Iran's Strait of Hormuz crisis swung from near-collapse on Monday to cautious deal optimism by Thursday, pulling oil, equities, central bank decisions and Australia's trade account through the same violent arc.
The AI earnings machine ran hot in parallel, with AMD surging 16.5% after hours on Wednesday, Palantir posting its best-ever growth rate, and Anthropic quietly passing OpenAI on revenue ahead of a US$900 billion (A$1.24 trillion) board valuation decision.
Spirit Airlines switched off the lights, GameStop made a run at eBay, and Blackstone's private credit book began registering the first AI-driven write-downs on its 2021-vintage SaaS loan portfolio.
And the S&P 500 is punching all-time highs. Not a quiet week.
Monday
Tehran confirmed it had received a U.S. response to its 14-point peace proposal, relayed via Pakistan, though the core sequencing dispute remained unresolved from the outset.
The framework deferred nuclear talks to a final stage, sitting directly at odds with Washington's demand that enrichment limits be addressed before any ceasefire arrangement could be formalised.
Trump had already labelled the terms unacceptable in a Truth Social post over the weekend, though he acknowledged that discussions over the exact wording were still underway at that point.
OPEC+ voted to raise June output by 188,000 barrels per day in its first meeting since the UAE's departure, though the bloc's paper quotas bore little resemblance to what members were actually pumping.
Saudi Arabia was lifting 7.76 million barrels per day against a June quota of 10.29 million, with the Strait closure rendering those output allocations largely notional for the duration of the conflict.
Brent crude was trading just above $107 per barrel (bbl) at the Monday open, having touched a four-year high above $126/bbl the previous Thursday before diplomatic signals began trimming the geopolitical premium.
Spirit Airlines wound down after 34 years in business, having failed to secure a $500 million government bailout despite extended negotiations with the Trump administration.
CEO Dave Davis cited an inability to procure "hundreds of millions of additional dollars of liquidity" against the sustained run-up in fuel costs as the trigger for the orderly wind-down, with around 17,000 jobs lost.
The UK government announced temporary slot-alleviation rules for airlines, allowing carriers to consolidate passengers onto fewer aircraft over the summer as jet fuel climbed to $179 per barrel per the IATA's fuel price monitor.
Transport Secretary Heidi Alexander framed the measure as contingency planning, though the more accurate description was an emergency cost-management mechanism assembled quickly enough to carry a parliamentary wrapper.
UK goods exports had remained around 25% below pre-tariff levels a full year after Washington's 10% blanket tariff took effect, with the bilateral goods balance tipping into deficit in December and holding there through February.
Whisky exemptions and car tariff concessions announced since have done little to reverse the structural drag, with automotive export volumes also remaining below pre-tariff baselines a year on.
Approvals for new dwellings fell a larger-than-expected 10.5% in March - worse than Westpac's 10% forecast - driven by a 30.2% fall in apartment approvals after February's 191.2% surge.
Private sector house approvals edged 0.9% higher to 10,194 - the strongest reading since November 2021 - though the apartment reversal dragged the headline figure below expectations and highlighted the underlying supply pipeline difficulty.
Viva Energy targeted a June restart for its damaged residue catalytic cracking unit at the Geelong Refinery following the April fire, guiding production back above 90% capacity once the unit returned to service.
The company confirmed diesel and jet fuel output were running at around 80% of capacity and petrol at approximately 60% during the outage, with sufficient stocks held to maintain normal customer supply throughout.
Footwear retailer Accent Group (ASX: AX1) shed 13.4% after disclosing an ASIC investigation into potential insider trading between May and June 2025 and cutting its second-half EBIT guidance to A$23-28 million from A$30-35 million.
The retailer cited sharply weaker April sales as geopolitical uncertainty dampened consumer confidence, with the guidance downgrade compounding the reputational pressure from the regulatory notice in a single session.
Chicago Fed President Austan Goolsbee described recent inflation data as "bad news", with the PCE index running above 3% annually against the Fed's 2% target and the composition of price pressures increasingly broad-based.
Service sector inflation - insulated from tariff and oil pass-through - was accelerating alongside goods prices, pointing to something more entrenched than a transient commodity shock and reinforcing the case for holding rates at current levels.
