Markets Hit All-Time Highs While the Strait of Hormuz Burns — This Is Fine

Let's set the scene: S&P 500 +58 points, Nasdaq +258 points, Dow +356 points — all-time highs across the board. Meanwhile, Brent crude is above $110/barrel, Iran has attacked commercial vessels nine times since the April 8th ceasefire technically began, and Citadel's Ken Griffin is at Milken warning that a prolonged Hormuz closure could push the entire world into recession. The market heard all of this and said: sounds bullish.

The disconnect is real but not irrational. BlackRock's Rick Rieder points to 5-6% nominal GDP growth powered by AI capex and high-income consumers, while Citi's Heath Terry notes $710 billion in AI infrastructure is being built in 2025 alone — projected to hit $1.3 trillion by 2028. $NOW is projecting $30B+ in subscription revenue by 2030. $NVDA's Jensen Huang is out here describing entire factories run by robots as "an emerging reality." The Philadelphia Semiconductor Index surged nearly 5% on the day. The AI trade isn't just running — it's sprinting in flip-flops.

The S&P trades at ~25x forward PE — elevated but below last year's 28x peak, which at least gives the bulls a technical argument. Small caps (Russell 2000 at 16.6x) still have room before hitting historical highs. Sentiment is described as "cranky" and "reluctantly participating" — which, historically, is exactly the kind of Wall of Worry that keeps bull markets alive longer than anyone expects. The ceasefire holds until it doesn't, and apparently that's enough for now.