Wall St stocks clock best monthly gains since pandemic

Good morning. Here’s what happened overnight and what you need to know today.

1.

Tech shield: US stock indices rose to new record highs closing their best month since the pandemic, with the S&P 500 up 13.6% in April and the Nasdaq 19.7%, even as Brent crude briefly surged to USD126.41 overnight on fears the Iran war could escalate further. Alphabet shares rose 10.2% after Google Cloud revenue surged to a record of more than USD20 billion. Nvidia, however, fell 4.6% as investors weighed rising competition from the likes of Google and Amazon, amid reports the crackdown on chip smuggling in China has nearly doubled prices for Nvidia’s restricted B300 servers to USD1 million each. Meta and Microsoft also fell on concerns over soaring AI capital expenditure, as the four hyperscalers that reported yesterday — Amazon, Meta, Microsoft and Alphabet — announced combined plans for USD725 billion in AI spending this year, 77% above last year’s record. Caterpillar hit a record high after raising its full-year outlook on strong data centre and construction demand. Oil settled 3.4% lower at USD114.01 after the early surge, following reports Trump would be briefed on fresh military options against Iran, which threatened “long and painful strikes” if the US resumed attacks. Elsewhere, Trump said he would lift whiskey tariffs tied to Scotland-Kentucky trade “in honour of the King and Queen of the United Kingdom”. (Bloomberg)(Reuters)(AP)(WSJ)(FT)

2.

German check: Trump announced a review of US troop levels in Germany, deepening a public rift with Chancellor Friedrich Merz over the Iran war just as Trump faces a legal deadline Friday local time to end the conflict or seek a congressional extension. Trump posted on Truth Social that the US was “studying and reviewing the possible reduction of troops in Germany,” then told Merz to focus on ending the Russia-Ukraine war and “fixing his broken country” rather than commenting on Iran. The posts came days after Merz said the US had gone into the Iran war “without any strategy” and that Iran was “negotiating very skilfully.” Germany hosts about 37,500 of the 80,000 US troops stationed across Europe, including the Ramstein air base, the largest US base outside America. Merz reaffirmed Berlin’s openness to joining a mission to reopen the Strait of Hormuz once conditions were met. Meanwhile, Pete Hegseth faced a second day of congressional hearings before the Senate Armed Services Committee, where he claimed the 60-day War Powers Resolution deadline was legally paused by the ceasefire, a position Democratic Senator Tim Kaine said he had “serious constitutional concerns” about. (Bloomberg)(Reuters)(AP)(FT)

3.

Sunrise 2026: Engineers inside Canva are now graded against a seven-level AI competency framework, co-founder and COO Cliff Obrecht told Blackbird partner Rick Baker in front of a packed room on stage at the VC’s Sunrise summit, running from basic code completion at level one to “running a team of agents autonomously 24/7” at the top. The expectations attached to each specialty are being “ratcheted up” as the company progresses, Obrecht explained as he laid out what it takes to stay competitive in the AI fast lane. Next week Canva runs what Obrecht called AI Discovery Week, a stretch of structured training and unstructured time for staff to experiment. The premise, Obrecht said, is non-negotiable. “If you are not excited to use the latest technology and really dive head first into the latest technology, as an employee at a technology company, you probably shouldn’t be working in technology.” At the same event Baker told the room that Australia is defaulting to building data centres and missing the real wealth being created at the software and model layer. And Anthropic’s head of product for Claude Code Angela Jiang warned software founders that to survive the AI era they need to build much deeper into workflows and create more value. (Capital Brief)(AFR)(Capital Brief)

4.

