Last week brought one of the most dramatic reversals we have witnessed in recent memory. Just hours before President Trump's 8 PM ET deadline on April 7th, markets received the news they desperately needed: a two-week ceasefire agreement between the US, Iran, and Israel. The timing was almost theatrical, reminiscent of the tariff pause strategy we saw from President Trump in April 2025. The S&P 500 soared more than 4% in response, reclaiming critical technical levels and suggesting that the worst of the volatility may now be behind us.

But several critical questions remain unanswered. Will this ceasefire hold, or are we simply witnessing another chapter in an ongoing conflict? How should we position ourselves as peace talks progress over the weekend? And perhaps most intriguingly, has the AI Revolution actually accelerated during this period of broader market turmoil, creating opportunities that most investors missed while fixated on geopolitical headlines?

We believe the evidence increasingly points to a sustained recovery. Our sentiment indicators have turned positive at precisely the levels that have historically preceded strong rallies. Macroeconomic data that correlates with earnings continues pushing to new highs, even as stock prices remain below their peaks from three months ago. This divergence has proven remarkably bullish in the past.

This week, we explore why the shipping industry may have finally reached its long-awaited tipping point, examine the semiconductor recovery that is quietly unfolding beneath the surface, and identify the stock picks positioned to benefit as capital rotates back into large-cap technology. The setup ahead of us looks increasingly compelling.

The S&P 500 closed the week 4.04% higher at 6,817 after the ceasefire announcement transformed market sentiment overnight. President Trump announced he had agreed to suspend planned attacks on Iranian infrastructure for two weeks, contingent upon Iran agreeing to a complete, immediate, and safe opening of the Strait of Hormuz. Iran confirmed the ceasefire shortly thereafter, though they insisted their 10-point plan must be implemented.

The situation became more complex when large Israeli strikes on Lebanon followed, which Iran claimed violated the ceasefire agreement. The US and Israel then clarified that Lebanon was not included in the ceasefire deal. By Friday, President Trump urged Israeli Prime Minister Netanyahu to pull back on strikes, and talks began between Israel and Lebanon as well. Over the weekend, the US and Iran are meeting to discuss a long-term peace agreement.

We think this development mirrors the strategy President Trump implemented in April 2025 during the trade war, almost down to the day. On April 9th, 2025, he imposed a 90-day tariff pause to negotiate trade deals just as the bond market began collapsing and equities faced heavy downside pressure. The pattern appears identical to the ceasefire announcement on April 7th last week.

From a technical perspective, last week's rally led to a clear trend reversal. On March 31st, the bottom end of the downward trending channel was reclaimed at 6,430, which led to an immediate move above the top end of the channel at 6,650 on April 8th. The daily RSI extended upside, breaking above 60 resistance on April 10th while remaining well below overbought levels. The daily top Bollinger Band began shifting higher for the first time since mid-March, now reaching 6,852.

Our sentiment index improved to 55.3% from 51.6%, leaving sentiment down 11.7% from 13 weeks ago. This represents a significant improvement from last week when the quarterly change in sentiment was lower by more than 17%. Based on past behavior, the current reading still suggests better-than-usual likelihood that stocks will continue higher in the near term.

Historically, turns in sentiment after being down 15% or more over a 13-week period typically see sentiment continue to improve until it reverses, rising by a similar amount relative to a quarter earlier. The exceptions are during bear markets, like 2022. We believe we will not know if we are in a bear market until we have a failed rally, but until we get such a failure, the odds favor sticking with the uptrend.

The current sentiment levels are also statistically favorable for trading ahead of earnings. When sentiment has been between 52.5% and 57.5%, buying stocks one week before earnings and holding until one week after has yielded an average gain of 0.99% with a 51.3% success rate. While you want to buy stocks ahead of earnings when market sentiment is low, we think you should buy individual stocks with bullish sentiment.

Our index of macroeconomic data that correlates with earnings ticked higher again last week, pushing to new highs even though stock prices remain below their highs from the same point last quarter. Over the past 20 years, when our macro index was higher than three months earlier but the S&P 500 was lower during the same period, the S&P 500 was higher one month later 67.2% of the time with an average gain of 1.4%.

