Trump Bombing Question | Warsh Attacks Fed | United Slashes Outlook

Futures are pushing higher after the ceasefire extension. The S&P and Nasdaq back on a path that assumes time is enough to stabilize the situation. 

The move isn’t coming from resolution, it’s coming from delay. The blockade remains, traffic is still restricted, and oil flows haven’t normalized. 

That keeps energy risk in the system even as equities trade as if the timeline itself solves it. Rates are the pressure sitting just under the equity surface.

After Warsh pulled focus back to the Fed yesterday, this rally is building on the assumption that policy doesn’t tighten into higher energy costs. 

That assumption hasn’t been tested yet.

INVESTOR SIGNAL

This is a time extension, not a reset. Equities are trading the pause, not the outcome. 

If oil holds elevated while yields drift higher, the current positioning breaks quickly. Watch rates first, then oil, then equities.

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The diplomatic framework nearly collapsed Tuesday. Iran's negotiating team reversed course at the last minute. Vance's plane sat idle at Andrews all day. White House meetings turned frenzied. Aides told Trump that Iran's hardliners won't negotiate while their ports are blockaded.

Trump asked whether to resume bombing. He was talked back from it. The ceasefire was extended. The blockade continues. U.S. forces boarded a sanctioned Iranian tanker in the Indian Ocean as added pressure.

Here's where things stand this morning:

Druzhba moves one million barrels per day. Hormuz moves thirteen million. That gap is the whole story.

The Escalation 

Trump asking about bombing is different from a social media post. Watch whether Vance's trip gets reinstated or canceled. That answer sets the next two weeks of market pricing.

Kevin Warsh's hearing produced sharper material than expected. He called the Fed an institution that "lost its way." He said it "wandered outside its remit." He called FedNow "Fed Yesterday." He said Fed independence "is earned by delivering on promises" and the Fed "hasn't delivered."

That's a direct signal. A Warsh-led Fed will break from Powell-era norms, not defend them.

Then came the hearing's sharpest moment. Senator Kennedy, a Republican, warned that Warsh's AI productivity arguments may be "a bunch of hype by people who want to sell stock." That warning from inside his own party matters.

The confirmation path still runs through Tillis. Tillis still requires the DOJ investigation to end. Trump still refuses to end it. Powell's term expires May 15.

The Regime Change Signal 

Warsh challenged the Fed's entire operating model yesterday. Markets now have to price what a genuinely disruptive Fed chair looks like. Watch for any White House move on the DOJ investigation. That single decision unlocks everything else.

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United Airlines (UAL) beat Q1 estimates. Revenue rose more than 10%. Net income jumped 80% year over year. Then the full-year guidance landed. United cut its forecast from $12-14 per share down to $7-11. That's roughly $5 off the midpoint in a single revision.

Previous guidance was set in January, before the war began. United now estimates fuel at $4.30 per gallon in Q2. That's more than double the pre-war price.

United is the best-positioned airline in the industry. If United is cutting this much, every weaker carrier is in a harder position. Alaska Airlines already pulled its 2026 forecast entirely.

Here's what the guidance cut tells you:

The Margin Test 

United passed Q1 and failed the full-year test. Watch Delta and Southwest when they report. The industry's real picture is far worse than headline earnings suggested.

SpaceX secured an option to buy Cursor, the leading AI coding tool, for $60 billion. That's more than double Cursor's November valuation. If SpaceX doesn't exercise it, it pays Cursor $10 billion for partnership work regardless.

The timing is deliberate. The announcement came the night before SpaceX opened three days of closed analyst briefings for its $75 billion IPO. The message to Wall Street is clear. Value this like an AI infrastructure business. Not a rocket company.

SpaceX lost nearly $5 billion in 2025. It has $50 billion in liabilities. Wall Street is being asked to value it at $1.75 trillion.

Here's what the Cursor option actually does:

The Narrative Shift 

Aerospace companies don't get $1.75 trillion valuations. AI infrastructure companies might. Watch Thursday's Memphis session notes carefully.

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Tesla (TSLA) reports Q1 earnings after the close. Wall Street expects modest results. Deliveries were already disclosed as weak. Three questions define the call instead.

How slow is the robotaxi rollout? Tesla expanded to Dallas and Houston. Only four vehicles tracked across both cities. Musk promised half the U.S. covered by end of 2025.

When does Optimus production begin? Musk promised an investor reveal in March. That was delayed. Robots for sale by end of 2027 is the current timeline.

What is the real Terafab capex number? Tesla guided $20 billion. Barclays estimates the full project could cost $5 to $13 trillion. That is not a capex number. That is a national infrastructure commitment. The gap between $20 billion in guidance and $5 trillion in eventual cost is the question the call needs to address.

Here's what makes tonight significant:

The Gap 

Tesla's valuation is built on vision. Tonight is where investors find out how far execution has fallen behind. How Musk explains the robotaxi gap defines whether the premium holds.

Wednesday opens with five pressure points in simultaneous renegotiation. 

The ceasefire nearly broke when Trump asked about resuming bombing. Warsh attacked the Fed's operating model at his own confirmation hearing. United cut its full-year forecast nearly in half. SpaceX transformed its IPO narrative overnight with a $60 billion Cursor option. And Tesla reports tonight with four robotaxis on the road against a promise of nationwide coverage. 

The institutions built to provide stability are all being renegotiated at once.