Semis on Fire, Hormuz on Edge – Now the Mag 7 Take the Stage

Stocks notched another positive week despite stalled U.S.-Iran negotiations and reports of incidents in the Strait of Hormuz, a critical chokepoint for global oil shipments. Crude prices surged mid-week amid the Hormuz standoff and fears of supply disruptions and remained elevated into the weekend despite giving back some gains on Friday. This created volatility and weighed on investor sentiment – with six out of 11 S&P 500 sectors down for the week – even as tech stocks demonstrated resilience.

As a result, the Dow Jones Industrial Average (DJIA) underperformed, dropping 0.44% for the week and snapping its three-week winning streak. This was largely driven by the heavy representation of energy-sensitive stocks in the Dow, including transportation and industrials. Meanwhile, the strength in technology shares propelled the S&P 500 (SPX) and the Nasdaq-100 (NDX) to their fourth consecutive weekly gain as both set fresh records. The S&P 500 advanced 0.55% for the week, while the Nasdaq-100 jumped 2.37%, driven by a massive rally in semiconductor stocks.           

Support for market sentiment – particularly for semis – also came from Intel (INTC), which reported much better-than-expected quarterly results and issued a rosy outlook on AI-driven demand, with its stock finally surpassing its record set in 2000. The legacy chipmaker’s 24% rally lifted other chipmakers, helping the iShares Semiconductor ETF (SOXX) extend its winning streak to 18 days – the longest on record – and reach an all-time high after rising over 11% for the week. Every single stock in SOXX has outperformed the S&P 500 in April.

A broad sigh of relief was also felt across markets after the Justice Department said it was closing its probe into Fed Chair Jerome Powell, opening the door to a smooth leadership transition at the central bank as Powell’s term comes to an end in May. This decision potentially clears the path for Trump’s nominee, Kevin Warsh, to be confirmed as the next Fed Chair. Treasury yields fell as traders increased bets on future interest-rate cuts, adding support to equities.

The latest macro data, however, offered no fresh reasons to expect a rate cut in the near term: March retail sales beat expectations, preliminary April PMI data showed expansion in both manufacturing and services, and the University of Michigan consumer sentiment index came in above forecasts – even as it remained at a record low due to elevated short-term inflation expectations. Earlier, the Fed’s Beige Book survey showed economic activity increasing at a slight to modest pace, reinforcing the picture of resilience amid moderation.

That moderation, however, is not reflected in earnings reports. With 28% of S&P 500 companies having released their Q1 2026 results, both the share of companies delivering positive earnings surprises and the magnitude of those surprises are well above 5-year and 10-year averages. Analysts are beginning to raise their expectations for the quarter – which were already high following a strong 2025.

We are now entering the busiest period of the season, with roughly a third of the S&P 500 set to report this week. Investors are focused on updated guidance that reflects the impact of the U.S.-Iran conflict, higher energy prices, and potential supply chain disruptions. Still, most of the attention will be on the Magnificent Seven: Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Apple (AAPL). These reports – with the exception of Apple – will help shed some light on the most pressing question of all: is the AI party still on?