Stocks Pressured as Soaring Crude Prices Raise Inflation Concerns

The S&P 500 Index ($SPX) (SPY) today is down -0.19%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.57%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.20%.  June E-mini S&P futures (ESM26) are down -0.15%, and June E-mini Nasdaq futures (NQM26) are up +0.21%.

Stock indexes are mixed today.  Soaring crude oil prices are lifting inflation expectations and bond yields and are negative for stocks.  WTI crude oil climbed to a 2-week high today after the US signaled it will maintain its naval blockade of Iran for the foreseeable future.  The Wall Street Journal reported that President Trump told his aides to prepare for an extended blockade and that it carries less of a risk for the US than resuming hostilities or walking away from the conflict without securing a deal that curbs Iran’s nuclear activities.  The 10-year T-note yield is up +5 bp to a 4-week high of 4.40%.

The Nasdaq 100 is higher today as technology stocks climb on signs that demand for AI infrastructure remains strong.  NXP Semiconductors NV and Seagate Technology Holdings Plc are up more than +10% to lead chipmakers and AI infrastructure stocks higher after reporting stronger-than-expected earnings results. The markets are awaiting earnings from four of the Magnificent Seven technology stocks after the close today, as Alphabet, Amazon, Microsoft, and Meta Platforms will report quarterly results.

Today’s US housing starts and core capital goods new orders reports were better than expected, a supportive factor for stocks.

US MBA mortgage applications fell -1.6% in the week ended April 24, with the purchase mortgage sub-index up +1.2% and the refinancing sub-index down -4.4%.  The average 30-year fixed rate mortgage rose by +2 bp to 6.37% from 6.35% in the prior week.

US Mar housing starts unexpectedly rose +10.8% m/m to a 15-month high of 1.502 million, stronger than expectations of a decline to 1.380 million. Mar building permits, a proxy for future construction, fell -10.8% m/m to a 7-month low of 1.372 million, weaker than expectations of 1.390 million.

US Mar capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +3.3% m/m, stronger than expectations of +0.5% m/m and the largest increase in 5.75 years.

WTI crude oil prices (CLM26) are up by more than +4% today as the US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire.  The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis, as flows of crude, natural gas, and oil products from the Persian Gulf have been cut off since the war began in late February.  The ongoing blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait.  Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, or more than 50%, so far in April, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June.

The 2-day FOMC meeting concludes this afternoon, and the Fed is expected to keep monetary policy unchanged.  The markets will look to Fed Chair Powell's post-meeting comments for guidance on the future direction of Fed policy.  Today’s FOMC meeting is the last for Mr. Powell as Fed Chair, as his term expires on May 15. 

Kevin Warsh now appears to be on a glide path toward Senate approval as the new Fed Chair after Senator Thom Tillis said on Sunday that he dropped his opposition to the nomination.  Mr. Tillis dropped his opposition after the US Justice Department dropped its criminal investigation into the Fed’s overspending on the renovation of its building, in line with Mr. Tillis’ demand.  Mr. Tillis views the investigation into Fed Chair Powell as an attempt to force the Fed to cut interest rates.  The Senate Banking Committee is due to vote on Mr. Warsh’s appointment today and then send the nomination to the full Senate for a vote.

The markets are discounting a 0% chance for a +25 bp FOMC rate hike at the Tue-Wed policy meeting.  The markets are expecting the FOMC to leave policy unchanged this week as it awaits further developments in oil prices and inflation.

Earnings season ramps up this week with several Magnificent Seven technology stocks reporting.  Earnings results thus far have been supportive of stocks.  As of today, 80% of the 199 S&P 500 companies that reported Q1 earnings have beaten estimates.  Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence.  Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.

Overseas stock markets are mixed today.  The Euro Stoxx 50 fell to a 3-week low and is down -0.12%.  China's Shanghai Composite closed up +0.71%.  Japan's Nikkei Stock 225 did not trade with markets closed in Japan for the Showa Day holiday.

Interest Rates

June 10-year T-notes (ZNM6) today are down -10 ticks.  The 10-year T-note yield is up +3.8 bp to 4.384%.  Jun T-notes fell to a 4-week low, and the 10-year T-note yield rose to a 4-week high of 4.400%.  T-notes are under pressure today amid rising crude oil prices, with WTI up more than +4% to a 2-week high, boosting inflation expectations.  T-notes extended their losses, and US Mar housing starts and Mar core capital goods new orders rose more than expected, a hawkish factor for Fed policy. 

European government bond yields are moving higher today.  The 10-year German bund yield rose to a 2-week high of 3.093% and is up +2.0 bp to 3.087%.  The 10-year UK gilt yield climbed to a 1-month high of 5.031% and is up +2.2 bp to 5.028%.

Eurozone Apr economic confidence fell -3.2 to a nearly 5.5-year low of 93.0, weaker than expectations of 95.1.

Eurozone Mar M3 money supply rose +3.2% y/y, stronger than expectations of +3.1% y/y.

Swaps are discounting an 11% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.