New data released on Friday showed US CPI inflation surged to 3.3% on a headline basis and 2.6% on a core basis in March amid the Iran War, putting inflation at its highest level since May 2024. The spike was largely driven by a 10.9% surge in energy costs. However, core prices which exclude volatile food and energy rose less, just 0.2% for the month and 2.6% from a year ago, both 0.1 percentage point lower than what economists were anticipating.

Consumer sentiment collapsed to historic lows. The University of Michigan's Consumer Sentiment Index fell to 47.3 for the month, marking the lowest level on record. This deterioration in consumer confidence creates an interesting backdrop for monetary policy, as the Federal Reserve must balance inflation concerns against clear signs of economic stress.

The market continues to see no interest rate cuts in 2026 as the base case, with the Iran War significantly increasing inflation expectations. However, we believe the market is shifting too far in the hawkish direction as the labor market is weakening and consumer sentiment has collapsed. As more clarity is obtained around the Iran War situation, we expect inflation expectations will come down and yields will follow.

The S&P 500 spent approximately three months bouncing around the 6,775 line, plus or minus, before finally falling below it in March. Last week, the index gapped to 6,754 and closed above the 6,775 line. As long as that line holds, it makes for a strong reversal, and we think the path of least resistance is higher. We are trading primarily on the long side while the S&P 500 remains above 6,775.

We expect momentum will carry forward as peace deal talks progress and President Trump continues to tease long-term peace outcomes, similar to what we have seen in multiple of his previous deal negotiations. The technical picture has improved significantly, with the daily top Bollinger Band shifting higher and the daily RSI breaking above 60 resistance while remaining well below overbought territory.

We believe this represents a textbook technical setup following a period of consolidation and fear. The rapid shift from oversold conditions to constructive positioning, combined with improving fundamental data, creates a favorable environment for new record highs. Our initial target for the S&P 500 is 7,000.

In just two weeks, the Semiconductor sector has bounced back near its highs in a remarkable reversal. The sector has gone from 83% of its stocks lower since reporting earnings to 55% higher. The turnaround has been equally impressive in relative performance, with the sector moving from 66% of stocks lagging the overall market to 63% now leading the S&P 500.

Memory prices, which took a brief drop, proved short-lived as prices are back on the rise again. The semiconductor stocks are following suit. We believe the value creation in AI is transitioning from building data centers and infrastructure to increased focus on servers and hardware, which should continue to benefit semiconductor manufacturers.

Early data checks heading into earnings season have been positive for the semiconductor group. The increased demand for AI and memory is lifting total semiconductor revenue projections significantly. Current estimates see global semiconductor revenue reaching $1.3 trillion in 2026, up from $1.0 trillion in 2025. Looking further ahead, projections suggest $1.8 trillion to $2.2 trillion by 2030.

Importantly, the growth in semiconductor demand is increasingly driven by higher-value chips, leading to rising average selling prices and greater lithography intensity. This trend benefits equipment manufacturers even without a proportional increase in unit capacity, as the percentage spent on equipment could exceed historical norms due to the premium nature of AI-focused production.

Several high-profile earnings reports this week will provide important insights into corporate health and forward guidance. The overall environment remains constructive for companies to beat expectations, with 58.5% of reporters so far in April beating EPS estimates. This compares favorably to the normal rate of 67.7%, but represents improvement as the quarter progresses.

Guidance trends have been mixed, with nine companies providing positive guidance and nine providing negative guidance out of 24 total, resulting in a 50.0% positive rate. This balanced guidance picture suggests companies are being appropriately cautious given the geopolitical backdrop while still seeing decent fundamental trends in their underlying businesses.

We continue to focus on shorting stocks for the near term following earnings announcements while maintaining our broader long bias on the overall market. This strategy allows us to capture post-earnings volatility while remaining positioned for the continuation of the equity bull market we expect in the weeks ahead.

WTI crude for May 2026 delivery closed the week 14.29% lower at $96.17 as investors priced in a potential reopening of the Strait of Hormuz but continued to hedge against a possible resumption of conflict and the months-to-years-long process it will take to fully restore oil output in the Middle East. The magnitude of the decline reflects how elevated prices had become during the height of tensions.

