Strait Still Nervous

U.S.-Iran talks make progress as concerns over the Strait of Hormuz remain in focus.

Author

Ankit Sinha
May 22, 2026

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Geopolitics Is the New Earnings Season

Stocks rallied while oil prices eased as investors grew more optimistic that diplomatic negotiations between the U.S. and Iran could eventually reopen the Strait of Hormuz and restore disrupted energy flows.

The S&P 500 extended gains for the week while the Dow Jones Industrial Average closed at record highs, as traders bet that a breakthrough in talks could prevent a prolonged energy shock.

U.S. crude settled near $96 after Iran said Washington’s latest proposal had “partly bridged the gap” between both sides, though uncertainty around Iran’s uranium stockpile continued to complicate peace negotiations.

Markets remain extremely sensitive to developments around the Strait of Hormuz after the conflict sharply reduced traffic through the strait and sent energy prices soaring. 

Investors are effectively trading every uranium headline, shipping update, and diplomatic comment in real time. While U.S. Secretary of State Marco Rubio pointed to “some good signs” in negotiations, Iranian officials maintained a hardline stance, and discussions over uranium enrichment and potential Hormuz toll systems kept tensions elevated. In other words, markets are now discovering that geopolitics may be just as important as earnings season.

The conflict is also feeding into broader inflation and rate concerns. Rising energy prices have increased fears that central banks may need to keep interest rates higher for longer, even as growth slows. Jamie Dimon warned that rates could climb “much further,” while companies including Walmart said higher fuel costs are pressuring margins and potentially leading to higher consumer prices.

Meanwhile, corporate news remained active:

  • International Business Machines secured a $1 billion U.S. government award for quantum chip production.

  • Take-Two Interactive confirmed the release date for Grand Theft Auto VI.

  • Zoom Communications projected stronger-than-expected growth.

Peel Take: Markets are still climbing, but the real driver right now isn’t earnings but geopolitics. Oil prices, inflation fears, and interest-rate expectations are all moving based on whatever update comes out of the Hormuz situation next. Investors are basically trading diplomacy in real time.

What's Ripe

Applied Digital Corp. (APLD) 21.5%

  • APDL jumped 21.5% after securing a 15-year lease agreement with a major U.S. hyperscaler for its fourth AI factory campus.

  • The deal underscores how the AI infrastructure race continues to fuel massive demand for long-term computing capacity, with tech giants effectively locking in server space the same way previous generations locked in oil fields.

  • Peel Take: The AI boom is no longer just about chatbots and chips but is increasingly becoming an infrastructure story. Investors are pouring capital into data centers, power capacity, and AI “factories” as hyperscalers race to secure the computing backbone needed to train and run next-generation models. In today’s market, owning AI infrastructure may be just as valuable as building the AI itself.

International Business Machines Corp. (IBM) 12.5%

  • IBM rose 12.5% after unveiling Anderon, a standalone quantum computing company that IBM described as “America’s first pure-play quantum foundry.” IBM and the U.S. Commerce Department will each invest $1 billion into the venture, with IBM also contributing intellectual property, infrastructure, and talent.

  • The move signals growing government and corporate efforts to secure U.S. leadership in next-generation computing technologies before quantum computing becomes the tech industry’s next arms race.

  • Peel Take: The AI boom may dominate headlines today, but quantum computing is increasingly shaping up as the next strategic technology battleground. By spinning out a dedicated quantum foundry backed by both government funding and private-sector expertise, IBM is positioning itself at the center of a market that could eventually transform cybersecurity, pharmaceuticals, finance, and advanced computing.

What's Rotten

Intuit Inc. (INTU) 20.0%

  • INTU plunged 20% after announcing plans to cut 17% of its full-time workforce, overshadowing stronger-than-expected fiscal third-quarter earnings.

  • CEO Sasan Goodarzi said artificial intelligence “had no bearing” on the layoffs, though investors appeared more focused on the scale of the restructuring than the earnings beat itself.

  • Peel Take: The market reaction highlights how sensitive investors have become to workforce reductions in the AI era. Even when companies deny that automation is driving layoffs, large-scale restructuring increasingly raises concerns about slowing growth, margin pressure, or shifting competitive dynamics.

Walmart Inc (WMT) 7.3%

  • WMT fell 7.3% after issuing weaker-than-expected guidance, overshadowing stronger fiscal first-quarter revenue results. Investors focused less on the earnings beat and more on concerns that rising costs and cautious consumer spending could pressure margins in the months ahead.

  • Peel Take: Walmart’s results suggest consumers are still spending, just more carefully. While higher sales indicate resilience in everyday demand, weaker guidance signals that inflation, fuel costs, and economic uncertainty continue to weigh on retail profitability. In today’s market, beating earnings is good, but convincing investors that the future won’t get worse matters even more.

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