US Stock Movers

NXP Semiconductors NV (NXPI) is up more than +23% to lead chipmakers and AI infrastructure stocks higher after forecasting Q2 revenue of $3.35 billion to $3.55 billion, stronger than the consensus of $3.27 billion.  Seagate Technology Holdings Plc (STX) is up +16% after forecasting Q4 adjusted EPS of $4.80 to $5.20, well above the consensus of $3.96.  Also, Western Digital (WDC) is up more than +12%, and Sandisk (SNDK) is up more than +9%.  In addition, Micron Technology (MU), Intel (INTC), and Microchip Technology (MCHP) are up more than +4%, and Marvell Technology (MRVL), Analog Devices (ADI), Qualcomm (QCOM), and Texas Instruments (TXN) are up more than +1%. 

Airlines and cruise line operators are under pressure today with WTI crude oil up more than +3% at a 2-week high.  United Airlines Holdings (UAL), Alaska Air Group (ALK), Carnival (CCL), and Norwegian Cruise Line Holdings (NCLH) are down more than -2%.  Also, American Airlines Group (AAL), Royal Caribbean Cruises (RCL), Delta Air Lines (DAL), and Southwest Airlines (LUV) are down more than -1%.

Bloom Energy (BE) is up more than +27% after boosting its full-year revenue forecast to $3.4 billion to $3.8 billion from a prior forecast of $3.1 billion to $3.3 billion, above the consensus of $3.25 billion.  

Rush Street Interactive (RSI) is up more than +14% after forecasting full-year revenue between $1.49 billion and $1.54 billion, better than the consensus of $1.38 billion. 

Generac Holdings (GNRC) is up more than +11% after reporting Q1 net sales of $1.06 billion, better than the consensus of $1.05 billion.

Visa (V) is up more than +9% to lead gainers in the Dow Jones Industrials after reporting Q2 net revenue of $11.23 billion, stronger than the consensus of $10.74 billion.

Starbucks (SBUX) is up more than +6% after reporting Q2 comparable sales were up +6.20%, well above the consensus of +3.65%, and raised its full-year comparable sales forecast to at least +5% from a prior view of at least +3%. 

Fair Isaac Corp (FICO) is up more than +4% after reporting Q2 revenue of $691.7 million, well above the consensus of $638.4 million. 

Teradyne (TER) is down more than -13% to lead losers in the S&P 500 after forecasting Q2 revenue of $1.15 billion to $1.25 billion, failing to exceed the consensus of $1.20 billion meaningfully. 

GE Healthcare (GEHC) is down more than -11% to lead losers in the Nasdaq 100 after cutting its full-year adjusted EPS forecast to $4.80 to $5.00 from a previous forecast of $4.95 to $5.15, weaker than the consensus of $5.06. 

Robinhood Markets (HOOD) is down more than -10% after reporting Q1 net revenue of $1.07 billion, below the consensus of $1.14 billion. 

Brown-Forman (BF.B) is down more than -9% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $23. 

Avis Budget Group (CAR) is down more than -7% after reporting a Q1 loss per share of $8.01, wider than the consensus of $6.87.

CoStar Group (CSGP) is down more than -5% after forecasting full-year revenue of $3.78 billion to $3.82 billion, the midpoint below the consensus of $3.81 billion. 

Ingersoll Rand (IR) is down more than -4% after forecasting full-year organic revenue to climb 0% to +2%, the midpoint below the consensus of +1.44%.

Earnings Reports(4/29/2026)

AbbVie Inc (ABBV), Aflac Inc (AFL), Align Technology Inc (ALGN), Allstate Corp/The (ALL), Alphabet Inc (GOOGL), Amazon.com Inc (AMZN), American Water Works Co Inc (AWK), Amphenol Corp (APH), Automatic Data Processing Inc (ADP), Biogen Inc (BIIB), Bunge Global SA (BG), Carvana Co (CVNA), CH Robinson Worldwide Inc (CHRW), Chipotle Mexican Grill Inc (CMG), Cognizant Technology Solutions (CTSH), eBay Inc (EBAY), EMCOR Group Inc (EME), Entergy Corp (ETR), Equinix Inc (EQIX), Everest Group Ltd (EG), Ford Motor Co (F), Garmin Ltd (GRMN), GE HealthCare Technologies Inc (GEHC), Generac Holdings Inc (GNRC), General Dynamics Corp (GD), Humana Inc (HUM), IDEX Corp (IEX), Invitation Homes Inc (INVH), KLA Corp (KLAC), Lennox International Inc (LII), Meta Platforms Inc (META), MGM Resorts International (MGM), Microsoft Corp (MSFT), Mid-America Apartment Communities (MAA), Old Dominion Freight Line Inc (ODFL), O'Reilly Automotive Inc (ORLY), Phillips 66 (PSX), QUALCOMM Inc (QCOM), Regency Centers Corp (REG), Regeneron Pharmaceuticals Inc (REGN), SBA Communications Corp (SBAC), Stanley Black & Decker Inc (SWK), Tyler Technologies Inc (TYL), UDR Inc (UDR), Verisk Analytics Inc (VRSK), VICI Properties Inc (VICI), Vulcan Materials Co (VMC), 

Yum!  Brands Inc (YUM).