S&P 500 and Nasdaq 100 Post Record Highs on Solid Earnings

The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.29%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.31%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.94%.  June E-mini S&P futures (ESM26) rose +0.19%, and June E-mini Nasdaq futures (NQM26) rose +0.85%.

Stock indexes settled mostly higher on Friday, with the S&P 500 and Nasdaq 100 posting new all-time highs.  The broader market found support on Friday from Apple, which rose more than +3% after forecasting stronger-than-expected revenue for Q2. Also, Atlassian closed up more than +29% to lead software stocks higher after reporting stronger-than-expected Q3 revenue.  Stocks added to their gains on Friday 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.

Stocks were also pressured on Friday as trade tensions resurfaced, with President Trump threatening to raise tariffs on European automobile imports to as high as 25%, claiming the EU had failed to fully comply with a trade agreement negotiated with the US.

WTI crude oil prices (CLM26) gave up an early advance on Friday and closed down sharply by more than -3% on hopes that negotiations to end the US-Iran war will resume.  Iranian Foreign Minister Abbas Araghchi said Iran is ready to continue diplomatic efforts with the US if the Americans change their approach and avoid "excessive demand, threatening rhetoric, and provocative actions." Crude prices initially moved higher on Friday 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 results thus far this reporting season have been supportive of stocks.  As of Friday, 82% of the 317 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 settled higher on Friday.  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) on Friday closed up by +1.5 ticks.  The 10-year T-note yield rose +0.5 bp to 4.376%.  T-notes settled little changed on Friday and found support on the -3% plunge in crude oil prices, which eased inflation expectations.  Also, Friday’s weaker-than-expected Apr ISM manufacturing report was bullish for T-notes. 

Gains in T-notes were limited on Friday 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% on Friday.  In addition, Friday’s rally in the S&P 500 to a new record high reduced safe-haven demand for T-notes. 

European government bond yields were mixed on Friday.  The 10-year German Bund yield did not trade as European markets were closed for the Labor Day holiday.  The 10-year UK gilt yield fell -4.8 bp to 4.964%.

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) closed up more than +3% 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) closed up more than +29% to lead software stocks higher after reporting Q3 revenue of $1.79 billion, stronger than the consensus of $1.69 billion.  Also, Oracle (ORCL) and Datadog (DDOG) closed up more than +6%, and Salesforce (CRM) closed up more than +4% to lead gainers in the Dow Jones Industrials.  In addition, Autodesk (ADSK), ServiceNow (NOW), and Workday (WDAY) closed up more than +3%, and Microsoft (MSFT), Intuit (INTU), and Adobe Systems (ADBE) closed up more than +1%.

SanDisk (SNDK) closed up more than +8% to lead gainers in the Nasdaq 100 and AI-infrastructure stocks higher after reporting Q3 revenue of $5.95 billion, well above the consensus of $4.72 billion.  Also, Seagate Technology Holdings Plc (STX) closed up more than +7%, and Intel (INTC) closed up more than +5%.  In addition, Micron Technology (MU) closed up more than +4%, and Advanced Micro Devices (AMD) and Microchip Technology (MCHP) closed up more than +1%.

Cryptocurrency-exposed stocks moved higher on Friday as Bitcoin (^BTCUSD) rose more than +2%.  Strategy (MSTR) closed up more than +7%, and Riot Platforms (RIOT) closed up more than +6%.  Also, Galaxy Digital Holdings (GLXY) closed up more than +2%, and Coinbase Global (COIN) closed up more than +1%.

Twilio (TWLO) closed up more than +23% 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) closed up more than +12% after reporting Q2 adjusted Ebitda of $266.0 million, above the consensus of $221.3 million.

Veeva Systems (VEEV) closed 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.

Paramount Skydance Corp (PSKY) closed up more than +8% 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.

Estee Lauder (EL) closed up more than +3% 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) closed down by more than -18% after reporting Q1 daily active users of 132 million, below the consensus of 143.8 million.

Clorox (CLX) closed 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. 

Stryker (SYK) closed down more than -6% after reporting Q1 net sales of $6.02 billion, weaker than the consensus of $6.33 billion.

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

Alaska Air Group (ALK) closed down more than -1% after Citigroup double-downgraded the stock to sell from buy with a price target of $32, citing exposure to soaring fuel costs. 

Earnings Reports(5/4/2026)

Allison Transmission Holdings (ALSN), BioMarin Pharmaceutical Inc (BMRN), BWX Technologies Inc (BWXT), CNA Financial Corp (CNA), Corebridge Financial Inc (CRBG), Diamondback Energy Inc (FANG), Duolingo Inc (DUOL), Equitable Holdings Inc (EQH), IAC Inc (IAC), Inspire Medical Systems Inc (INSP), Lattice Semiconductor Corp (LSCC), Loews Corp (L), MSA Safety Inc (MSA), Norwegian Cruise Line Holdings (NCLH), ON Semiconductor Corp (ON), Palantir Technologies Inc (PLTR), Paramount Skydance Corp (PSKY), Pinnacle West Capital Corp (PNW), Pinterest Inc (PINS), RB Global Inc (RBA), Tyson Foods Inc (TSN), Vertex Pharmaceuticals Inc (VRTX), Viper Energy Inc (VNOM), Vornado Realty Trust (VNO), Williams Cos Inc/The (WMB).