Good morning investors,
The S&P 500 closed above 7,000 for the first time in history.
Let that sink in. Two weeks ago, we were staring at a strait blockade, collapsed peace talks, and oil above $100. Fear was everywhere. The bears were loud and had real ammunition.
Yesterday, the S&P 500 gained 0.8% to close at 7,023, a fresh all-time high. The Nasdaq surged 1.6% to post its 11th consecutive day of gains and its own record close. Even the Dow's 0.2% decline could not dampen the milestone.
The Nasdaq just completed the fastest swing from oversold to overbought since the early 1980s, moving from an RSI below 30 on March 30 to above 70 in just 11 trading days. That kind of momentum reversal does not happen in weak markets. It happens in markets that were oversold, under-owned, and ready to move the moment sentiment shifted.
Opening Bell
Futures are marginally higher this morning as the market digests the record-setting session. S&P 500 ($SPY ( ▼ 0.3% )) futures have ticked up 0.1%. Nasdaq 100 ($QQQ ( ▲ 0.05% )) futures have added 0.3%. Dow ($DIA ( ▼ 0.65% )) futures have climbed 39 points or 0.1%.
TSMC ($TSM ( ▼ 0.53% )) reported a 58% increase in first-quarter profit this morning, beating estimates and hitting a fresh record as AI chip demand stayed strong. Revenue rose to 1.134 trillion Taiwan dollars, ahead of expectations. The company forecast full-year 2026 revenue growth of more than 30% and projected second-quarter revenue of $39 billion to $40.2 billion.
"AI-related demand continues to be extremely robust," TSMC's CEO said on the earnings call. He noted the company has received strong signals and a positive outlook from customers, reinforcing conviction in a multi-year AI growth trend.
Netflix ($NFLX ( ▼ 0.82% )) reports after the bell tonight, kicking off Big Tech earnings season. PepsiCo already reported this morning, beating on both earnings and revenue as its struggling North American food business returned to volume growth for the first time in more than two years. Adjusted earnings came in at $1.61 versus the $1.55 expected. Revenue rose 8.5% to $19.44 billion.
This Was the Unpopular Call
A few weeks ago, calling for a bottom was lonely.
Tech was in freefall. The Iran war had the market in a chokehold. Sentiment had collapsed. The bears were loud and had real ammunition to make their case. Every scroll of your feed was another reason to sell, hide, or at minimum, stay away from anything with a high multiple.
I kept writing.
I said we had found a bottom. I said the acute phase of the selloff was over and that the path forward was higher, not lower. I said valuations in technology had compressed enough to make them interesting again, and when this market found its footing, tech would have to lead the next leg higher. Not defensive names. Not commodities. Tech.
Today, the Nasdaq is at a fresh all-time high. The S&P 500 is at a record. The S&P is up 3% on the week. The Nasdaq is up nearly 5%.
To everyone who stayed the course over the last few weeks, who stuck with the analysis when it was uncomfortable, who did not let the noise override the process - this one is for you. You did not panic. You did not capitulate at the lows. And now you are watching the recovery unfold exactly as we discussed.
Markets do not reward the loudest voice in the room. They reward the most patient one.
The Cost of Silence
The market just made a new all-time high, and that is the most painful sentence I could possibly write for the investors who did nothing for the last three weeks.
On February 28, the Iran conflict began. Brent crude spiked. The Nasdaq broke down 10%. The VIX spiked past 30. Inflation printed at 3.3% in March and felt like 2022 all over again. Many advisors went quiet. Phones stopped buzzing. The standard advice was to wait for the dust to settle.
The market did not wait.
While portfolios sat frozen, three opportunities came and went.
The first was tax-loss harvesting. With the S&P drawing down 7 to 9%, there were losses on paper that had real, bankable value. Losses that could offset future capital gains for years to come. Not selling low. Rotating ETFs. Banking a tax asset. That window is now closed.
The second was the Roth conversion. When your account value is down 10%, converting to a Roth means you pay taxes on a discounted valuation before the recovery prices those assets back up. It is one of the cleanest wealth-building moves available in a volatile market. That window is now closed.
The third was rebalancing. Energy was up while tech bled. Equity models quietly drifted out of alignment, which meant holding too much of what ran and not enough of what was about to bounce. Disciplined rebalancing in that window captures the gain and positions you for the recovery. That window is now closed.
The market is back at all-time highs. The chaos feels over. The headlines feel less urgent. And somewhere, an advisor is picking up the phone right now to tell clients that things are looking better.
But the difference between a good year and a great decade is made in the three-week windows that most people sleep through.
The most expensive sound in a volatile market is silence.
If you are wondering whether your advisor had a plan during the drawdown or whether you just watched it happen, I would encourage you to ask that question directly. And if you want to have an honest conversation about what proactive wealth management actually looks like, feel free to reach out.
TSMC: AI Demand Remains Insatiable
TSMC's results this morning confirm everything I have been writing about the AI infrastructure cycle.