Tuesday
Tehran launched drone and missile strikes on the UAE, with Abu Dhabi's air defences intercepting 12 ballistic missiles, three cruise missiles and four drones across multiple waves throughout the day.
An ADNOC tanker sustained a direct drone hit at a key oil port, triggering a fire, while the UAE condemned what it described as "renewed terrorist, unprovoked Iranian attacks targeting civilian sites and facilities".
A South Korean merchant vessel suffered an explosion and fire while transiting the Strait, and U.S. Central Command confirmed it had sunk six Iranian small boats attempting to obstruct Project Freedom convoy operations.
Wall Street retreated on Monday's oil surge and escalation, with the Dow shedding 557 points and WTI crude climbing 4.4% to $106.42/bbl as traders repriced the probability of a prolonged Hormuz supply disruption.
GXO Logistics dropped nearly 18% after Amazon opened its fulfilment and last-mile delivery network to third-party shippers, dragging UPS down 10.5% and FedEx 9.1% in the same session.
The announcement confirmed that Amazon's logistics infrastructure build has reached the scale where it can absorb external commercial volume profitably - a direct structural threat to the established freight and parcel carriers, geopolitical backdrop or not.
GameStop fell 10% after proposing to acquire eBay in a cash-and-stock deal at $125 per share, valuing the transaction at $55.5 billion and briefly sending eBay shares 5% higher on the news.
Analysts debated whether the meme-stock-turned-cash-box had arrived at a genuine capital allocation thesis or was running the retail investor attention cycle for another lap - a distinction the market appeared unwilling to reward.
Palantir posted its strongest-ever quarterly revenue growth - Q1 revenue up 85% to $1.63 billion, U.S. government revenue up 84% to $687 million - as federal AI contract volumes compounded well ahead of consensus.
CEO Alex Karp cited a Rule of 40 score of 145, though UK and Australian lawmakers calling for contract reviews following Palantir's recent "hard power" manifesto added reputational overhang, the earnings print alone won't settle.
The RBA lifted the cash rate 25bp to 4.35% on an 8-1 vote, with the board citing March CPI at 4.6% and a persistently tight labour market at 4.3% unemployment as the proximate triggers for the move.
Early evidence that businesses were passing higher input costs through to consumer prices added urgency, with the RBA's liaison program flagging a rising share of firms expecting above-average price increases over the coming year.
The board's risk scenario was unusually explicit: a prolonged Hormuz disruption could simultaneously push inflation higher and compress household consumption below the baseline forecast, removing the rate-cut optionality typically gestured at in post-meeting statements.
Wednesday
Reports from Axios suggested Washington and Tehran were drafting a one-page agreement built around a pause on nuclear enrichment, and markets moved well before the diplomatic ink was dry.
Trump announced a pause to Project Freedom, citing negotiating progress and caveating immediately that "if they don't agree, the bombing starts" - the usual posture, though materially consequential given the tanker count still idle in the Gulf.
Equities pushed to fresh all-time highs in response, with the S&P 500 climbing 1.5% to 7,365.12 and the Nasdaq up 2% to a record close of 25,838.9 as the geopolitical risk premium unwound sharply.
WTI crude dropped 7% to $95.08/bbl, and Brent fell to $101.27/bbl - a $30/bbl retreat from the prior week's peak, compressing in a single session what months of Hormuz escalation had built into the price.
AMD provided the session's standout earnings result, with data centre revenue surging 57% to US$5.8 billion, total Q1 revenue up 38% to US$10.25 billion, and Q2 guidance of US$11.2 billion arriving roughly US$700 million above Street consensus.
Shares jumped 16.5% in after-hours trading as CEO Lisa Su confirmed Meta and OpenAI had placed Helios AI server rack orders, with forward customer demand tracking ahead of AMD's own internal projections.
NVIDIA and Intel followed AMD's lead by 5.7% and 4.5%, respectively, as the AI infrastructure bid returned the moment the geopolitical risk premium started its unwind.
Shopify beat Q1 estimates but issued cautious forward guidance and fell, while Super Micro posted a revenue miss alongside strong guidance and closed 24.5% higher - the market pricing forward outlook clearly over trailing results.
