We told you this morning to watch Truth Social before the bell. At 11:47 p.m. Sunday, Trump posted what he called "Project Freedom", a plan to guide stranded ships through the Strait of Hormuz under U.S. military escort.

By this morning, Iran had fired missiles at the United Arab Emirates. The UAE activated its missile defense system for the first time since the ceasefire began. Israel and Bahrain both issued military alerts. CENTCOM confirmed two U.S.-flagged vessels had successfully transited the Strait.

The ceasefire that held for nearly four weeks is effectively over.

Brent crude surged to $114 before pulling back toward $110. WTI crossed $105. The Dow fell 522 points at its worst. Mortgage rates are back above 6.5%. The 10-year Treasury yield jumped to 4.45%.

And tonight, after the close, Palantir reports earnings in what options markets are pricing as a 10.5% move in either direction.

This is the most consequential single day since the war restarted. Let's get into all of it.

Here is the precise sequence of events that defined today.

Sunday night at 11:47 p.m. ET, Trump posted on Truth Social announcing "Project Freedom" — a U.S. military operation to guide ships through the Strait of Hormuz. He wrote that the U.S. would "free" stranded vessels and restore commercial transit. CENTCOM confirmed shortly before Monday's opening bell that two U.S.-flagged merchant ships had successfully crossed the key waterway — the first confirmed successful commercial transit under U.S. military escort since the war began.

Then Iran responded.

The UAE announced it had intercepted a number of missiles believed to be fired from Iran — the first time the UAE's missile defense system had been activated since the ceasefire began last month. Israel's army was put on high alert. Bahrain declared a state of alert. Reports circulated that an Iranian missile had struck a U.S. warship — CENTCOM immediately and firmly denied it, posting on X: "No U.S. Navy ships have been struck. U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports."

Iran also sent a new proposal today: a one-month deadline to end the war and reopen the Strait, with conditions that include both sides lifting their blockades, an end to the war in Lebanon, and the release of Iran's frozen assets. The U.S. is not expected to accept those terms in their current form.

Here is the honest assessment of where we are: Project Freedom is not a ceasefire. It is a unilateral military operation. Trump has decided not to wait for a negotiated agreement to reopen the Strait — he is reopening it by force. Iran is responding with the only tool it has left in the region: missiles. The ceasefire framework that held for 26 days is functionally over. We are back in active conflict, with the added complexity of U.S. warships now actively escorting commercial vessels through a contested waterway.

The key question for markets: can Project Freedom succeed in normalizing Strait transit even without a peace agreement? If yes, oil begins a sustained decline toward the $80-90 range as physical supply resumes and the war premium deflates. If Iran's missile capability proves sufficient to deter commercial shipping even under U.S. escort, oil stays above $110 and the economic damage compounds.

CHEVRON CEO Mike Wirth said it plainly at the Milken Institute conference today: "It's not just a question of price. It's actually — can we get the fuel? I think over the course of the next several weeks, we'll see those effects begin to move throughout the system."

Watch the tanker tracking data. The number of ships successfully transiting the Strait under Project Freedom escort is the single most important market variable of the next two weeks.

Dow down 522 points at the worst. Then a recovery. S&P 500 down 0.4%. Nasdaq down 0.2%. Given that the ceasefire has functionally collapsed and missiles were fired at a U.S. ally this morning, the resilience is remarkable.

Two things are holding markets up.

First: the two ships. CENTCOM's confirmation that two U.S.-flagged vessels successfully transited the Strait under Project Freedom is the most important market signal of the day. If the U.S. military can escort ships through the Strait regardless of whether Iran agrees to a peace deal, the oil market's worst-case scenario — a permanent closure — becomes significantly less probable. The market is not celebrating. But it is recognizing that Project Freedom, if it works, changes the calculus on oil supply.

Second: Goldman Sachs published a note this morning that stopped every technology investor in their tracks. Consensus forecasts for hyperscaler capital expenditure in 2026 have been raised by nearly $80 billion since the start of earnings season. The five largest hyperscalers — Amazon, Google, Meta, Microsoft, and Oracle — are now expected to spend $751 billion in capex in 2026, representing 83% growth versus 2025. That figure compares with $673 billion at the start of earnings season and $546 billion at the beginning of 2026.

Let that number sink in. $751 billion in AI infrastructure spending in a single year. From five companies. That is more than the GDP of Switzerland. And every semiconductor company, every data center REIT, every power utility, every cooling system manufacturer, every fiber optic provider is a direct beneficiary of that spending wave. It is why the PHLX Semiconductor Index is tracking its 22nd win in the last 23 sessions and has hit its 15th intraday all-time high of 2026 today even while the broader market falls.

