Stocks Climb on Strong Earnings and Crude Oil Weakness

The S&P 500 Index ($SPX) (SPY) today is up +0.62%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.10%.  June E-mini S&P futures (ESM26) are up +0.43%, and June E-mini Nasdaq futures (NQM26) are up +0.71%.

Stock indexes are rising today, with the S&P 500 and Nasdaq 100 posting new all-time highs and the Dow Jones Industrials posting a 2.5-month high. The broader market is finding support today from Apple, which is up more than +4% after forecasting stronger-than-expected revenue for Q2.  Also, Atlassian is up more than +20% to lead software stocks higher after reporting stronger-than-expected Q3 revenue.  Stocks added to their gains today after crude oil prices plunged, temporarily easing inflation concerns. 

Stocks fell from their best levels on a slightly negative Apr ISM report. The Apr ISM manufacturing index was unchanged at 52.7, weaker than expectations of an increase to 53.2.  Also, the Apr ISM prices paid sub-index rose +6.3 to a 4-year high of 84.6, above expectations of 80.3.

WTI crude oil prices (CLM26) gave up an early advance today and are down sharply by more than -3% after Axios reported that Iran delivered its response to the latest US amendments on the agreement to end the war.  Crude prices initially moved higher today after President Trump said he was sticking with a naval blockade of Iran, and Iran’s Supreme Leader, Mojtaba Khamenei, vowed not to give up Iran’s nuclear or missile technologies and said Iran would keep control of the Strait of Hormuz. 

The Strait of Hormuz remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.

The markets are discounting an 8% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.

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, 81% of the 303 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 higher today.  The Euro Stoxx 50 and China's Shanghai Composite did not trade, with markets in Europe and China closed for the Labor Day holiday.  Japan's Nikkei Stock Average closed up +0.38%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +6 ticks.  The 10-year T-note yield is down -0.4 bp to 4.366%.  T-notes are moving higher today after WTI crude oil prices fell more than -3%, easing inflation expectations.  Also, today’s weaker-than-expected Apr ISM manufacturing report was bullish for T-notes. 

Gains in T-notes are limited after the Apr ISM prices paid sub-index rose more than expected to a 4-year high, signaling mounting price pressures, a hawkish factor for Fed policy.  Also, rising inflation expectations are negative for T-notes, as the 10-year breakeven inflation rate rose to a 14.5-month high of 2.50% today.  In addition, today’s rally in the S&P 500 to a new record high has reduced safe-haven demand for T-notes. 

European government bond yields are mixed today.  The 10-year German bund yield did not trade with European markets closed for the Labor Day holiday.  The 10-year UK gilt yield is down -5.2 bp to 4.960%.

ECB Governing Council member and Bundesbank President Joachim Nagel said the ECB will need to increase interest rates in June if "the inflation outlook does not improve markedly."

Swaps are discounting an 89% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Apple (AAPL) is up more than +4% to lead gainers in the Dow Jones Industrials after reporting Q2 revenue of $111.18 billion, better than the consensus of $109.66 billion, and forecasting Q3 revenue up +14% to +17%, well above the consensus of +9.1%. 

Atlassian (TEAM) is up more than +20% to lead software stocks higher after reporting Q3 revenue of $1.79 billion, stronger than the consensus of $1.69 billion.  Also, Oracle (ORCL) is up more than +5%, and Datadog (DDOG) is up more than +4%.  In addition, Salesforce (CRM) is up more than +2%, and Microsoft (MSFT), Workday (WDAY), ServiceNow (NOW), Autodesk (ADSK), and Intuit (INTU) are up more than +1%.

Cryptocurrency-exposed stocks are moving higher today, with Bitcoin (^BTCUSD) up more than +2%.  Riot Platforms (RIOT) is up more than +11%, and Strategy (MSTR) is up more than +7% to lead gainers in the Nasdaq 100.  Also, Galaxy Digital Holdings (GLXY) is up more than +5%, Coinbase Global (COIN) is up more than +3%, and MARA Holdings (MARA) is up more than +1%.

AI-infrastructure stocks are lower today after SanDisk reported Q3 results that beat expectations, but analysts said the results may not have been strong enough to meet high investor expectations.   As a result, Qualcomm (QCOM) and Western Digital (WDC) are down more than -3%, and KLA Corp (KLAC), NXP Semiconductors NV (NXPI), Analog Devices (ADI), Marvell Technology (MRVL), and Lam Research (LRCX) are down more than -1%.

Twilio (TWLO) is up more than +16% after reporting Q1 revenue of $1.41 billion, above the consensus of $1.34 billion, and raising its full-year organic revenue forecast to up +9.5% to +10.5% from a previous estimate of +8% to +9%, stronger than the consensus of +8.7%. 

Reddit (RDDT) is up more than +11% after reporting Q2 adjusted Ebitda of $266.0 million, above the consensus of $221.3 million.

Paramount Skydance Corp (PSKY) is up more than +9% to lead gainers in the S&P 500 after Morgan Stanley double-upgraded the stock to overweight from underweight with a price target of $14.

Veeva Systems (VEEV) is up more than +9% after S&P Dow Jones Indices said the company will replace Coterra Energy in the S&P 500, beginning with the start of trading on Thursday, May 7.

Estee Lauder (EL) is up more than +6% after reporting Q3 net sales of $3.71 billion, better than the consensus of $3.69 billion, and raising its full-year organic net sales forecast to +3% from a prior view of +1% to +3%, stronger than the consensus of +2.84%.

Roblox (RBLX) is down by more than -16% after reporting Q1 daily active users of 132 million, below the consensus of 143.8 million.

Clorox (CLX) is down more than -9% to lead losers in the S&P 500 after cutting its full-year adjusted EPS forecast to $5.45 to $5.65 from a previous forecast of $5.95 to $6.30, weaker than the consensus of $5.92. 

Amgen (AMGN) is down more than -4% to lead losers in the Dow Jones Industrials and Nasdaq 100 after reporting Q1 product sales of $8.22 billion, below the consensus of $8.23 billion. 

ResMed (RMD) is down more than -4% after reporting Q3 constant currency growth of +7.9% y/y, below the consensus of +8.3% y/y.

Stryker (SYK) is down more than -3% after reporting Q1 net sales of $6.02 billion, weaker than the consensus of $6.33 billion.

Earnings Reports(5/1/2026)

AES Corp/The (AES), Affiliated Managers Group Inc (AMG), Aon PLC (AON), Ares Management Corp (ARES), AutoNation Inc (AN), Brookfield Renewable Corp (BEPC), Cboe Global Markets Inc (CBOE), Chevron Corp (CVX), Church & Dwight Co Inc (CHD), Colgate-Palmolive Co (CL), Dominion Energy Inc (D), Estee Lauder Cos Inc/The (EL), Exxon Mobil Corp (XOM), Federal Realty Investment Trust (FRT), Gates Industrial Corp PLC (GTES), HF Sinclair Corp (DINO), Lazard Inc (LAZ), Lear Corp (LEA), Liberty Global Ltd (LBTYA), Linde PLC (LIN), LyondellBasell Industries NV (LYB), Madison Square Garden Sports Corp (MSGS), Moderna Inc (MRNA), Newell Brands Inc (NWL), nVent Electric PLC (NVT), OneMain Holdings Inc (OMF), Summit Therapeutics Inc (SMMT), TPG Inc (TPG).