Based on some dubious reportage that Iran and the U.S. were near finalizing a peace "deal" Wednesday, the Dow Industrials shot up past 50,000, the NASDAQ gained nearly 400 points, the S&P ended a three-day losing steak with a 79 point gain, and WTI crude futures fell to a low of $97.36 per barrel.
In other words, nothing new.
Insider Washington and Wall Street continue to play this kind of Kabuki theater to move markets hither and fro while nothing actually changes day-to-day. The repetitive pattern of hope for a more permanent peace beyond the current ceasefire and fear that one side or the other will restart hostilities have become so predictable that they are now ingrained into the toolkits of portfolio managers and shrewd speculators.
There's money to be made on both sides of a trade and somebody's surely making it, most likely the usual suspects inside the Beltway and the huge brokerages in lower Manhattan. That's not to say that the blatant media propaganda machine is somehow evil or guilty of bad behavior, rather, it's readily apparent that just about everybody is willing to play the game and go along for the ride.
What used to be a market based on honest facts, fundamental calculations, and practical reasoning has taken on the worst features of a roulette wheel or crap shoot. For those who have followed markets for longer than the past few months, it's become tawdry and tiresome. There is no specialized skill required to make profitable trades. It's become as easy as buying the latest tech buzz or hottest ETF and riding the wave to prosperity without so much as knowing of what a certain stock or fund does. Simply buying an index fund at any level is almost assured to return a healthy profit in a short period of time. Stocks cannot be allowed to decline very much under these conditions because denting the narrative is off limits. Everybody goes along to get along.
Outside of the knee-jerk reactions to the tariff imposition on "liberation day" and the start of the military conflict in the Mideast, there hasn't been any kind of correction on the major indices in more than three years, a condition that seems unlikely to change any time soon.
After the smashing close Wednesday, Nvidia released earnings for the latest quarter, and, despite the usual hype and positive returns, investors appear content to take profits and buy back in on any dips. After all, the stock just made a new all-time high last week and was up more than 20% year-to-date, so why hold on when there are other trades available. The stock doesn't pay any reasonable dividend. Surely nobody is going to fret over missing out on the laughable dividend yield of 0.02% (yes, you read that right).
Also posting quarterly returns were Intuit (INTU) and Urban Outfitters (URBN), the former (INTU) dropping more than 16% after announcing layoffs of 17% of its workforce, the latter (URBN) losing about two percent pre-market after beating the street.
Thursday morning brings earnings numbers from the following:
Walmart (WMT) - Shares are off 2% or more pre-market after the retail giant reported stronger sales but warned that high gas prices would cause consumers to pull back.
John Deere (DE) - Earnings beat easily, but company sees farm sales slipping, stock down 2-3%
Advance Auto Parts (AAP) - The company reports best sales growth in five years, re-affirms forwad guidance, shares up 6-7%
Ralph Lauren (RL) - Retailer exceeds 2026 sales goals, boosts divident 10%, shares flying, up 12% pre-market
The latest results suggest that there is a bifurcated social structure, with premium consumers having no urge to cut back on anything (Ralph Lauren), but a stressed middle and lower class consumer that is pulling in the reins (Walmart) and fixing or repairing what they already own (Advance Auto).
The trend that began more than a year ago - the top 10% of earners carrying the retail load - is magnified under the current regime. Most Americans can barely make ends meet and are carry high debt loads. The top 10% are spending as they please, with no worries, though the emergence of AI into the equation may begin to change the dynamic. Right now, and for the foreseeable future, it's middle management and grunts being laid off, but more and more people with high-end skills - coders, lawyers, accountants - are feeling AI heat. The message, "learn to code" is being replaced by "learn to weld" as physical skills are more immune to AI replacement. It's the planners, thinkers, and tinkerers at the fringes that are now being targeted for bot replacement surgery, aka, layoffs, buyouts, and early retirement.
With te market set to open within half an hour, Dow futures are down 155, NASDAQ Futures off 170, and S&P slipping 29 points, all of which fell sharply when the prospective Iran-U.S. deal was revealed to be dead in the water. Precious metals are down as well, with gold and silver each dropping less than one percent. As expected, WTI crude oil futures are back up above $100/barrel.
Treasury yields are lower, with the 10-year at 4.57% and 30-year bonds at 5.12%.
Are you not entertained?
At the Close, Wednesday, May 20, 2026:
Dow: 50,009.35, +645.47 (+1.31%)
NASDAQ: 26,270.36, +399.65 (+1.54%)
S&P 500: 7,432.97, +79.36 (+1.08%)
NYSE Composite: 23,021.74, +224.07 (+0.98%)
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