Hormuz Is the New Fed: How a Half-Closed Strait Is Running the Entire Market Right Now

Let's set the scene: WTI crude near $98/barrel, the University of Michigan Consumer Sentiment Index just hit an all-time low of 47.6, and 1-year inflation expectations jumped to 4.8% — the largest monthly CPI surge in nearly four years, with gasoline alone up 18.9% in March. The Strait of Hormuz, through which a meaningful chunk of global oil flows, is open to roughly nine ships per day. Nine. JD Vance is in Islamabad trying to fix this. Good luck to all involved.

Meanwhile, the AI trade is doing its own thing entirely. $CRWV surged 10%+ after Anthropic signed a multi-year NeoCloud deal, while the company separately announced a $21B Meta contract and the largest dual convertible note offering in history. $PLTR dropped ~14% as investors ask uncomfortable questions about AI's impact on software moats. $INTC had its best week since 2000 — up nearly 24% — on Musk and Google partnerships. El-Erian, Tom Lee, and Cramer are all talking at once, which is the financial equivalent of three weather apps showing different forecasts.

The Fed is boxed in: Powell signaled no hikes in response to the energy shock, but with core PCE expected to end the year near 3% and a leadership transition looming by May 15th, 'on hold' is doing a lot of heavy lifting. Bank earnings next week — $JPM, $BAC, $MS and friends — arrive just in time to tell us whether 'bigger is better' is a thesis or a prayer.

Nine ships. Through the entire Strait. Per day. Sleep tight.