AI earnings torch the bears 🔥

Welcome back to the Day Trading newsletter 📈

Markets are partying like Iran is already in the rearview.

The Dow ripped 612 points, the S&P 500 and Nasdaq punched out fresh records, and chip stocks led the whole thing (courtesy of two earnings reports that turned every short in the AI hardware trade upside-down).

Let’s get into it 👇️ 

📃 The U.S. and Iran are close to agreeing on a one-page memorandum of understanding to end the war, with a 12-to-15-year moratorium on Iranian uranium enrichment in exchange for sanctions relief and reopened transit through the Strait of Hormuz. Trump warned Iran would be bombed "at a much higher level" if it walked, but markets read the headline as the bigger signal. (CNBC)

🛢️ WTI crude futures plunged about 7% Wednesday to settle at $95.08 a barrel and Brent fell almost 8% to $101.27 as traders priced in a Hormuz reopening. The drop unwinds most of Monday's UAE-attack spike. Trump paused "Project Freedom," the U.S. naval-escort program through the strait, citing progress in talks. Energy was the worst-performing S&P sector. (CNBC)

🔻 Treasury yields tumbled as the inflation premium baked in by Monday's oil shock came right back out. The 30-year yield fell more than 4 basis points to 4.939% — back below 5% — and the 10-year dropped roughly 7 bps to 4.34%. Lower yields plus AI earnings turbocharged the equity bid; the Dow added 612 points to 49,910.59 and the S&P set a record close at 7,365.12. (CNBC)

🎢 Disney popped nearly 8% after Q2 revenue of $25.17 billion (+7% YoY) topped the $24.9 billion Street estimate, with streaming operating income soaring 88% to $582 million on the back of fall 2025 price hikes. Parks revenue hit a record $9.49 billion, and management raised the buyback target to $8 billion for the fiscal year from $7 billion. (CNBC)

📊 ARM Holdings posted a record fiscal Q4 — revenue of $1.49 billion (+20%), licensing up 29% — but slid roughly 7% in extended trading after guiding fiscal Q1 revenue to $1.26 billion and warning that mobile-segment growth will be flat-to-negative in fiscal 2027. The stock had run about 12% during the regular session ahead of the print. (CNBC)

🍟 DoorDash jumped about 12% after Q1 EPS of $0.42 beat the $0.37 consensus, even though revenue of $4.0 billion fell short of the $4.14 billion forecast. Gross order value rose 37% to $31.6 billion (a beat), and management flagged record DashPass membership sign-ups in the period. The stock keeps grinding into the consumer-tech leadership group. (CNBC)

🚘️ Uber gained more than 8% after Q1 gross bookings of $53.7 billion topped the $52.8 billion estimate and Q2 bookings guidance of $56.25–$57.75 billion came in above the Street. GAAP EPS missed badly at $0.13 (vs. $0.70 expected) due to a $1.5 billion equity-investment writedown, but adjusted EPS of $0.72 was a clean beat. (CNBC)

💵 ADP said private payrolls grew by 109,000 in April, ahead of the 84,000 Dow Jones consensus and a sharp acceleration from March's 61,000. Wage growth held at 4.4% YoY. Education and health services drove the gain (+61K), while professional and business services shed 8K. The print reinforces the "low-hire, low-fire" labor-market read that's keeping Fed rate-cut bets pushed into 2027. (CNBC)

AMD posted Q1 revenue of $10.3 billion (+38% year over year) on Tuesday after the close, with non-GAAP EPS of $1.37 (vs. $1.27–$1.29 consensus) and a Data Center segment that did $5.8 billion all by itself — up 57% from $3.67 billion a year ago.

Q2 revenue guide came in at $11.2 billion (±$300M) versus the $10.5 billion Wall Street expected.

Hours later, Super Micro reported fiscal Q3 results with non-GAAP EPS of $0.84 (vs. ~$0.61 consensus) and non-GAAP gross margin recovering to 10.1% from 6.4% the prior quarter.

SMCI also guided fiscal Q4 revenue to $11–$12.5 billion.

By Wednesday's close, AMD had ripped 18.61% to $421.39 (its best post-earnings day in seven years) Supermicro tacked on 24.5% to $34.65, and the rally pulled the rest of the sector with it:

• Nvidia +5.77%

• Intel +4.49%

• The SOX index up roughly 4%.

CEO Lisa Su told CNBC the size of AMD's Q2 revision reflects deeper customer commitments and growing visibility into multi-year deployments, anchored by AMD's previously announced Meta partnership.

This is the cleanest signal the market has gotten that AI capex isn't just an Nvidia trade.

AMD's Data Center business is now its primary earnings engine, SMCI's margin recovery means tariff and inventory-related write-downs are largely behind it, and the dollars are real.

Microsoft has guided $190 billion of 2026 capex and Meta lifted its high end to $145 billion.

The size of the spend, layered on top of the AMD/Meta gigawatt deal, says hyperscalers are committing capacity through 2027 regardless of which silicon vendor wins each socket.

What to watch: Nvidia reports May 27, and the bar just moved. The fact that NVDA only added 5.77% on a day when AMD ran 18% has analysts asking whether the Nvidia premium is starting to compress.

Also watch ARM, which ran about 12% Wednesday on AI-CPU optimism but then got punished after hours on a soft fiscal Q1 revenue guide (the first concrete sign that not every chip name will get a free ride from the capex flood).

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.