The AI trade and the war trade are running simultaneously in opposite directions. The faithful steward needs to hold both in view without letting either dominate the whole picture.

Lost in today's geopolitical noise was a data point that deserves attention: March factory orders rose 1.5% — the largest monthly increase since November and well above the 0.5% consensus estimate. The Commerce Department attributed the surge to soaring demand for electronic components underpinning AI technology.

This is meaningful context heading into Friday's jobs report. The manufacturing sector, which many economists feared would be decimated by $4.30 diesel and supply chain disruption, is instead being partially insulated by the AI infrastructure buildout. When hyperscalers commit to $751 billion in capital expenditure, that spending flows into factories making servers, cooling systems, power infrastructure, and the chips that power everything. The manufacturing sector is experiencing a tale of two worlds: traditional energy-intensive industries under pressure from the war, and AI-linked electronics manufacturers experiencing a demand surge that has no precedent.

Friday's jobs report will tell us whether that manufacturing resilience is translating into hiring.

On May 2, 2026, Spirit Airlines started an orderly wind-down of operations, effective immediately. All 4,119 scheduled domestic flights between May 1 and May 15 were canceled. Seventeen thousand workers — 14,000 Spirit employees and thousands of contractors — lost their jobs overnight.

This did not come out of nowhere. But the specific reason it happened now is the single most important sentence in the entire Spirit story for the faithful steward.

Spirit built its restructuring plan around jet fuel costs averaging approximately $2.24 a gallon in 2026 and $2.14 in 2027. As of May 2, jet fuel prices had surged to $4.51 per gallon on average. That is not a rounding error. That is a 100% cost increase above plan. The collapse shows how the Iran war's fuel-price shock has exposed weaker airlines. Spirit's restructuring plan assumptions were obliterated by the war, leaving the carrier unable to survive without fresh financing.

Spirit filed for bankruptcy twice since 2024 and had sought a $500 million federal bailout from the Trump administration. Those talks failed when a key group of creditors rejected the deal. Transportation Secretary Sean Duffy told reporters he tried to get multiple airlines to acquire Spirit but found no takers. His exact quote deserves to sit here: "What would someone buy?"

Here is what this means for our portfolio and our outlook on the airline sector.

The direct impact on fares — and our DAL and LUW positions. Consumer advocates warned that without Spirit flying its routes, "everyone will be paying more." Spirit had an important competitive effect on fares even for passengers who never flew the airline — its presence forced legacy carriers to keep prices lower on overlapping routes. United Airlines, Delta, JetBlue, and Southwest are already capping fares for displaced Spirit passengers at approximately $200 for a one-way ticket. Those caps are temporary goodwill gestures. Once the rescue fare window closes, legacy carriers will reprice those routes at market rates — and market rates without Spirit's competition will be higher.

For Delta and Southwest — both of which we hold — this is a genuine medium-term revenue tailwind. Routes that Spirit operated overlap significantly with Delta and Southwest's domestic networks. With Spirit's seats permanently removed from the market, load factors improve, pricing power increases, and revenue per available seat mile expands. This does not make us want to add aggressively to our airline positions while $4.30 jet fuel remains the operating environment. But it meaningfully strengthens the long-term thesis for the carriers that survive this crisis.

"The prudent sees danger and hides himself, but the simple go on and suffer for it."
— Proverbs 22:3

We return to this verse today — the same one we used on October 20 when the market was pricing complacency and Iran was publicly announcing it had spent the ceasefire reloading missiles.

The ceasefire is over. The missiles are flying again. Project Freedom is an act of will against a military adversary that has demonstrated it is willing to fire on U.S. allies. The Chevron CEO said this morning that the question is no longer about price — it is about whether fuel can be physically obtained.

The prudent steward does not panic. They also do not ignore what is in plain sight.

Our TIPS hedge is active. Our PG defensive position is active. Our energy core positions held through the ceasefire and are now validated again. Our stops on airlines protected us from the worst of today's move. We did the work. The work is holding.

We will have Palantir results and the full picture tomorrow morning before the open.

The ceasefire that held for 26 days is over. Project Freedom is live. Missiles are flying at the UAE. Two U.S.-flagged ships are through the Strait. Palantir reports this afternoon. AMD reports tomorrow. The April jobs report arrives Friday.

This is not a week for the faint of heart. It is precisely the week that every framework we have built through 64 issues of Bread & Bull was designed for.

Stay steady. Stay disciplined. Stay grounded.

Nathan Grey
Senior Editor
Bread & Bull