close)
−1.72% · 60-day truce reached, signature pending
+36%
Snowflake · AH
$6B AWS deal · Q1 +33% YoY · raised FY guide
A soft PCE, fresh records, and the Iran framework wording done.
Thursday’s April core PCE inflation came in materially below consensus and reset the data backdrop for the rest of the quarter. Headline PCE landed at 3.8% YoY and 0.4% MoM (versus 0.5% consensus); core PCE — the Fed’s preferred measure — printed 3.3% YoY (versus 3.8% consensus), the largest downside surprise in over a year. The supercore (services ex-housing) — the FOMC’s most-cited read on sticky inflation — landed at 3.05% YoY, the lowest of the cycle and within 5 bps of the Fed’s implicit 3% target. The chart of the day visualises the 18-month grind from 4.65%. The market took the print as confirmation that the underlying inflation pulse remains in soft-landing territory: the S&P 500 added 0.58% to 7,563.63 — a fresh record close; the Nasdaq Composite +0.91% to 26,917.47, also a record; the Dow eked 0.05% to 50,668.97. The long end rallied 7 bps with the 10-year at 4.42%; Fed funds futures repriced the September cut probability from 68% to 79%.
The Iran framework crossed a real threshold. The US and Iran reached a tentative agreement Thursday for a 60-day truce extension that includes unrestricted vessel traffic through the Strait of Hormuz and US naval blockade relief — the wording is done but the agreement still requires Trump’s final signature. Limited US-Iran skirmishes Wednesday and Thursday (Iran fired a ballistic missile toward Kuwait late Wednesday, intercepted; the US responded with a strike on an Iranian air base) underline that the deal is fragile until signed. Brent fell another 1.7% to $93.15. The Vault Hormuz indicator moves to RESTRICTED on the wording-agreed status (from CLOSED) with throughput at ~8.5 mb/d; OPEN waits on the Trump signature.
After the close, Snowflake reported Q1 product revenue +34% YoY at $1.33 billion with revenue +33% YoY at $1.39 billion — the strongest sequential dollar growth in the company’s history — and announced a $6 billion multi-year AWS infrastructure commitment, the largest in its history. SNOW +36% after-hours; the read across to data-infrastructure peers is constructive. Dell extended +6.4% after-hours on a $9.7B Pentagon software contract and the strongest quarterly sales growth since 2018. Today’s macro is light — Chicago PMI at 09:45 ET, Michigan final sentiment at 10:00 ET — but month-end rebalancing flows and the FX fixing at 16:00 GMT are the technical anchors of the session.
Soft PCE extends the bid; long end rallies; oil lower again.
Thursday’s session unfolded in one move: a soft core PCE pulse let both the S&P 500 and Nasdaq Composite close at fresh records, the long end rallied 7 bps as the September-cut probability moved into the high 70s, and Brent extended lower on the Iran truce wording. Month-end rebalancing is the structural anchor for today; AI-infrastructure read-throughs from Snowflake and Dell are the headline single-name moves.
7,563.63
S&P 500 (Thu close)
+0.58% · 2nd consecutive record close
3.3% YoY
Core PCE (April)
vs 3.8% cons · biggest soft surprise in a year
+36%
Snowflake AH
$6B AWS deal · Q1 +34% YoY
79%
Sep cut probability
repriced from 68% · long end rallied 7 bps
fresh record close · 2nd consecutive · driven by the soft core PCE pulse
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60-day truce wording reached · Trump signature pending
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long-end rallies on soft core PCE · September cut prob to 79%
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Note: yield-down = green, yield-up = red (bond-price convention).
strongest sequential dollar growth in company history · FY guide raised
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The supercore at 3.05%: cycle low; the soft-landing data.
Chart of the Day
The supercore at 3.05%: the soft-landing data Powell built the framework around.
Yesterday's April core PCE landed at 3.3% YoY — meaningfully below the 3.8% consensus and the largest downside surprise in over a year. The supercore — services ex-housing, ex-energy, the measure the Fed leadership has spent two years pointing at as the cleanest read on the sticky-inflation problem — printed 3.05% YoY, a cycle low. Headline PCE held at 3.8% YoY (0.4% MoM versus 0.5% consensus) and the markets read the gap as confirmation that the underlying inflation pulse is still grinding lower, even as energy-cycle volatility pushes headline noise around. Fed funds futures repriced the September cut probability from 68% to 79% on the print; the long end rallied 7 bps with the 10-year now at 4.42%.
Sources: Bureau of Economic Analysis April 2026 release; FRED PCEPILFE; Cleveland Fed median PCE series. Supercore = services ex-housing, ex-energy components of core PCE — the measure the FOMC has repeatedly cited as its preferred read on the underlying inflation pulse.
Three headlines shaping today's session.
Macro
April core PCE 3.3% YoY — the biggest downside surprise in over a year
The April core PCE deflator landed at 3.3% YoY versus 3.8% consensus — a 50-bp downside surprise and the largest soft print in over a year. Headline PCE 3.8% YoY and 0.4% MoM versus 0.5% cons. The supercore (services ex-housing) hit 3.05% YoY, a cycle low. Fed funds futures repriced the September cut probability from 68% to 79%; the 10-year rallied 7 bps to 4.42%. Williams and Daly's framing this week was explicit on patience until the supercore breaks decisively below 3% — one more good print in May (out 27 June) and the September cut consensus likely moves above 85%.
