Consumers aren’t going big, they’re just going home.

Home Depot reported Q1 earnings this morning, and even though the home improvement giant beat top and bottom line expectations, the mixed bag of results also showed that consumers are growing more cautious.

• Adjusted EPS came in at $3.43, slightly higher than the $3.41 analysts forecast.
• Comparable store sales rose only 0.6%, below expectations of 0.8%—illustrating that, although consumers are still spending, growth is muted.
• Full-year sales are forecast to rise between 2.5% and 4.5%, compared to the 4% analysts expected.

A range of factors contributed to the underwhelming quarter. The housing market is still in a rut, with elevated mortgage rates and home prices discouraging people from moving and taking on major renovations. On top of that, inflation is reaccelerating, causing consumers to pull back discretionary spending in general.

“The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure,” said Home Depot CEO Ted Decker in a statement.

In short: Even though the numbers looked just fine on the surface, investors were hoping for signs of strength from Home Depot, not just more of the same. While shares sank into the red this morning, they ended the day up 0.89%. This year so far, shares of the retailer have fallen 12.1%.

The united state of the consumer

Home Depot is often viewed as a bellwether for how American consumers are feeling—and the answer this quarter was, “Meh.”

The latest macro data paints an even less encouraging picture: US consumer sentiment fell to a record low earlier this month. The culprit, of course, is rising inflation, along with economic anxiety stemming from the Iran war. Speaking of, rising oil prices have pushed the cost of groceries 3% to 4% higher, according to UBS. TLDR: The vibes are off, and people can feel it.

This week we get a few more heavy-hitting earnings reports from other big box retailers that have a pulse on how people are feeling about the economy, including Target tomorrow and Walmart on Thursday. Some analysts predict that with all this economic angst, value retailers like Target, Walmart, and Ross Stores will enjoy a boost.

But for now, the only renovations Wall Street will be doing is on expectations.—LB

🟢 What’s up

• Swedish aerospace and defense firm Saab jumped 3.84% after Sweden announced a $4 billion defense investment, its biggest since the 1980s.
• Software company Agilysys rose 12.54% following a strong Q4 earnings report that assuaged fears of AI killing software.
• Amer Sports gained 2.02% after the sportswear company reported a stellar Q1 earnings report that beat expectations.
• Astera Labs jumped 13.3% thanks to bullish comments from the chipmaker’s CEO at a JPMorgan conference.
• Shake Shack surged 7.42% after a regulatory filing revealed that the CEO and other insiders bought $3.2 million worth of shares.

What’s down

• Seagate fell 1.01% after CEO Dave Mosley indicated the memory chip maker won’t be able to keep up with booming demand from AI firms. The news yanked competitors Sandisk and Western Digital down 2.7% and 0.63%, respectively.
• Cloud computing company Akamai declined 6.25% after announcing it was offering convertible senior notes worth $2.6 billion.
• Homebuilding stocks dropped as Treasury yields rose: Toll Brothers fell 2.23%, Lennar lost 0.87%, and D.R. Horton ended the day 2% lower.
• Warby Parker plummeted 10.96% today after the company announced it was making AI glasses with Google and Samsung.

What do you get when you combine a $4.75 trillion tech behemoth with the world’s largest alternative asset manager? A big problem for the competition.

Late yesterday, Google and Blackstone announced they’re joining forces to create a yet-to-be-named AI cloud infrastructure company. Google will bring its tensor processing units (TPUs), specialized chips designed for powering AI. Blackstone will bring $5 billion to get the new business off the ground.

Together, the two will provide datacenter capacity and “compute-as-a-service” for anyone looking to run their AI models. That steps directly on the toes of neoclouds—a fancy name for companies that rent out computing infrastructure—such as CoreWeave (down 3.82% today). It’s also a shot across Nvidia’s bow, as Alphabet looks to commercialize its custom TPUs as alternatives to the chipmaker’s GPUs. Alphabet has recently made deals to sell its TPUs to Anthropic and Meta Platforms.

Meanwhile, Blackstone has already established itself as the largest private owner of datacenters in the world. Yesterday’s announcement is the latest step in the asset manager’s plans to enter the AI market in force, which includes its recent joint venture with Anthropic.

Together, Alphabet and Blackstone promise to be a proverbial elephant in the room that competitors will have no choice but to address.—MR

It’s been just over 11 weeks since the Strait of Hormuz closed, and the global oil market has been holding up reasonably well. But JPMorgan analysts warn that this relative stability could soon be coming to an end.

In a recent note, analysts described the “illusion of plenty,” or the belief that the world’s stored oil surplus will continue to cushion the blow from the Middle East for the foreseeable future. They estimate there were 8.4 billion barrels of oil inventory stored around the world at the beginning of the year, which sounds like a lot—but the truth is, only about 10% is accessible to shore up the market during an emergency. 

The rest is tied up in various ways, including pipeline fill (pipelines have to be full in order to function, but this oil isn’t in storage), and tank bottoms (the residual sludge that accrues at the bottom of storage tanks, making them appear fuller than they are). There’s also a good chunk (about 4 billion barrels) tucked away in strategic reserves, but governments won’t touch those until the most dire circumstances dictate it.

Dire circumstances dead ahead

On paper, global oil inventories can act as a shock absorber for the disruption caused by the Strait’s closure. In practice, that safety net isn’t nearly as strong as it looks—and it’s quickly fraying.

Some economists estimate that inventories have been about 35% depleted as of late April, and unless something changes, JPMorgan says the global oil market will reach “operational stress” in early June. That’s when the oil industry starts to dip into the last of its reserves, spurring on serious price volatility.

What’s worse, unless the Strait of Hormuz is opened soon, the oil industry will fall below the “operation floor level” by September, or the minimum level of oil needed to keep things running. That’s when things get very bad: Pipelines lose pressure, refineries shutter, fuel rationing begins, and the entire system falls apart.

After that, we’re pretty sure Mad Max begins to look less like sci-fi and more like prophecy.

Watch the calendar

The good news: JPMorgan says the Strait of Hormuz will reopen by September. The bad news: It won’t be because of a peace deal or political pressure, but because it has to. That or the entire oil industry begins to implode.

And just because the Strait reopens doesn’t mean the problems are over. The analysts expect the new floor for crude prices to be about $80 per barrel, far above where it was before the war with Iran began. Then again, that’s still better than fighting wasteland raiders for a gallon of gas.—MR

• A new bill in Congress could make driving an EV cost an extra $130 per year.
• Treasury Secretary Scott Bessent is pleading with G7 leaders to aggressively sanction Iran.
• Standard Chartered is laying off 15% of its corporate functions roles.
• The SEC is preparing an exemption that would open the door for tokenized stock trading.
• Alphabet just unveiled some big changes, including a new AI model, personal AI agents, and the end of Google Search as we know it.
• Minnesota just became the first state to ban prediction markets.
• Anthropic is prohibiting investors from using SPACs to buy shares pre-IPO.
• Americans are revolting against AI.

Economic announcements: Minutes from the most recent FOMC meeting could be revealing, considering how divided the last Fed interest rate decision was.

Earnings reports: Tomorrow is the busiest earnings day of the week, with reports from the likes of Analog Devices, TJX, Lowe’s, Intuit, Target, Experian, and Hasbro. But the big name to watch is Nvidia, the final member of the Mag 7, which will make its announcement after the market closes.

Everything else: The NHL’s Western Conference Final begins as the Vegas Golden Knights take on the Colorado Avalanche. And since we’re already talking hockey, the Carolina Hurricanes will face the Montreal Canadiens on Thursday night.