Trump will interrupt Survivor tonight.
That’s appropriate as we’re all playing Survivor in the US Economy this year. The S&P 500 is only down 4.63% for the year but 6.7% off the January highs – still, better than 10% – thanks entirely to yesterday’s massive reversal. Under the hood, this is a Survivor market with a tiny tribe of mega‑caps keeping the index afloat while most of the S&P 500 is already in correction territory.
As of the end of March, the top 10 stocks in the S&P 500 (NVDA, AAPL, MSFT, AMZN, GOOGL, META, AVGO, TSLA, BRK.B, JPM) make up about 37% of the index’s market cap.
Goldman Sachs notes that this small group has accounted for over half of the index’s market‑cap gains since 2021 and is expected to contribute 40–50% of total EPS growth in 2026. Nonetheless, as a group, the Mag 7 has fallen from 68 in Dec to $55 on Monday and that was 19.11% but 20% if you count 69 in November and THAT is why we bounced 4% (weak bounce per our 5% Rule™) yesterday – it was bound to happen and Trump and the WSJ just so happened to provide a catalyst on the last day of the quarter.
So, like Survivor, there are a few companies doing most of the work while most of the others lay on the beach, plot and scheme how to get rid of the best companies and, mostly, complain about the conditions they are suffering. This is not a broad market – it’s ten contestants building the entire shelter in the storm…
The average S&P stock is doing noticeably worse than the headline suggests. The Invesco S&P 500 Equal Weight ETF (RSP) – which gives every stock the same weight – is back to flat for the year after falling 20 points (9.7%) from the high on Monday and, again, a 10% drop gives us a 2% (4 points) weak bounce and a 4% (8 points) strong bounce to 193 – which is EXACTLY where we are this morning. Will it hold?
As Penny and Roy discussed in yesterday’s Podcast, there has been no real change – just a rumor by the Wall Street Journal and the usual BS from Trump which, as usual, was refuted by the Iranians and the narrative is that “this is how they negotiate” – like children with nuclear weapons?
The Earnings picture is also lopsided. Goldman’s latest 2026 outlook has S&P 500 EPS rising to about $309, up 12% from 2025 but they explicitly show Technology and the mega‑cap “AI complex” driving 40–50% of that EPS growth by themselves. The “S&P 493” – everyone except the Magnificent Seven and their friends – only managed to narrow its earnings growth gap versus the leaders in late 2025 and is now facing war, tariffs, and higher‑for‑longer rates with much less pricing power.
So, when we say the S&P is down “only” 4.6% from the highs, what we really mean is:
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- A handful of mega‑caps are still getting confessionals and immunity idols.
- A big chunk of the rest of the index is already in its own correction, with guidance marked down and multiples compressed while the camera stays fixated on the AI tribe.
That’s the setup we’re trading: an index that looks resilient because of extreme concentration at the top, sitting on top of a much more fragile camp where most contestants are fighting just to stay on the island for another grueling day…
We HAVE to wait for earnings (two weeks) before re-deploying our capital because it’s not clear who’s really suffering from the war and if there will indeed be a war two weeks from now. As of yesterday, Iran, Israel and the US were still bombing away – despite the “peace” talks.
Here are Zephyr’s notes on the last 24 hours of war activity:
🌪️ To pick up where your draft leaves off—addressing the gap between the “peace rumor” rally and the actual bullets still flying—here are the key events from the last 24 hours to weave into your “Survivor” narrative:
1. The “Immunity Idol” Speech (Trump’s 2-3 Week Timeline)
The catalyst for yesterday’s 4% “weak bounce” was Trump’s claim that the US could exit Operation Epic Fury within two to three weeks.
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The “Survivor” Twist: Crucially, he said a deal with Tehran is “irrelevant” to this timeline. He’s essentially signaling he might just walk away and leave the “Strait of Hormuz” mess for others to fix.
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The Market Hook: This sent the S&P 500 up nearly 3% Tuesday, but as you noted, it’s a rally built on positioning rather than a signed treaty.
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2. The “Strait of Hormuz” Ransom Note
While the US talks about leaving, Iran is tightening its grip. Tehran announced new rules for the Strait, declaring that the era of “hospitality” is over.
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Pay-to-Play: Iran’s Foreign Ministry signaled that only “non-hostile” parties can pass, and even then, only with “necessary coordination” (read: permission and likely concessions).
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The Data: Analysis shows 71% of recent traffic through the Strait has been Iranian-linked “shadow fleet“ vessels, meaning the “energy blockade” for the rest of the world remains functionally in place.
- Infrastructure Hits: Iran launched attacks at Israel, Bahrain, Kuwait, and the UAE. A cruise missile struck an oil tanker leased to QatarEnergy.
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3. The “Tribal Council” Attacks (Ongoing Escalation)
Despite the talk of an “offramp,” the last 24 hours have been violent:
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Infrastructure Hits: A drone strike hit a fuel tank at Kuwait International Airport, and another tanker was struck off the coast of Qatar.
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Human Cost: In the UAE, one person was killed by debris from an intercepted drone in Fujairah.
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Cyber/Corporate Threats: The Revolutionary Guard specifically threatened to target 18 US tech companies (including the “AI complex” leaders like Microsoft, Google, and Tesla) starting today – a direct shot at the “AI Tribe” you’re monitoring.
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4. The NATO “De-friending“
Adding to the uncertainty, Trump is threatening to pull the US out of NATO, calling it a “paper tiger” because allies like the UK, France, and Italy refused to join the military operations (which they consider illegal). This isolationist pivot complicates any “coalition” effort to reopen the Strait and adds a layer of geopolitical de-risking that the 4% rally isn’t pricing in yet.
5. Impact on Big Memory
Despite the “peace hopium,” Samsung and SK Hynix shares jumped nearly 7% today in Seoul. However, UBS analysts warn that the market is being “complacent” about the supply shock. If the Strait remains a “peaceful waterway” only on Iran’s terms, the 11 million barrels of crude lost daily will eventually break the back of the tech recovery.
We WANT the war to be over. We WANT things to go back to “normal” but let’s make sure we have REAL EVIDENCE that that’s actually happening before we start jumping back into the market.
Look at Nike (NKE) yesterday. They beat on revenues and they beat on earnings but the mix and the guidance displeased traders and sent them plunging 11%, to what is now (at $47 – $69.5Bn in market cap) 24.4x forward earnings.
Tariffs and shipping costs have caused NKE to make half as much money on the same sales but this is a debt-free company with solid cash-flow and they WILL survive Donald Trump so, if your investing time-frame is 3 years or more – Nike looks like they could be a Survivor!
