Good morning! The weekend clearly did the stock market some good. Optimistic news about the Iran conflict deescalating into a potential deal gave investors hope that put last week's tech earnings in a rosy light.

Big Tech's roar (see below) carried the S&P 500 (^GSPC) up 1.5%, the Nasdaq (^IXIC) 2.1%, and the Dow (^DJI) 1.3%.

What we're watching Tuesday: SpaceX (SPCX) is set to report for the first time as a public company as its stock hits a new low. Sharing the stage as Tuesday's headliner, AMD (AMD) will open its books, along with Toyota Motor Corporation (TM), Spotify (SPOT), McDonald's (MCD), and many more.

Jobs week kicks off with June's Job Openings and Labor Turnover Survey for a closer look at both employer and employee sentiment.

Yahoo Finance Morning Brief is written by Ethan Wolff-Mann.

See what else is trending on Yahoo Finance.

With a few days of consideration — including a weekend — something of a consensus has emerged in markets about the Big Tech quarterly results we all just witnessed.

Despite the wobbles from Meta and Google, the mood is bullish, following the vibes for AI success set by Microsoft and Amazon. And that tide they've made has raised all boats.

Just look at Monday's hyperscaler performance: Microsoft (MSFT) closed 4.9% up, Amazon (AMZN) 4.6%, Google (GOOG) 4.4%, Meta (META) 6.1%, and even Oracle (ORCL) jumped 9.6%, though it's still down over 27% year to date.

Clearly, hope for the Iran conflict is allowing better moods and optimistic tendencies to prevail over a flight to safety. (To wit, Apple stock fell 1.8%.)

But as we've passed the crux of earnings season, the hyperscalers have essentially also passed their own key test until Nvidia's earnings or some other confidence-shaking event sparks a reappraisal. Their spending has been roughly deemed "acceptable." For now, anyway.

As if a metaphor for the moment, Nvidia reclaimed its title over Apple as the world's most valuable company, hitting the $5 trillion mark once again.

Traders a few days ago at the NYSE. (Michael M. Santiago/Getty Images)

If the takeaway following Big Tech's earnings season is a big thumbs-up (Monday's consensus), it's worth reading just a bit further into that report card for three things that investors are considering beyond the broader market context (Iran, Fed, inflation, consumer, etc.).

Last week's big star was a key Wall Street metric that only sometimes gets highlighted: free cash flow.

With so much money flowing into these tech titans, the inflow-to-outflow ratio has long been (very) positive. But massive hyperscaler capital spending has eaten through that, pushing some old stalwarts like Google into negative territory.

If this wasn't a key figure before, it really is now and will be squarely on investors' minds.

The second thing: the justification. The reason they can spend that much is that a $2.3 trillion demand is there. That's the current backlog (and growing) across the top four cloud providers, and it's sending a clear signal: The compute will be used — and monetized.

The last thing is that though stocks may be up, multiples are down, signaling that investors are realizing there are more than just a handful of tech companies to invest in.

As Goldman's Peter Oppenheimer noted, investors really aren't paying a premium for the top five stocks, adding that "it also marks a very big change from the dot.com era."

The man at the heart of the Citadel, Ken Griffin. (Photo by Michael M. Santiago/Getty Images)

Citadel Securities has emerged in both the news and internet meme world as the financial master that has capitalized on the misfortune (and possible hubris) of AI expert but investment novice Leopold Aschenbrenner. 

And that the firm is not just any Wall Street hedge fund but Ken Griffin's hedge fund is even more seasoning for the narrative that this guy can see around corners.

So then, what are they seeing?

Well, one report from the firm says it's forecasting a $500 billion wave of debt that'll come as Big Tech realizes it is still famished for data center chips.

As one analyst put it, "this has the potential to become one of the largest new sectors in investment-grade credit" with an "unprecedented" scale.

This means a few things. First of all, a debt binge to invest in. But perhaps more importantly, this is Citadel calling its shot and saying the AI cash burn that underpins all these companies' plans isn't just not going anywhere, it's going to burn even hotter.

(Michael M. Santiago/Getty Images)

While Citadel has been in the news lately, so has the other company in what may be the firm's biggest trade, immortalized in "Dumb Money." (Citadel lent Melvin Capital $2 billion after Melvin found itself short-squeezed.)

After its stock fell 12% on Monday, GameStop (GME) stock hit its lowest level since August 2024, according to our AlphaSpace data.

The drop came after the company announced it would swap convertible notes for common stock to pay down debt without cash. Investors, unhappy with any dilution of their ownership, acted accordingly.

Monday's move came about a month after the company tried to buy eBay (that was truly quite something...), a big swing that shook some investors' credibility in CEO Ryan Cohen, the impressive founder of Chewy, who had been seen as GameStop's savior.

One investor whose credibility was shaken enough to sell his entire position: Mr. Big Short, Michael Burry.