April job openings showed hiring rebounding sharply despite easing vacancy counts, and ADP's private payrolls print of 109,000 - the strongest in over a year - added enough labour market resilience to further complicate the Fed's inflation calculus.
U.S. median home prices had slid to a four-year low in March, a function of compounding rate pressure and affordability exhaustion rather than any demand shock linked to the Hormuz closure.
Germany pushed for stronger European defence spending commitments as NATO members continued accelerating budget allocations above the 2% GDP threshold, a trend running independently of the Middle East crisis but gaining further momentum from it.
Strategy booked sharply lower earnings after February's Bitcoin sell-off hit its mark-to-market positions, a reminder that the company's leveraged cryptocurrency accumulation strategy amplifies volatility in both directions with equal efficiency.
The Australian government committed A$10 billion to build a national fuel reserve, a direct fiscal response to the Viva Energy outage and the Hormuz-driven surge in crude import dependency that tipped the March trade balance into deficit.
Thursday
Markets extended Wednesday's gains, though the session split cleanly between a technology-driven rally and two data prints quietly registering the structural damage the Strait closure was inflicting on Australia's external accounts.
Walt Disney beat second-quarter expectations on streaming and theme park attendance, closing 7.5% higher, while Uber missed its headline quarterly numbers but issued booking guidance strong enough to push shares 8.5% higher on the day.
Marriott beat and lifted its full-year guidance despite flagging booking disruptions tied to the Middle East conflict, a result reinforcing the bifurcation between premium travel demand and the budget segment's acute fuel exposure.
Warner Bros. Discovery reported a widening quarterly loss on acquisition charges - a recurring line item in its post-merger income statement rather than a signal of anything operationally new in the underlying business.
The full scope of U.S. airline jet fuel exposure became visible as carriers disclosed capacity reductions and fare adjustments, with fuel at $179/bbl rendering thinner-margin routes unviable across the network.
The dynamic that had closed Spirit - a budget carrier with no fuel hedges and no balance sheet depth - was now showing up in the forward schedules of better-capitalised operators as a capacity management problem.
March trade data confirmed Australia had posted its first deficit since December 2017, landing at an A$1.84 billion shortfall against a consensus expectation of an A$4.25 billion surplus.
Goods exports fell 2.7% on weaker ore and coal shipments while imports surged 14.1%, led by a 204% monthly jump in automated data-processing equipment and a crude oil build tied directly to the Viva Energy refinery outage.
The week's most consequential technology story centred on Anthropic's path to a US$900bn valuation, with the Claude-maker overtaking OpenAI on annualised run-rate revenue in early April to reach approximately $40 billion.
On 6 May, Anthropic executed a compute deal with SpaceX's xAI for all available capacity at the Colossus 1 Memphis facility, delivering access to more than 220,000 NVIDIA GPUs within the month at a time when forward supply from Amazon, Google and Microsoft was still quarters away.
The hardware agreement translated within hours into doubled Claude Code rate limits and expanded API throughput for Opus users - an unusually direct line between a supply-side deal and same-day product changes visible to paying subscribers.
The deal carried an unusual footnote: Elon Musk had labelled Anthropic "misanthropic" as recently as February and was simultaneously in federal court pursuing his OpenAI lawsuit when he handed excess GPU capacity to OpenAI's closest revenue competitor.
The decision followed time spent with senior Anthropic staff the previous week - a transaction that said something either about Musk's commercial pragmatism or his current assessment of OpenAI's competitive position, possibly both.
A joint venture between Blackstone, Goldman Sachs, and Hellman & Friedman to deploy Claude engineers inside corporate clients launched on the same day OpenAI stood up an identical vehicle with TPG and Bain Capital.
Both labs arrived at the same conclusion simultaneously: durable margin lives in implementation and professional services rather than API licensing alone, with every dollar spent on software typically accompanied by six dollars in services spend.
Trump warned Tehran that the consequences of a failed deal would include resumed strikes at "a much higher level and intensity", simultaneously signalling that agreed terms were close to final.