President Trump warned Iran on Thursday to stop if it was charging tankers to transit the strait, a move that risks undermining the two-week ceasefire agreement that was contingent on reopening the waterway. Iran continues to insist they will charge tolls on vessels transiting the Strait of Hormuz, most recently averaging $2 million per voyage, which will likely be a point of contention during peace talks over the weekend.

We believe the fundamental backdrop has transitioned to a point where President Trump will be able to suppress prices, or at least cap them over the short term. The market will continue to discount threats and isolated war flare-ups with the broader picture in mind that both sides are actively working toward a peace agreement. This represents a meaningful shift from the fear-driven environment that pushed prices toward $118 just days ago.

From a technical perspective, oil prices surged as high as $117.63 on April 7th as investors anticipated President Trump's ultimatum for 8 PM ET. This came with a cross above the $112.30 daily top Bollinger Band and a push back above 70 in the daily RSI, putting the technical picture in severely overbought territory. Since the March 9th high, the daily RSI has been trading in a sharp downward divergent direction, indicating momentum is beginning to stall to the upside.

The oil market faces multiple headwinds beyond the immediate geopolitical situation. President Trump continues to advocate for lower energy prices and $2.00 per gallon gasoline, creating an implicit ceiling on crude oil prices. This political priority suggests the administration appears willing to encourage production increases and may resist any meaningful rally in energy markets.

On Friday, the daily RSI was rejected at approximately 55, and the daily bottom Bollinger Band remains well below current levels at $85.56. We think both the fundamental and technical picture now align for sustained downside in oil prices this week. The combination of easing geopolitical tensions, political pressure for lower prices, and deteriorating technical momentum creates a compelling bearish setup.

Natural gas prices ended the week 5.36% lower at $2.65, falling into what we consider severely oversold territory. Weather trends in the US were mild at best, failing to stimulate demand, and the Iran War had little-to-no impact on US natural gas prices. We believe the bearish thesis is now vastly priced in and the upside risks are growing, particularly for a potential short squeeze as natural gas broke below long-term support and the daily RSI declined toward 36.

Gold prices for June 2026 delivery closed the week 2.13% higher at $4,782 per ounce as the US Dollar Index weakened following the US-Iran ceasefire announcement and investors continued to rotate into gold amid rising inflation and ongoing central bank purchases. The Dollar fell sharply last week, rejecting 100.50 resistance on Monday then dropping below 99.00 on Friday.

This ended the uptrend in the Dollar Index which began on January 27th, and we expect more downside in the index ahead of us. The reversal was precisely what we were looking for when we established our most recent bullish gold position. As the Dollar weakens, it removes a key headwind that had been pressuring gold prices in recent weeks despite the strong fundamental backdrop.

New inflation data showing US CPI surging to 3.3% on a headline basis and 2.6% on a core basis in March provides additional support for gold. As price action progresses, we think it is clear that the near-term selling of gold during the Iran War was driven by central bank sales for currency stabilization and a temporary rush to the sidelines, but the long-term outlook has only improved.

Even if rate cuts are priced out, we believe gold prices can continue to rise because of persistent inflation, ongoing central bank demand, and geopolitical uncertainty. The fundamental case for gold ownership remains robust across multiple dimensions, and the recent technical correction has improved the sustainability of the uptrend.

Gold has been trading in a sharp uptrend since it bottomed at $4,100 on March 23rd. The daily RSI has been trading in an uptrend as well, rising above 50 resistance on April 10th. The daily bottom Bollinger Band has begun shifting higher, now reaching $4,297. This upward shift in support levels demonstrates the strength of the underlying trend.

Looking ahead, we think last week's price action opens a path for the bottom end of the long-term upward trending channel support to be reclaimed at $4,850. Once that level is achieved, minimal resistance exists up to $5,000 as the gap from March 18th to March 23rd gets filled. The daily RSI has declined nearly 40 points from overbought territory to approximately 51, creating substantial room for renewed upside.

