Oil whipsaws as U.S. hits Iran 🛢️

Welcome back to the Day Trading newsletter 📈

Markets reopen from the long weekend with the same question they closed it with:

Is the Iran war ending or escalating?

Overnight U.S. strikes on southern Iran sent oil ripping back above $100 only hours after Brent's sharpest single-day drop in weeks, while S&P 500 and Nasdaq futures still pointed to record opens.

Let’s get into it 👇️ 

💰️ Micron Technology became the seventh U.S. company to top a $1 trillion market cap Tuesday, with shares popping as much as 18% after UBS roughly tripled its price target to $1,625 from $535 and called the memory maker an emerging "AI giant." Long-term HBM contracts with partially fixed pricing are the bull case driving the rerating.

🧑‍⚖️ Kevin Warsh was sworn in Friday as the 11th chair of the Federal Reserve, taking the oath in the White House East Room from Justice Clarence Thomas — the first Fed chair sworn in at the White House since Alan Greenspan in 1987. Warsh pledged to lead a "reform-oriented" Fed and inherits a hawkish committee from Jerome Powell, who stays on as a governor.

💉 Eli Lilly said Tuesday it will acquire three vaccine developers — Curevo, Vaccine Company, and LimmaTech Biologics — in deals worth a combined roughly $3.83 billion, pushing the GLP-1 giant beyond obesity into infectious disease prevention. Lilly's chief scientific officer framed the spree as a strategy "to prevent disease at its source rather than treat its consequences."

📊 The S&P 500 closed at a record 7,473.47 on Friday, capping an eighth consecutive winning week (its longest streak since 2023) and the Dow finished at a fresh record of 50,579.70 after adding 294 points. Easing yields and Iran-deal hopes powered both indexes into the long weekend.

🔻 Conference Board consumer confidence dipped 0.7 points to 93.1 in May, with the Present Situation Index dropping 3.2 points to 121.2 as the inflationary impact of the Iran war filtered through to households. (Two-thirds of consumers said they are cutting back on spending overall, with gas prices the most-cited culprit).

🔋 Ferrari debuted its first fully electric vehicle, the five-seat Luce priced at roughly €550,000, at a Rome launch, and "the market has spoken," with Ferrari's Milan-listed shares falling nearly 8% and the U.S. listing down close to 5% on the reveal. The minimalist design landed as Porsche and Lamborghini are pulling back their own EV bets on weak demand.

U.S. Central Command confirmed early-Tuesday "self-defense" strikes on Iranian boats laying mines and missile launch sites in southern Iran's Hormozgan province, near the Strait of Hormuz.

Brent crude jumped back above $100 a barrel in early trading (up more than 4%) after Iran's Revolutionary Guard called the strikes a "gross violation" of the seven-week ceasefire and vowed retaliation.

WTI clawed back toward $92 a barrel after Monday's plunge of more than 5%, which had been driven by hopes of a U.S.–Iran framework deal that would reopen Hormuz.

Secretary of State Marco Rubio told reporters negotiators in Qatar were down to working out "specific language" in the initial document — framing a deal as days, not weeks, away.

The market is pricing two competing scenarios.

Bear case: a closure of the waterway that carries roughly a fifth of global oil, sending Brent through $110 and re-igniting the inflation panic that pushed the 30-year Treasury yield to its highest level since 2007 last week.

Bull case: a 60-day framework that lifts the U.S. blockade, reopens Hormuz, and sends Brent back into the $80s.

Oil has been the dominant macro variable for weeks. It sets consumer inflation, Treasury borrowing costs, and the odds that brand-new Fed Chair Kevin Warsh can deliver the rate cuts the White House is demanding.

What to watch:

1. Whether Iran follows through on its retaliation threat or signals it stays at the table in Qatar.

2. Brent's lines in the sand - sustained closes above $105 reignite the inflation trade; sustained closes below $95 let the rate-cut narrative breathe.

3. Friday's April core PCE print, the Fed's preferred inflation gauge, which will be the first clean read on how much of the war-era oil shock is showing up in actual prices.

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