AI GDP: The Bureau of Economic Analysis estimated the US economy grew at a 2% annualised rate in the first quarter of 2026, below forecasts of 2.2-2.3% but well above the shutdown-dented 0.5% pace of the prior quarter. Business spending on equipment and intellectual property rose at its fastest pace in nearly three years, contributing close to 1.5 percentage points to overall growth. “Even after accounting for the fact that most computer equipment is imported, AI investment seems like it accounted for about half of the overall GDP growth in the first quarter,” Pantheon Macroeconomics economist Oliver Allen said. It comes as the four major hyperscalers, Microsoft, Alphabet, Amazon and Meta, yesterday showed they are collectively planning capital expenditure 77% above last year’s record USD410 billion. Consumer spending, which accounts for more than two-thirds of the economy, slowed to a 1.6% rate from 1.9% the prior quarter. The personal consumption expenditures price index rose 3.5% year-on-year in March, its highest since May 2023, with petrol prices continuing to rise. Meanwhile, weekly jobless claims fell to 189,000, the lowest since May 1969. (Capital Brief)(BEA)(Bloomberg)(Reuters)(WSJ)(FT)

5.

Pilot pikers: The Commonwealth Bank and Macquarie won’t participate in an industry trial of free ATMs in regional areas designed to assuage growing pressure from Canberra. Capital Brief has confirmed the two have ruled themselves out as the Australian Banking Association (ABA) applies for ACCC authorisation on behalf of the industry to collaborate on a five-year trial to install and operate fee-free cash machines in 20 key regional areas. If approved by the ACCC, the pilot would see participating banks, ATM operators and the Australian Payments Network pool resources and test appetite for cash machines to withdraw and eventually deposit cash in areas where branches have dwindled or disappeared altogether, with the hope of alleviating strain on small business. A Commonwealth Bank spokesperson said the bank fully supports cash access and was already pulling its weight without needing to join this pilot. Regional Australia Bank chief executive David Heine argues the ATM trial is one of several industry solutions being proposed in lieu of a regional bank levy, but is no substitute for proper branches. (Capital Brief)

6.

Lip-Bu coup: Australian government-backed PsiQuantum appointed Intel CEO Lip-Bu Tan to its board of directors as the window for meeting plans to build the world’s first commercially useful quantum computer in Brisbane by 2027 narrows. Tan has been CEO of the USD476 billion ($665 billion) chipmaker since March 2025 and led the company while it negotiated with the Trump administration over the sale of a 10% equity stake to the US government. He was also an early investor and adviser to PsiQuantum from at least 2021. “I’ve known the PsiQuantum team for many years as an investor,” Tan said in a statement. “The technology they’ve developed is exceptional, and their focus on fault-tolerant systems that can be manufactured at scale using the semiconductor industry sets them apart.” Tan’s addition to the board follows the appointment of interim CEO Victor Peng, who was formerly president of AMD and CEO of semiconductor company Xilinx. (Capital Brief)

7.

Downgrade warning: Nobody knows how long the Iran war will last, but Woolworths’ earnings downgrade yesterday was the strongest signal from the ASX to date that the inflation caused by the conflict could get worse. Speaking to analysts, Woolworths CEO Amanda Bardwell warned that the inflationary impacts coming through its suppliers and “our commitment to an always-on cost discipline, is incredibly important over the next six and 12 months ahead”. Ahead of this, the supermarket giant said full-year EBIT growth for the Australian food segment was no longer expected to be at the upper end of its previously guided “mid to high single-digit” range on the $2.75 billion posted in FY25 amid increasing fuel and supplier costs as well as ongoing promotional activity. The squeeze on margins and downgrade to EBIT growth was punished by investors, who sent the stock down about 7% following the quarterly report. (Capital Brief)

8.

Seeing red: Airwallex reported more than $100 million in Australian revenue for the first time, even as losses widened and the AUSTRAC investigation into potential money laundering through its platform continues. Accounts filed with ASIC yesterday showed revenue rose 30% to $105.6 million in 2025, while after-tax losses widened to $17.2 million from $12.8 million the prior year, according to media reports. Employee costs rose 23% to $69.9 million and advertising expenditure surged more than 61% to $14.9 million, according to The Australian. Total equity fell to $67 million, with accumulated losses reaching $70.4 million, though the company holds $721.8 million in cash. ANZ general manager James Teodorini said the company had chosen growth over profitability. “We purposefully invested in talent and capability as we believe that is the right call at this stage of our ongoing expansion,” he said. The company was most recently valued at USD8 billion during a funding round last December. (AFR)(The Australian)