The market is running a high-wire act: equities celebrating a GDP beat and AI earnings while the Strait of Hormuz blockade grinds into its 63rd day and PCE inflation sits at 3.5% YoY. Small caps led yesterday's surge, a classic growth-confidence signal, but gold sold off and the yen ripped 2.25% stronger, the kind of safe-haven divergence that doesn't square with a clean risk-on read. Futures are nearly flat this morning, suggesting the open will be a coin flip between momentum buyers and anyone who actually read the geopolitical tape.

All four major US indices closed higher Wednesday. The Russell 2000 led at +2.2% to 2,799.91, Dow added 1.6% to 49,652, S&P 500 gained 1.0% to 7,209, and Nasdaq picked up 0.9% to 24,892. The 10-year yield slipped 2.8 bps to 4.39%, gold dropped 0.7% to $4,581, WTI held near flat at $105.22, and the dollar index barely moved at 98.03. In FX, the yen's 2.25% surge to 156.58 is the overnight headline.

The rally had two engines. First, Q1 GDP printed at 2.0% versus a prior 0.5%, a sharp rebound that undercut the recession narrative the bears had been leaning on. Second, Apple guided revenue above estimates on iPhone and Mac demand, pulling tech sentiment higher even as Tim Cook flagged a memory supply crunch as a forward risk. Underneath both, the ceasefire holding the 60-day War Powers deadline at bay gave traders a window to buy the growth story without the immediate threat of new Hormuz kinetics. The Hormuz Premium in PCE at 3.5% YoY is real, but for one session the market chose to price the growth data, not the inflation tail.

The divergence between equities and gold is the tension to respect. Gold selling into a broad market rally is normal. Gold selling when PCE is at 3.5%, the Strait remains blockaded, and Trump is being briefed on new Iran strike options is not normal. That tells you institutional players booked profits on the geopolitical bid, not that the inflation risk has cleared. For ETF holders, energy remains a live trade (XLE, USO) given WTI at $105 with a $150 black swan scenario still on the table. Small cap strength suggests the GDP print is being taken seriously, but IWM buyers here are betting the ceasefire holds. TLT is worth watching: the 10-year barely moved despite a growth beat, which means bonds never fully bought this rally.

Futures are nearly unchanged, S&P futures at 7,250 (+0.10%), Nasdaq futures slightly negative at -0.16%, and Dow futures up 0.24%. APAC was split: Nikkei and ASX held gains while Hang Seng and KOSPI each dropped over 1.3%, reflecting the yen spike's knock-on effect on export-heavy Asian markets. Europe is essentially flat in early trade. The single swing factor today is the War Powers clock: the 60-day window expired, the Trump administration is claiming a ceasefire "pause" exemption, and any Congressional challenge or new military escalation near the Strait would reprice oil, rates, and equities instantly. New Home Sales at 10 AM ET is the data point but it's a distant second to the geopolitical headline risk.