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Briefing.com Summary:
*Avoiding military hostilities for now, President Trump extended the ceasefire to give Iran's fractured leadership more time to come up with a unified proposal.
*The "TACO trade" is back in action.
*Boeing, GE Vernova, and Adobe headline some uplifting corporate news for the market.
There is a bid in the equity futures market that is every bit as hopeful as it is reflexive. To that end, Iran's leadership did not show up for ceasefire talks in Pakistan, yet President Trump said he will extend the ceasefire, recognizing that Iran's fractured leadership needs more time to come up with a unified proposal.
In the interim, the U.S. blockade of Iran will continue. That isn't sitting well with Iran, which reportedly seized a couple of ships in the Strait of Hormuz, testing the president's patience, who also said the various factions only have a short window of time to unify behind a counteroffer or the ceasefire will end, according to Axios.
What happens next is unknown, but what is happening now is another embrace of the so-called "TACO trade." Tough talk was not followed by tougher military action, so the algorithmic playbook defaults to a buying game plan.
Currently, the S&P 500 futures are up 41 points and are trading 0.6% above fair value, the Nasdaq 100 futures are up 194 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 290 points and are trading 0.6% above fair value.
One can call this a relief bid, but to be fair, there are other drivers supporting the upside bias, namely sliding Treasury yields, better-than-expected Q1 results from the likes of Boeing (BA), GE Vernova (GEV), and United Airlines (UAL), and upside leadership from the mega-cap stocks.
Alphabet (GOOG)/GOOGL) is a pacesetter there, up 1.6%, following a series of announcements at Google Cloud Next that featured the unveiling of its TPU 8t and TPU 8i chips to power next-gen agentic AI training and inference at scale.
There is a dash of AI enthusiasm making its way through the market this morning, then, along with visions of better values in the software space after Adobe (ADBE) announced a $25 billion share repurchase program.
All toppings for the TACO trade that remains appetizing for the market.
