Stocks Mixed on Middle East Tensions and Solid Corporate Earnings

The S&P 500 Index ($SPX) (SPY) today is down -0.04%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.42%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.19%.  June E-mini S&P futures (ESM26) are down -0.05%, and June E-mini Nasdaq futures (NQM26) are up +0.15%.

Stock index futures gave up overnight gains and are trading mixed amid heightened tensions in the Strait of Hormuz.  WTI crude oil prices erased overnight losses and are up slightly on an unverified report that two missiles hit an American patrol boat after disregarding an Iranian warning to not enter the Strait of Hormuz.  However, stocks recovered, and crude prices fell from their best level after Axios reported that a senior US official said that Iranian missiles did not hit a US ship.

Stock index futures initially rose, and crude oil prices fell in overnight trade after President Trump said the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz.  US Central Command said it would provide military support, including guided-missile destroyers, aircraft, and drones, to ships transiting the strait.  Also, signs of corporate resilience are boosting stocks on optimism that AI investment will continue to fuel earnings growth. 

However, on Sunday, a tanker was hit by projectiles just north of Fujairah, United Arab Emirates, and Iran's FARS news agency claimed that two missiles had hit a US warship after it had ignored warnings.  Iran's military said that US forces would be attacked if they entered the Strait of Hormuz.

WTI crude oil prices (CLM26) recovered from early losses today and are up slightly after Iran claimed to have hit a US patrol boat entering the Strait of Hormuz.  However, US Central Command said no US ships have been struck.  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 a 3% 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 today, 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 are lower today.  The Euro Stoxx 50 is down -1.05%.  China's Shanghai Composite did not trade, with markets in China closed for the Labor Day holiday.  Japan's Nikkei Stock Average did not trade, with markets in Japan closed for the Greenery Day holiday.

Interest Rates

June 10-year T-notes (ZNM6) today are down by -6 ticks.  The 10-year T-note yield is up +3.5 bp to 4.405%.  T-notes are sliding today amid higher crude oil prices, which raise inflation expectations. The 10-year breakeven inflation rate climbed to a 14.5-month high of 2.518% today.

European government bond yields are moving higher today.  The 10-year German Bund yield is up +1.3 bp to 3.050%.  The 10-year UK gilt yield is not trading today, with markets in the UK closed for the May Day holiday.

The Eurozone May Sentix investor confidence index unexpectedly rose +2.8 to -16.4, stronger than expectations of a decline to -22.0.

ECB Governing Council member Peter Kazimir said an ECB rate hike in June is "all but inevitable amid a prolonged period of broad-based price increases coupled with visibly weaker growth across the Eurozone."

Swaps are discounting a 93% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Chipmakers and AI-infrastructure stocks are moving higher today to provide support to the broader market.  Micron Technology (MU) is up more than +5% to lead gainers in the Nasdaq 100, and SanDisk (SNDK) and Western Digital (WDC) are up more than +3%.  Also, Seagate Technology Holdings Plc (STX) is up more than +2%, and Nvidia (NVDA), Applied Materials (AMAT), KLA Corp (KLAC), and Lam Research (LRCX) are up more than +1%. 

Software stocks are stronger today, a positive factor for the overall market.  Atlassian (TEAM) and Oracle (ORCL) are up more than +4%, and Palantir Technologies is up more than +3%.  Also, Salesforce (CRM) is up more than +2% to lead gainers in the Dow Jones Industrials.  In addition, ServiceNow (NOW), Microsoft (MSFT), and Intuit (INTU) are up more than +1%.

Cryptocurrency-exposed stocks are climbing today, with Bitcoin (^BTCUSD) up more than +1% at a 3-month high.  Coinbase Global (COIN) is up more than +3%, and Galaxy Digital Holdings (GLXY) is up more than +2%.  Also, Strategy (MSTR) is up more than +1%, and MARA Holdings (MARA) is up +0.79%.

Norwegian Cruise Line Holdings (NCLH) is down more than -9% to lead losers in the S&P 500, and other cruise line operators are lower after cutting its full-year adjusted Ebitda forecast to $2.48 billion to $2.64 billion from a previous estimate of $2.95 billion, weaker than the consensus of $2.79 billion.  Carnival (CCL) and Royal Caribbean Cruises Ltd (RCL) are down more than -1=2%. 

Freight operators are sliding today after Amazon launched Amazon Supply Chain Services, expanding its freight, distribution, fulfillment, and parcel shipping solutions to businesses beyond its marketplace sellers.  GXO Logistics (GXO) is down more than -8%, and United Parcel Service (UPS) is down more than -7%.  Also, FedEx (FDX) and CH Robinson Worldwide (CHRW) are down more than -6%, and Old Dominion Freight Line (ODFL) is down more than -5%.  In addition, Expeditors International of Washington (EXPD) and JB Hunt Transport Services (JBHT) are down more than -4%.

GameStop (GME) is down more than -4% after offering to purchase EBay for $125 per share in a cash and stock deal.   

Prudential Financial (PRU) is down more than -1% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $92. 

Celcuity (CELC) is up more than +10% after its Phase 3 trial of gedatolisib plus fulvestrant in PIK3CA mutant breast cancer patients met its primary endpoint. 

EBay (EBAY) is up more than +6% after GameStop proposed to buy the company for about $56 billion in cash and stock. 

GlobalFoundries (GFS) is up more than +4% after Cantor Fitzgerald upgraded the stock to overweight from neutral with a price target of $80.

Amazon.com (AMZN) is up more than +1% after Fubon Securities upgraded the stock to buy from neutral with a price target of $320. 

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).