BEA · Schwab · CNBC · Thu 28 May
AI Capex
Snowflake +36% after-hours on $6B AWS deal and a Q1 beat
Snowflake reported Q1 product revenue $1.33 billion (+34% YoY) — the strongest sequential dollar growth in the company's history — and announced a $6 billion multi-year AWS infrastructure commitment, the largest deal in the company's history. SNOW +36% after-hours. Management raised FY product revenue guidance to $5.8 billion from $5.7 billion. Dell extended +6.4% after-hours on a $9.7B Pentagon software contract and the strongest quarterly sales growth since 2018. The combined read for data-infrastructure peers (MDB, ESTC, NET, DDOG) is constructive into a quiet single-name calendar next week.
SEC · Yahoo Finance · Motley Fool · Thu 28 May
Geopolitics
US-Iran reach tentative 60-day truce framework; Trump signature pending
The US and Iran reached a tentative agreement Thursday on a 60-day truce extension that includes unrestricted vessel traffic through the Strait of Hormuz and US naval blockade relief on Iranian ports — the wording phase is complete but Trump has not signed off yet. Limited US-Iran skirmishes Wed-Thu (Iran fired a ballistic missile toward Kuwait late Wednesday, intercepted; the US responded with a strike on an Iranian air base) underline that the deal is fragile until signed. Brent at $93.15 (−1.7%). Vault Hormuz indicator moves to RESTRICTED on the wording-agreed status (throughput ~8.5 mb/d) with OPEN waiting on Trump's signature.
Al Jazeera · CNN · Reuters · Thu 28 May
The regional read as the framework wording lands.
DFM, the Qatar Stock Exchange and Tadawul opened Thursday with cash equity catching up to where regional credit had positioned through the Eid week — and Thursday’s framework-wording agreement reset the regional risk premium another leg lower. Qatar 5-year CDS extended to fresh post-conflict tights; UAE eurobond spreads tightened a further 3 bps; Saudi 5-year CDS is now inside the levels that held in mid-March before escalation. ADX resumes Sunday 31 May. Given the framework wording landed Thursday, the Sunday open should see Aramco and ADNOC re-rate in the first 90 minutes of trade; the regional banks (Emirates NBD, FAB, Al Rajhi, Qatar National Bank) are the cleanest dual-leg expression — rate-cut beneficiaries on the disinflation read, regional risk-premium compression as the second leg.
The Vault house view as the framework signature approaches: GCC overweight extended, with rotation deeper into financials and consumer/property; trim oil-linked equity on a Brent break below $92; treat the Hormuz indicator as the single forward-looking line on whether the deal holds. The asymmetric tail remains an Iran walk-back, a meaningful Israeli intervention, or a Trump reversal before signature. The signed-MOU outcome and the cycle-low supercore data together represent the cleanest soft-landing setup we have seen since the conflict began — and regional risk-premium compression still has room.
DFM · QSE · Tadawul
in session
Catch-up rally Thursday on framework wording
Qatar 5-yr CDS
post-conflict tights
Regional credit leading the soft-landing read
Hormuz indicator
~8.5 mb/d
RESTRICTED · wording done, signature pending
Three reads into the weekend.
The week closed with the supercore at a cycle low, fresh records on both major indices, and the Iran framework wording done — the cleanest soft-landing setup since the conflict began. Three threads define how the weekend trades.
Trade 01
The September cut is now the base case — duration is the play
Thursday's 50-basis-point downside surprise on core PCE moved the September-cut probability in Fed funds futures from 68% to 79%, with the supercore now within 5 bps of the Fed's implicit 3% line. The Powell-era policy framing requires the supercore to break decisively below 3%; one more soft May print (out 27 June) takes the September cut to north of 85% probability. The cleanest expression remains long duration on the back end: the 10-year at 4.42% has 25 bps of further compression on offer into the cut, the 30-year has more. Long-duration tech (the QQQ basket) extends a second leg as discount rates ease.
Trade 02
Iran framework signature over the weekend is the asymmetric catalyst
The 60-day truce wording was reached Thursday with unrestricted vessel traffic through Hormuz and US naval blockade relief — Trump's signature is the only remaining step. A signed MOU over the weekend opens Brent to $88–$90 and lifts the Hormuz indicator to OPEN; the regional risk-premium compression has another 30–50 bps left to run on Gulf credit. The tail remains a Trump reversal, an Iran walk-back on the verification mechanism, or a meaningful Israeli intervention. Watch the Sunday open at ADX as the cleanest single-line confirmation of whether the deal holds going into next week.
Trade 03
AI-infrastructure is now the definitively confirmed trade of the cycle
The three datapoints of the week — Micron's $1T crossing, Dell's $43B backlog with FY27 $50B AI revenue guide, and Snowflake's $6B AWS deal with raised full-year guidance — collectively confirm AI capex as the largest infrastructure cycle in 25 years. The Vault asymmetric expression remains long the second-derivative names — HPE, Supermicro, Vertiv on power-and-cooling; Amphenol, TE Connectivity on connectors; ASML, LRCX on lithography and deposition; Snowflake, MongoDB, Elastic on the data-infrastructure read. The risk is concentration; the hedge is the second-derivative basket. Watch HPE's earnings next week as the next single-name read.