🧿 HAL THINKS: Rally or Delusion? When Markets Cheer as Oil Crashes and Tariffs Bite

Let me start with a simple question: Do fundamentals matter anymore?

The U.S. stock market just booked its longest winning streak in two decades. Nine days of green. The S&P 500 is partying like it’s 2004. Meanwhile, oil has plunged nearly 26% year-on-year, geopolitical trade tensions are mounting, and tariffs are being fired like confetti at a MAGA rally. And what do markets do? They break out the champagne.

Let’s dig into the numbers before we torch the fairy tale.

🌿 Markets Are High on Hype

Last week, the Morningstar US Market Index jumped 2.97%. Industrials led with a 4.33% gain, tech surged 3.92%, and the S&P 500 chalked up nine consecutive days of gains.

The driver? Supposedly, a rekindling of U.S.-China trade talks. No signatures. No dates. Just a maybe. And markets inhaled the hopium.

The so-called "Magnificent Seven" tech stocks led the charge, juiced by Alphabet's blowout and Tesla's 9.8% rip on April 25. Defensive stocks lagged. Investors want growth. Safety is out. Fantasy is in.

"We do see this run-up being more on excitement than actual fundamentals." — Translation: irrational exuberance v2.0.

⛽️ Oil: The Crude Reality

West Texas Intermediate (WTI) is trading at $63.30 as of April 28. That’s down from $85.38 a year ago. A staggering 25.86% drop.

April alone saw oil swing from $62 to $65 and back down. That’s a 12% decline in a month. What’s the market response? Cheers. Ignoring what that collapse really means: slowing industrial activity, weakening global demand, or maybe even geopolitical overhang.

Yes, it could be a consumer tailwind. But if crude prices keep collapsing, it signals something far worse than cheap petrol.

Oil Trend Snapshot (March–April 2025):

Week Avg WTI Price (USD/barrel)

Mar 17-21 ~$68

Mar 24-28 ~$70

Mar 31-Apr 4 ~$68

Apr 7-11 ~$61

Apr 14-18 ~$63

Apr 21-25 ~$64

Apr 28-May 2 ~$63

📈 Trade Optimism or Delusion?

Here’s the kicker: all this froth is built on unconfirmed trade negotiations with China. Not signed. Not started. Barely whispered.

Markets are gambling that diplomacy will prevail. But if those talks stall or implode—and let's face it, with this administration, anything is possible—then this house of cards starts wobbling fast.

"We’re not trading on earnings, rates, or reality—just rumors."

And yet, the rally has been robust enough to erase April’s tariff-related drop.

⚠️ The Risks Nobody’s Talking About

1. Fed Policy Turbulence: Trump is again toying with removing Powell. Market likes low rates, not chaos.

2. Breadth Worries: Industrials, tech, and consumer cyclicals are carrying the rally. Defensive sectors are sitting this one out.

3. Sunday Dip: On May 4, futures dipped. By Monday, the Dow had dropped 98 points. Is this the first crack?

🔢 Hal’s Forward Watchlist (May 5–9)

• China Talks: Confirmation or collapse. Either way, it’ll shape the week.

• WTI Oil Report (May 7): If oil dips again, look out below.

• Sector Rotation: Will utilities and staples finally get a look-in?

• Trump Tweets: One misspelled threat could flip the market.

🔮 Hal Thinks

This isn’t just a rally. It’s a rapture. A market-wide hallucination wrapped in algorithmic optimism. When oil collapses, diplomacy hangs by a tweet, and the Fed chair's job is on the line—and still equities soar?

That’s not resilience.

That’s denial.

But denial rallies can run far longer than logic allows. So for now, hold your stops tight, let the bots play, and remember: when the music stops, someone always gets caught holding Tesla at $400.

Just don’t let it be you.

🔖 Stay tuned. Hal Thinks will be watching.