Stock market today: Dow, S&P 500, Nasdaq tick up as crude oil falls in wait for Iran-US deal update

US stocks were little changed to lower as markets waited for Iran’s response to a US peace proposal, while Brent crude fell about 4.8% to near $96 and WTI dropped 5.2% to around $90 on hopes of easing Strait of Hormuz disruptions. Inflation expectations rose to 3.6% for the next year, but cooler-than-expected jobless claims at 200,000 helped offset risk-off sentiment. On the corporate side, Datadog surged more than 30% after a beat-and-raise quarter and Whirlpool fell 12% on a deep demand miss, underscoring a mixed earnings backdrop amid continued AI-driven strength in semis and tech.

Analysis

The market is starting to separate beneficiaries of an AI capex cycle from the companies funding it. That is a subtle but important shift: the winners are no longer just model/platform names, but the picks-and-shovels layer with direct exposure to observability, networking, photonics, semiconductor tools, and power infrastructure. In that frame, DDOG’s move matters more than the headline suggests because it implies AI workloads are becoming monetizable infrastructure spend, not just experimental usage.

The risk is that mega-cap AI leaders are entering a phase where revenue growth is intact but free-cash-flow elasticity is deteriorating. If capex continues to outrun operating cash flow, the market will eventually stop rewarding “AI optionality” with the same multiple premium, especially for names with the richest valuations and the longest-duration cash-flow profile. Over the next 1-2 quarters, any guidance pause from GOOGL/MSFT/AMZN/META would likely hit the entire AI complex, even if underlying demand remains strong.

Geopolitics is creating a short-duration macro overlay that is more important for rate-sensitive consumers than for cyclicals. A sustained oil reset lower would relieve inflation expectations and reduce the probability of the Fed being forced into a hawkish posture, which is bullish for duration and quality growth; however, the bigger second-order effect is on consumer discretionary balance sheets and sentiment, where stress can persist even if energy reverses. WHR is the warning sign: when big-ticket replacement demand rolls over, it usually leads the broader consumer durables complex by several months.

The contrarian read is that semis may be too loved in the near term, but the AI infrastructure basket is not equally crowded. The market has already priced the idea that chips are scarce; it has not fully priced the downstream beneficiaries of actual deployment, where software and industrial capacity can compound with less headline risk. That favors a relative-value rotation rather than a blanket AI bet.

Key Decisions for Investors

• Long DDOG / short MSFT or AMZN for 4-8 weeks: express the view that AI monetization is accruing to observability while hyperscaler capex intensity compresses FCF multiple support. Risk is a broad AI-led squeeze if hyperscalers preannounce accelerating demand.
• Add to semi-tools and AI infrastructure basket via ASML, LRCX, KEYS, HWM, CMI on pullbacks over the next 1-2 weeks; these names have cleaner second-order leverage to real deployment than platform valuations. Use 5-7% trailing stops because the group is extended.
• Short WHR on rallies for a 1-3 month horizon; this looks like a cyclical demand break, not a one-quarter miss. Pair against ROST or a consumer ETF to isolate big-ticket weakness from general consumer exposure.
• Buy out-of-the-money puts on ARM into strength over the next 2-4 weeks; the stock appears vulnerable to any further evidence that supply, not demand, is the bottleneck. Use small premium risk because the setup is momentum-fragile.
• Keep a tactical long in JPM and C against any oil-driven easing of inflation fears for 1-2 months; lower input costs and steadier rate expectations should support capital markets and credit sentiment more than the broader bank complex.