The recent strength in the US Dollar, while creating near-term pressure on gold prices, appears unsustainable from a technical perspective. The Dollar Index has reached a daily RSI of approximately 67 and crossed above its daily top Bollinger Band at 99.67, indicating overbought conditions. Without sufficient fundamental support for a sustained Dollar rally, we expect this strength to prove temporary.

We expect a sustained move above the $4,000 pivot point this week to open the path toward $4,100 and ultimately new record highs. The combination of improved technical positioning, strong fundamental support, and the likely temporary nature of Dollar strength creates a compelling setup for renewed gains in precious metals.

ASML represents a compelling opportunity in the semiconductor equipment space as the company reports first quarter 2026 earnings on Wednesday, April 15th before market open. Consensus expectations call for EPS of $7.72 on revenue of $10.21 billion. We believe there is meaningful upside potential to both revenue and bookings based on recent industry dynamics.

Company Overview and Growth Drivers

Following the COVID pandemic, semiconductor demand surged as consumers spent heavily on electronics, but manufacturers struggled to keep pace. Companies began building capacity just as demand started to slow, leaving them with excess inventory and reduced need for manufacturing equipment from suppliers like ASML. Then ChatGPT launched, sparking swift semiconductor demand from companies like Nvidia, AMD, and Broadcom for AI chips.

TSMC, which manufactures most of these chips, has been spending aggressively to increase capacity, but lead times remain long. This sustained demand has contributed significantly to ASML's growth. Meanwhile, memory manufacturers such as Micron, Samsung, and SK hynix were initially reluctant to build capacity, which tightened supply and drove up memory prices. Now they recognize the demand is here to stay and are starting to increase capacity, creating additional equipment demand from ASML.

The increased demand for AI and memory is lifting total semiconductor revenue projections to $1.3 trillion in 2026, up from $1.0 trillion in 2025. Looking to 2030, projections range from $1.8 trillion to $2.2 trillion. Current estimates for ASML assume the percentage spent on equipment remains within historical norms. However, the growth in semiconductor demand is increasingly driven by higher-value chips, leading to rising average selling prices and greater lithography intensity.

This benefits ASML even without a proportional increase in unit capacity, leaving room for upside to both revenue and bookings. The company is uniquely positioned as the sole supplier of extreme ultraviolet lithography systems, which are essential for producing the most advanced chips powering the AI revolution.

Technical Setup and Historical Performance

Sentiment has remained modestly bullish since mid-September, and the stock has been trending higher during that period with little change in sentiment levels. Historically, at any random time, ASML stock would have averaged a gain of 6.4% over three months and would have been profitable 66% of the time. That did not change much when sentiment was at current levels, with the stock higher 70.5% of the time but gaining just 6.6% on average.

The signal becomes more meaningful around earnings. Buying the stock one week before earnings and holding until the open after earnings, when sentiment was at current levels, would have averaged a gain of 3.2% with a success rate of 73.5%. This bullish sentiment combined with the upward trend in earnings estimates puts the stock in an attractive position ahead of the report.

From a technical perspective, the stock just bounced off a trend line followed by a push above approximately $1,400. We expect a move to new highs, with the stock holding $1,400 as support. The combination of strong fundamental momentum from accelerating equipment demand, positive industry data checks, favorable historical earnings patterns, and constructive technical setup creates an attractive opportunity.

We believe ASML represents one of the best ways to gain exposure to the sustained buildout of AI infrastructure, as the company benefits from both initial data center construction and subsequent capacity additions. The secular tailwinds supporting semiconductor equipment demand appear to be strengthening rather than weakening as we progress through 2026.

TSMC presents a compelling opportunity as the company reports first quarter 2026 earnings on Thursday, April 16th before market open. The company pre-announced revenue of $35.69 billion on Friday, which exceeded the consensus estimate of $35.40 billion at the time. Estimates ticked higher shortly after the results, and consensus expectations now call for EPS of $3.29.

Revenue Pre-Announcement and Margin Expectations

While revenue is now known, there is always additional risk when a company pre-announces positive results, as the actual results become more predictable and the potential for disappointment increases. This is particularly true when sentiment is elevated, as is currently the case for TSMC. Sentiment stands around 38% bullish, which historically has been a headwind rather than a tailwind.

