What’s News in Markets: Persian Gulf Oil Damage, Defense Stocks Under Fire, AI Revivals

The week closed with the S&P 500 and Nasdaq posting fresh record highs, while the Dow hovered near flat. Energy shares led the rally, climbing roughly three percent as analysts warned that the escalating conflict in the Persian Gulf could choke one of the world’s most vital oil corridor. Brent crude surged nearly 17 % to about $105 per barrel, reflecting expectations that damaged infrastructure and workforce exodus will keep supply tight for months. Investors priced in higher oil prices, bolstering the broader market despite lingering geopolitical uncertainty.

Defense titans underperformed, with both Lockheed Martin and Northrop Grumman sliding about 13 % despite reporting higher sales and profit. Lockheed missed Wall Street earnings estimates and burned more cash than anticipated, raising concerns that rising R&D costs and heavy capital spending could erode margins. Analysts suggested the recent run‑up in defense valuations may already be baked into prices, leaving little upside on earnings beats. Even with the ongoing war driving demand for weapons, investors remain cautious, preferring to wait for clearer guidance on cost structures before rewarding the sector.

The AI resurgence breathed new life into legacy chipmakers and telecom equipment firms. Intel’s shares vaulted more than 20 % after the company posted stronger‑than‑expected first‑quarter revenue, driven by soaring demand for CPUs that power generative‑AI models. The rally lifted Intel to a record close of $82.57, its highest since the 2000 dot‑com peak. Nokia also posted a 3.5 % gain, citing a 12 % sales lift from AI‑focused data‑center customers. These moves underscore how artificial‑intelligence workloads are reshaping earnings narratives across sectors, offering investors fresh growth catalysts amid broader market volatility.