ORLANDO, Florida, May 4 (Reuters) - Oil prices jumped

further above the $100-a-barrel mark on Monday as Iran controls

the Strait of Hormuz, despite U.S. efforts to free up shipping,

pushing U.S. Treasury yields higher and dragging stocks lower.

In my column today, I look at U.S. inflation and why

consumers, businesses and investors should brace for 4%.

Inflation has been above the Fed's 2% target for so long

already, and the energy shock will only drive it higher in the

months ahead.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. Most Strait of Hormuz shipping at a standstill

despite latest US pledge

2. Iran hits ships and UAE oil port in show of force

after Trump orders Navy to open strait

3. ANALYSIS-Investors are running out of time to brace

for true oil shock

4. Cerebras targets $26.6 billion valuation in US IPO as

AI chip demand surges

5. PREVIEW-US Treasury seen holding coupon sizes steady,

leaning on bills as tariff refunds loom

Today's Key Market Moves

* STOCKS: Asia ex-Japan +2.8%, best day in a month, led

by KOSPI's 5% surge to new highs. Europe -1%, worst day in a

month. Wall Street in the red, Dow -1%.

* SECTORS/SHARES: All 11 sectors in the S&P 500 fall

except energy, +0.9%. Materials -1.6%, industrials -1.2%.

GameStop -8.5% eBay +5%; UPS -10%, FedEx -9%. Micron Technology

+6%, Oracle +5%.

* FX: Yen slips back to 157/$, US-Iran war underpins

dollar. Indian rupee hits new low. Bitcoin briefly regains

$80,000 for first time since late January.

* BONDS: U.S. yields spike ~6bps across the curve. 2y

and 10y highest since late March; 30y above 5%, highest since

July.

* COMMODITIES/METALS: Oil spikes - Brent +5%, WTI +3%.

Gold -2%.

Today's Talking Points

* The only way is ... up?

If you thought AI capex forecasts couldn't go any higher,

think again. Analysts at Morgan Stanley and Goldman Sachs have

significantly revised up their outlooks, potentially raising the

stakes even higher for stock markets, energy and commodity

prices, inflation and interest rates.

Morgan Stanley's analysts now see the five major U.S.

hyperscalers' AI capex topping $800 billion this year and $1.1

trillion next year, while Goldman's team expect cumulative AI

infrastructure spend of $7.6 trillion by 2031. Eye-watering

sums, which investors are betting the house on.

* Bumper earnings

Not unrelated to the above, U.S. earnings expectations are

going through the roof. With the Q1 reporting season in full

swing, earnings are on track to rise 27.8% from a year ago,

according to Tajinder Dhillon at LSEG Data & Analytics. The

full-year 2026 growth forecast is 22.6%.

These are extraordinary numbers - the Q1 growth estimate has

virtually doubled in the space of a month, from 14.4% on April 1

- and would be the highest growth since late 2021. As ever the

question comes back to sustainability and whether the AI spend

will deliver the productivity gains and profits investors

expect.

* Taking one for the meme

There's been a flurry of proposed and actual multi-billion

dollar M&A activity in recent weeks, but nothing quite as

eye-opening as GameStop's ambitious $56 billion cash and stock

proposal for eBay.

The once stock market minnow that shot to fame during a

meme-stock frenzy five years ago taking over the online retailer

nearly four times its size has raised questions about GameStop's

funding. And if this deal fails, could eBay be a target for

someone else?

What could move markets tomorrow?

* Developments in the Middle East

* Energy market moves

* Australia interest rate decision

* Indonesia GDP (Q1)

* Hong Kong GDP (Q1, advance)

* Bank of England deputy governor Sam Woods speaks

* European Central Bank officials scheduled to speak include

President Christine Lagarde and board member Philip Lane

* Canada trade (March)

* U.S. 'JOLTS' job openings (March)

* U.S. trade (March)

* U.S. PMI (April, final)

* U.S. services ISM (April)

* U.S. Federal Reserve officials scheduled to speak include

Governor Michael Barr and Vice Chair for Supervision Michelle

Bowman

* U.S. earnings include AMD, Arista Networks, Pfizer, KKR

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