At this sentiment level, the stock has traded higher over the next 13 weeks only 58% of the time with an average gain of 3.9%. At random times, the success rate would have been 63% with an average gain of 4.7%. Still, this sentiment combined with positive earnings trends puts the stock in a favorable position, and when sentiment was bullish while the Earnings Whisper Score was at current levels, the stock gapped higher on earnings by an average of 1.3% and did so 70% of the time.

Given the revenue is known, the focus will be on margins and guidance. The company is still having trouble keeping up with demand while also shifting to advanced nodes where customers are willing to pay more. This puts the emphasis on Nvidia's GPUs, Broadcom's custom chips for Google and Amazon, and AMD's CPUs. We expect continued margin increases in the June quarter, which would represent an upside surprise to consensus estimates that currently imply a sequential margin decline.

Historical Performance Following Pre-Announcements

This represents a continuation of trends that started shortly after the launch of ChatGPT. Since then, whenever TSMC has pre-announced positive results, the stock has gapped higher by 3.2% when reporting final results, and it has done so 89% of the time. This exceptional track record suggests the market rewards the company for transparency and typically finds additional positive surprises in the details.

The company continues to benefit from insatiable demand for AI chips, with capacity constraints driving strong pricing power. Advanced node production, particularly for 3-nanometer and below, commands premium pricing while also delivering higher margins. This creates a favorable setup where both revenue growth and margin expansion can occur simultaneously.

We expect management to provide positive commentary on the June quarter margin outlook, driven by continued shift toward advanced nodes and sustained strong demand from AI applications. Any indication of margin guidance above consensus would likely trigger a significant positive reaction, as current estimates appear too conservative given the pricing environment and product mix trends.

TSMC remains the critical enabler of the AI Revolution, manufacturing the most advanced chips for all major players in the space. The company's technological lead and capacity expansion plans position it to capture a disproportionate share of the growth in semiconductor demand over the coming years.

We maintain a net long position in the overall stock market, reflecting our constructive outlook for equities in the current environment. The combination of easing geopolitical tensions, improving technical indicators, and solid macroeconomic data that correlates with earnings supports our view that further upside lies ahead for major indices.

Within our equity portfolio, we hold long positions in two semiconductor names that represent our conviction in the AI infrastructure buildout theme. Specifically, we maintain positions in ASML and TSMC. These holdings reflect our view on the sustainability of semiconductor equipment and manufacturing spending as the multi-year AI capital expenditure cycle continues to unfold.

ASML provides essential lithography equipment that enables the production of the most advanced chips, while TSMC manufactures those chips for companies across the AI ecosystem. Together, these positions offer diversified exposure to the infrastructure layer supporting artificial intelligence development and deployment.

The recent technical consolidation in semiconductor stocks, including some volatility in our holdings, appears healthy after the strong run from earlier lows. We view any near-term weakness as an opportunity to add to positions rather than a signal to reduce exposure, provided the fundamental thesis remains intact based on continued equipment and capacity spending.

For the S&P 500, we maintain our bullish stance with a target of 7,000. The recent consolidation around 6,775 followed by last week's breakout creates a favorable entry point, with key technical support levels holding and momentum indicators improving. We continue to view geopolitical headlines as temporary noise rather than fundamental threats to the equity bull market.

We have not made any changes to our semiconductor positions during the past week. The sector's sharp recovery, combined with positive data checks heading into earnings season and improving sentiment metrics, reinforces our conviction that the AI infrastructure theme remains one of the most compelling opportunities in the current market environment.

Overall, our positioning reflects confidence in the continuation of the equity bull market, supported by improving sentiment, constructive technical setups following recent consolidation, and what we believe are favorable fundamental trends. We remain focused on the semiconductor and AI infrastructure themes while maintaining tactical flexibility to adjust as conditions evolve.

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^{This report represents analysis and opinion rather than investment advice or recommendations. All views expressed reflect our current thinking and may change as new information becomes available. Past performance does not guarantee future results.}

^{Readers should conduct their own research and consult with qualified financial advisors before making investment decisions. Market conditions can change rapidly, and positions discussed may not be suitable for all investors depending on individual circumstances, risk tolerance, and investment objectives.}

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