The company's high-performance computing division, which includes AI and 5G applications, accounted for 61% of revenue in the first quarter. Advanced chips at 7-nanometer or smaller made up 74% of total wafer revenue, with sub-3-nanometer shipments accounting for 25%.
"Demand still significantly outpaces supply and is not showing any major sign of slowing down," one analyst noted. "We expect this sold-out environment to remain a defining characteristic of the semiconductor industry throughout 2026."
TSMC now expects capital expenditures to be at the high end of its $52 billion to $56 billion range for the year, reflecting confidence that demand will remain strong. This is the company that manufactures chips for everyone from Apple to Nvidia. When they say AI demand is "extremely robust," believe them.
The company addressed concerns about supply chain disruptions from the Middle East conflict, saying it does not expect any near-term impact on operations. TSMC sources specialty chemicals and gases from multiple suppliers and maintains safety inventory.
The AI Pivot Absurdity
Speaking of AI, the market got a fresh dose of absurdity this week.
Allbirds, the struggling footwear maker that once dominated Silicon Valley startup culture, sold its brand for $39 million, renamed itself NewBird AI, and pivoted to a GPU-as-a-Service firm. The stock surged as high as 700%.
This is Long Blockchain all over again. Remember when Long Island Iced Tea changed its name to Long Blockchain in 2017 and instantly spiked 197%? That did not end well. The company was delisted and investigated.
The closest analogs for Allbirds do not inspire confidence. BuzzFeed jumped 120% after announcing an OpenAI deal in January 2023 before erasing all gains within 8 months. Rent the Runway surged 270% on AI-search language in April 2024 before giving it all back within 6 months.
Allbirds has reported 17 straight losing quarters. Its $39 million brand sale values the company at barely 1% of its $2.4 billion IPO valuation from November 2021. Compare its $50 million convertible to CoreWeave, which raised $28 billion in 12 months.
Being obvious is not always bad, and chasing investor excitement is a sensible move if you are desperate. But completely overhauling a business and diving headfirst into a pit whose depth is not really known is also what the tech giants are doing. The difference is they have the capital, the talent, and the infrastructure to execute. Allbirds has a shoe brand it just sold for the price of a modest Manhattan apartment building.
Snap Cuts 16% of Workforce
Snap is cutting approximately 1,000 positions, about 16% of its workforce, citing AI efficiency gains. The stock jumped 8% on the news.
The CEO wrote in an SEC filing that "rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers."
Whether through layoffs or simply not hiring, AI-driven workforce reductions are accelerating across the industry. Oracle, Meta, Amazon, Block, and Salesforce have all made similar moves. At some point, we will see it in the aggregate employment data.
A top Fed official offered some reassurance this week about AI's impact on jobs. "The nature of jobs are going to change," Chicago Fed President Austan Goolsbee said. "There have been many changes to the nature of many jobs over a lot of decades. We have a pretty good sense that there can be short-run disruptions. And then in the long run, most of these big technologies are job creators on net, not job destroyers."
That may be true over a multi-decade horizon. In the near term, however, the companies benefiting from AI efficiency gains will see margin expansion while competitors who fail to adapt will struggle.
Netflix Reports Tonight
Netflix reports after the bell, marking the first major Big Tech earnings report of the season.
The company recently raised subscription prices for the second time in just over a year, increasing its ad-supported Standard plan by $1 to $8.99 per month and the Standard and Premium tiers by $2 each. The ability to raise prices in this environment is a sign of underlying strength.
Netflix also received a $2.8 billion breakup fee after walking away from negotiations to acquire Warner Bros. Discovery. That capital can now be deployed toward content and advertising infrastructure improvements.
Analysts expect Netflix to surpass 331 million paid subscribers worldwide in the first quarter. Revenue expectations are $12.17 billion versus $10.54 billion in the same quarter last year.
The Peace Deal Takes Shape
The peace deal between the US and Iran is beginning to take form. Oil has come in. Yields have fallen. Rate cut expectations are quietly creeping back into the conversation. The macro backdrop that crushed sentiment five weeks ago is unwinding, and the market is responding exactly as expected.
We are not out of the woods on every front. Geopolitics remain fluid and the next few weeks will still produce headline risk. But the direction of travel has changed. The worst of it is behind us.
Final Thought
Stay invested. Stay process-driven.
The market does not care about your feelings. It does not care whether you were scared in March or confident in April. It only cares about whether you were positioned correctly when the turn came.
The turn came. The market made new highs. And the investors who maintained discipline through the volatility are now being rewarded.
I said we had found a bottom. I said tech would lead. I said the valuations were attractive. All of that has played out over the past three weeks.
There will be more volatility ahead. There always is. But the playbook remains the same. Own quality. Maintain discipline. Let the process work.
As always, feel free to reach out with questions about navigating this environment or about what proactive wealth management actually looks like during volatile markets.
Best regards,
Dan Sheehan [email protected]
Subscribe: https://substack.com/@dansheehan3
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.