It was the usual negotiating posture, rendered unusually consequential by the tanker count still idle in the Gulf and the accumulated crude shortfall growing by roughly 20 million barrels every day the Strait stayed closed.
Friday
Shell posted more than double its prior quarterly earnings at $6.9 billion for Q1 2026, though CEO Wael Sawan used the result to frame the global crude supply situation with unusual directness.
Sawan estimated an accumulated shortfall approaching one billion barrels - roughly ten days of global demand at current consumption rates - described by the IEA as the largest supply shock in the oil market's recorded history, and still growing daily.
ConocoPhillips had flagged earlier in the week that all pre-hostilities tankers out of the Persian Gulf have now delivered their cargoes, meaning the full downstream supply impact is only beginning to register in refined product inventory data at consuming economies.
Shell guided Q2 Integrated Gas production sharply lower to 580,000-640,000 boepd from 909,000 boepd in Q1, as Qatari volumes were disrupted and a heavier scheduled maintenance programme compressed throughput - a forward read suggesting the crunch has further to run regardless of diplomatic timing.
Alaska Airlines moved to raise US$500 million in new debt to absorb the fuel shock, with carriers across the industry drawing down liquidity headroom at a pace not seen since the early months of the pandemic.
Accommodation platform Airbnb delivered mixed results amid Middle East conflict, with cross-regional booking disruptions visible in forward guidance even as deal optimism had pushed equities to record closes earlier in the week.
Iran remained still reviewing the U.S. proposal as localised clashes continued, the gap between where diplomats said the talks were heading and what was actually happening at sea remaining wider than market pricing implied.
The week's sharpest structural story arrived quietly on Friday, with Blackstone Secured Lending Fund and BlackRock TCP Capital both posting Q1 NAV declines - BXSL down 2.4% to $26.26 per share, BlackRock TCP down 5.0% to $6.72.
Both BDCs attributed the markdowns to deteriorating positions across their enterprise software holdings, with Blue Owl Capital having disclosed similar NAV cuts a day earlier and moved to offload $1.4 billion in assets to cover elevated withdrawal requests.
In context:
The losses trace to 2020-22 vintage leveraged buyouts of SaaS businesses, funded with ARR-based direct lending at multiples that assumed durable double-digit recurring revenue growth and near-zero refinancing costs across the hold period.
AI is now compressing pricing power and accelerating churn across precisely those software categories, converting what lenders originally underwrote as stable, long-duration cash flows into credit events with escalating restructuring complexity.
Medallia is the reference case - taken private by Thoma Bravo for $6.4 billion in 2021 and now carrying roughly $3 billion in debt, with annual interest obligations running materially above its approximately $200 million in EBITDA.
Lenders terminated the payment-in-kind toggle at year-end 2025, requiring full cash coupon payments and adding roughly $100 million to Medallia's annual debt service burden, with a debt-for-equity swap now the widely expected resolution.
Blackstone holds approximately $1.5 billion of that exposure, marked down more than 30%, making it one of the largest private credit workouts on record and the clearest data point yet in what may be a broader vintage problem.
Whether Medallia is a single-name blowup or an early read on the 2021-vintage SaaS loan book more broadly is the question the private credit market has not yet answered.
The week in numbers
- US$126/bbl - Brent crude four-year high reached the prior Thursday, before the deal rally
- US$95.08/bbl - WTI settlement Wednesday after the 7% single-session drop on Iran deal signals
- 4.35% - RBA cash rate, up 25bp, highest since the post-GFC tightening cycle
- 4.6% - Australian CPI in March, with fuel contributing 0.8 percentage points
- A$1.84 billion - Australia's March trade deficit, first since December 2017
- 10.5% - Australian dwelling approval decline in March, led by a 30.2% fall in apartments
- 38% - AMD's Q1 revenue growth, with data centre up 57%
- 85% - Palantir's Q1 revenue growth, highest in the company's history
- ~US$40 billion - Anthropic's approximate annualised run-rate revenue, above OpenAI's $25 billion
- ~1 billion barrels - Shell CEO's estimate of the accumulated global crude shortfall
- 109,000 - U.S. private sector jobs added in April per ADP, above expectations
