Looking at the S&P 500 and the Nasdaq performance, and the fact that even the SpaceX IPO plans are still moving ahead, it might seem like the geopolitical noise has faded and everything is back to normal. But in reality, nothing has materially changed over the past couple of weeks. Talks lead to nothing, and the Strait of Hormuz remains mostly closed.

As for this apparent indifference to negative news, investors seem to be following a strategy of buying every dip, hoping for more “TACOs” from the U.S. president, as has been happening lately, with delays in escalation in favor of so-called negotiations.

At the same time, confidence is bolstered by a strong earnings season. So far, more than 80% of companies have beaten expectations, with first-quarter earnings growth of around 16%.

Even Tesla, for which expectations were quite low, managed to surprise on the upside: $22.39 billion in revenue, up 15.8% year over year, earnings per share of $0.41 versus the expected $0.36, improved energy margins, and a solid outlook for deliveries. Still, the company’s plan to increase capex to $25 billion in 2026, nearly triple the $8.5 billion it spent in 2025, pushed the stock down.

As for this week’s Microsoft, Amazon, Alphabet, and Meta reports, investors already expect solid numbers. The thing is that beating estimates alone may not cut it anymore. Markets want to see real traction: stronger cloud growth, tangible AI monetization, and, above all, profitability. Any hint of rising costs could trigger a negative reaction. Given their outsized weight in the indices, weakness here could easily spill over into the broader market.

Now, even if earnings don’t disappoint, the market still needs fresh catalysts to keep pushing higher, and those are in short supply right now.

On central banks, for example, expectations are muted at best. Neither the ECB nor the Bank of England is likely to deliver anything dovish. Persistent inflation risks, largely tied to the ongoing energy situation, limit their room to maneuver. If anything, further tightening remains a possibility.

The Fed is not in a much better position. Inflation is picking up again, so no major policy shifts are expected in the near term. Jerome Powell, potentially heading into his final stretch as Fed Chair, is also unlikely to sound particularly dovish. As for a possible successor like Kevin Warsh, even if he leans toward a rate cut, it would not make much difference without broader support, since decisions ultimately come down to a vote.