Friday’s macro centrepiece was the University of Michigan’s final April consumer sentiment reading of 49.8 — a slight improvement from the preliminary 47.6 but still the lowest reading since records began in 1952, below even the lows of the Great Recession and the 2022 inflation peak. The final reading reflects a modest partial recovery after the two-week ceasefire announcement helped gasoline prices soften slightly, but the broader picture remains one of deeply depressed consumer confidence driven by Iran-war energy price shocks. One-year inflation expectations surged to 4.7% from 3.8% in March — the largest single-month jump since April 2025 — while long-run expectations climbed to 3.5%. When consumers simultaneously have the lowest confidence on record and the highest short-term inflation expectations since 2025, the consumption growth outlook for Q2 2026 looks distinctly fragile.

The bond market’s relatively calm response to the Michigan data — the 10Y yield dipping just 1bp to 4.32% — reflects the markets’ primary focus on the Warsh confirmation story and the Iran peace talks rather than the consumer data. The DOJ dropping the Powell probe is structurally significant: it removes a central source of institutional uncertainty around the Fed’s independence and forward policy trajectory. From a market structure perspective, the announcement clears the path for Warsh’s Senate confirmation vote, which is now expected before Powell’s May 15 term expiry — potentially giving the market a new Fed Chair in under three weeks. Warsh’s framework — which prioritises inflation control and maintains independence from political rate-cut pressure — is broadly dollar-positive and gold-negative, which is precisely the signal asset markets sent today: DXY softened marginally on Iran-peace-talk de-escalation but the gold weakness (-0.44%) signals the Warsh premium is being priced.

Intel’s result is not merely the story of one company — it is the most important single quarter for semiconductor and AI hardware investment thesis validation since NVDA’s initial AI demand confirmation in 2023. To understand why: Intel was the consensus short in the chip sector. A year ago, the company had posted negative EPS expectations for multiple consecutive quarters. Its turnaround under CEO Lip-Bu Tan — focused on regaining CPU performance leadership for AI inference workloads and rebuilding the US foundry business — was viewed as speculative at best. The Q1 2026 result invalidates the bear case comprehensively. Data Center & AI revenue of $5.1B against $4.41B expected confirms that Intel’s CPUs are now winning AI inference workloads alongside NVDA’s GPUs rather than losing them to it — Lip-Bu Tan’s assertion that the CPU-to-GPU ratio in AI workloads is favourable is now revenue-supported, not theoretical. The Tesla-Intel catalyst is a secondary but significant development: Musk indicating that Tesla could spend approximately $3 billion with Intel’s chip fabrication business validates Intel Foundry Services as a credible alternative to TSMC — a thesis that Wall Street has resisted for two years. This changes the medium-term foundry narrative and is why AMD (+10.2%), NVDA, and even Texas Instruments extended their gains today alongside Intel itself.

P&G’s first positive volume print in 12 months is a meaningful consumer-macro signal. Volume growth — which strips out pricing effects — confirms that underlying demand for household staples is normalising after a prolonged period of consumer trade-down driven by the Iran-war inflation shock. The irony of today’s data is that P&G’s volume growth and Michigan’s record-low sentiment can both be simultaneously true: consumers are still buying everyday necessities (P&G’s categories) while feeling deeply pessimistic about discretionary spending, future finances, and broader economic prospects. This bifurcation between staples resilience and discretionary weakness is one of the defining structural features of a stagflation-adjacent environment — and it will be the critical debate in next week’s Mag-7 earnings, particularly in Amazon’s retail segment.