Equities have clawed back to record highs after a V‑shaped bounce from the Iran‑driven oil shock, leaving investors torn between two tail risks. On the upside, an unrelenting AI and semiconductor rally fuels call‑option buying, while rising energy prices threaten to erode gains. Megacap tech earnings and the Fed’s policy meeting barely dented market zeal, prompting many to hedge with puts.

Lombard Odier’s macro chief Florian Ielpo notes that despite Brent spiking to its highest level since 2022, U.S. stocks have largely ignored the shock, buoyed by strong earnings momentum. Europe, however, remains vulnerable; higher oil, gas disruptions and a stalled Strait of Hormuz keep implied volatility above realized levels in the Euro Stoxx 50 options market, as traders price in potential supply disruptions through late summer.

Dealers stay short gamma on the Euro Stoxx 50, exposing the index to gap risk both ways if the Iran conflict escalates or the strait reopens. Nvidia’s May 20 earnings loom as the next catalyst capable of shaking the tech‑driven rally that has propelled the Nasdaq 100. With macro headwinds persisting, oil‑price pressure remains the primary brake on further equity gains.