A fictional internal monologue from the desk of no one in particular, somewhere on a trading floor, Friday, May 2
Okay. Iran sent a peace proposal through Pakistan. Oil drops three dollars. The S&P rips. My Bloomberg terminal turns green like a Christmas tree someone plugged in too early and everyone in the pit acts like the war ended.
It didn't end.
Sit with that for a second. Tehran has not reopened the Strait of Hormuz. The U.S. blockade of Iranian ports is still in place. Central Command, per the Journal, has a contingency plan for another wave of strikes sitting in a folder somewhere, ready. Iran's Revolutionary Guards are threatening "long and painful" retaliation if those strikes happen. A fifth of the world's seaborne oil and LNG still can't get through. And the market's reaction to a proposal passed through an intermediary is to bid the Nasdaq up 0.89% and send crude down to $101.94.
This is what three months of war normalization looks like. The brain adapts. The discount rate adjusts. We've decided this is the background now, like traffic noise, and we've gone back to reading the earnings tape.
Fine. Let's read the earnings tape. But don't pretend the background isn't on fire.
Meta is where the week's real intellectual honesty went to die.
The company beat on revenue — $56.3 billion against $55.5 billion estimated, up 33% year-over-year, fastest growth since 2021. It beat on EPS. It raised full-year capex guidance to a range of $125 to $145 billion, up from the prior $115–135 billion range. And the stock fell eight percent. Not because the numbers were bad. Because user growth disappointed. And because Zuckerberg, bless him, told the world that the shortfall was partly explained by — and I want to be precise here — "internet disruptions in Iran."
Think about what that sentence contains. A social media company with nearly three billion users is citing active warfare as a quarterly headwind. The war isn't background. The war is in the footnotes. And the footnotes are moving estimates.
Meanwhile, Meta is laying off 8,000 employees with one hand and authorizing $145 billion in capital expenditure with the other. The workforce shrinks; the data centers expand. The human overhead is the variable cost. The chips are the fixed religion. Zuckerberg called it "a milestone quarter." He also said the company is "on track to deliver personal superintelligence to billions of people." Quarterly results and eschatology, back to back, in the same paragraph.
Microsoft fell 3.9% on the week. Also guiding toward $190 billion in capex, citing "high memory costs." Alphabet gained 10% on AI and cloud momentum — the one company this earnings cycle where spend appeared to be converting into measurable, defensible revenue. That distinction is the entire debate in three data points.
And beneath all of this: Q1 U.S. GDP grew at a 2% annualized rate. Better than Q4 2025's 0.5%, but below the 2.2% estimate. The economy is not collapsing. It is also not the economy that justifies S&P 500 forward multiples in the high twenties with oil at a hundred and two dollars and a naval blockade in its third month. It is, instead, the economy of a country spending at war speed while the Federal Reserve sits frozen and Jerome Powell prepares his valediction.
Powell said Wednesday he'll stay on the Board of Governors after his chairmanship ends May 15 — "for a period of time to be determined" — while the headquarters renovation investigation concludes. The Fed held rates at 3.50–3.75%. The statement noted that "developments in the Middle East are contributing to a high level of uncertainty." That sentence was doing a lot of work. It was basically the Fed's way of saying: we know the world is strange, we have no idea how long it stays strange, and we are going to hold our breath until the strangeness clarifies. Five years above the 2% inflation target and counting.
Caterpillar is up 160% in a year. One hundred and sixty percent. Construction equipment, because AI data centers don't build themselves and someone has to pour the concrete. That is perhaps the most honest expression of what this economy actually is: not a tech economy, not a consumer economy, but a physical infrastructure economy running to catch up with a digital ambition being funded by a defense-adjacent geopolitical crisis that nobody fully anticipated six months ago. CAT is the tell. The dirt movers are winning.
Over in London, Bill Ackman's Pershing Square IPO debuted Wednesday at the low end of expectations, raising $5 billion rather than the rumored higher target. Whatever the IPO process revealed about appetite for a publicly listed Ackman vehicle, the timing was grimly instructive — opening on the same day as the FOMC hold and four mega-cap earnings prints. There is no clean moment anymore. Everything arrives at once and the market has to triage in real time.
European gas storage sits at 30% capacity after a brutal winter. Dutch TTF contracts already nearly doubled to over €60/MWh in March. UK inflation is tracking toward 5%. The ECB is at 2% on its deposit rate and discussing, with increasing volume, whether it needs to go higher — into a probable recession — to hold inflation expectations. The phrase "permanent deindustrialization" is appearing in economic analyses of German and UK manufacturing sectors, not as a rhetorical flourish but as a forecast outcome if the Strait stays closed through summer.
That's the summer refill season. The one where Europe is supposed to replenish gas reserves for next winter. If the blockade holds, they won't make it. And then you have a second consecutive energy crisis winter in Europe, except this time coming in with depleted storage, higher base inflation, and a policy rate that either stayed too low or moved too late.
The market is not pricing this scenario. The market is pricing the peace proposal.
Bitcoin closed near $78,000. Gold at $4,644. The dollar keeps sliding. Somewhere in that triangle of numbers is the world's actual view of U.S. monetary and fiscal credibility — expressed not in statements but in quiet repositioning, day by day, away from dollar-denominated assets and toward things that either can't be printed or blow up in a war.
The peace proposal is real. The desire to end this is real on all sides, presumably. But Tehran wants the blockade lifted before the Strait reopens, and Washington wants the nuclear deal signed before the blockade lifts. That's not a negotiation close to resolution. That's two parties standing on opposite sides of a locked door, each holding the other's key.
Oil at $101.94 after a three-dollar drop on a rumor is not relief. It's the market's hope speaking before the facts have arrived.
Come back Monday.
May 2, 2026
