Stocks Mixed Awaiting an Iran Update

The S&P 500 Index ($SPX) (SPY) today is down -0.05%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.20%.  June E-mini S&P futures (ESM26) are down -0.03%, and June E-mini Nasdaq futures (NQM26) are up +0.23%.

Stock indexes are mixed today, with the Nasdaq 100 posting a new all-time high.  Crude oil prices are down more than -4% today, supporting stocks and bonds as the markets await updates on a potential US-Iran peace deal that would reopen the Strait of Hormuz.  Better-than-expected corporate earnings results are also lifting stocks, powered by tech earnings and high expectations for artificial intelligence.  Strength in software stocks is leading the Nasdaq 100 higher as Datadog surged more than +30% after reporting blowout earnings.

Stocks also found support on today’s economic news that showed signs of a stable labor market, better-than-expected productivity, and weaker-than-expected labor costs.

US weekly initial unemployment claims rose +10,000 to 200,00, showing a stronger labor market than expectations of 205,000.  Weekly continuing claims unexpectedly fell -10,000 to a 2.25-year low of 1.766 million, showing a stronger labor market than expectations of an increase to 1.800 million.

US Q1 nonfarm productivity rose +0.8%, stronger than expectations of +0.6%.  Q1 unit labor costs rose +2.3%, weaker than expectations of +2.5%

The markets are awaiting further updates after the US presented a proposal to Iran that would gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports.  Negotiations over Iran's nuclear program would come later in the process. Iran is expected to respond via Pakistan in the next few days.

WTI crude oil prices (CLM26) are down by more than -4% today, but remain above Wednesday’s 2-week low, after a post from Al Arabiya, a Saudi-affiliated outlet, that said agreements were reached on easing the US naval blockade of Iran in exchange for a gradual reopening of the Strait of Hormuz.  The strait 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 6% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.

Earnings results thus far in this reporting season have been supportive of stocks.  As of today, 84% of the 411 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 climbed to a 2.5-week high and is up +0.29%. China's Shanghai Composite rallied to a 2-month high and closed up +0.08%.  Japan's Nikkei Stock Average soared to a record high, finishing sharply higher by +5.58%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +7 ticks.  The 10-year T-note yield is down -2.9 bp to 4.321%.  Jun T-notes climbed to a 1-week high today, and the 10-year T-note yield fell to a 1.5-week low of 4.319%.  T-notes have support today from weaker crude prices, which eases inflation expectations.  Also, today’s reports showing Q1 nonfarm productivity was better than expected, and Q1 labor costs were weaker than expected, were supportive for T-notes.

Gains in T-notes are limited due to today’s weekly jobless claims report, which showed strength in the US labor market, a hawkish factor for Fed policy.  Also, hawkish comments today from Boston Fed President Susan Collins were negative for T-notes, as she said interest rates should stay at current "mildly restrictive" levels.

European government bond yields are moving lower today.  The 10-year German Bund yield fell to a 2-week low of 2.960% and is down -3.8 bp to 2.961%.  The 10-year UK gilt yield fell to a 2-week low of 4.889% and is down -4.8 bp to 4.891%.

Eurozone Mar retail sales fell -0.1% m/m, a smaller decline than expectations of -0.3% m/m.

German Mar factory orders rose +5.0% m/m, stronger than expectations of +1.0% m/m.

Swaps are discounting a 79% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Datadog (DDOG) is up more than +30% to lead software stocks higher and gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $1.01 billion, better than the consensus of $957.8 million, and raising its full-year revenue estimate to $4.30 billion to $4.34 billion from a previous estimate of $4.06 billion to $4.10 billion, well above the consensus of $4.09 billion.  Also, ServiceNow (NOW) is up more than +5%, and Workday (WDAY) and Atlassian (TEAM) are up more than +4%.  In addition, Salesforce (CRM) is up more than +2% to lead gainers in the Dow Jones industrials, and Microsoft (MSFT), Autodesk (ADSK), Oracle (ORCL), and Intuit (INTU) are up more than +2%. 

Fortinet (FTNT) is up more than +23% to lead cybersecurity stocks higher after reporting Q1 billings of $2.09 billion, well above the consensus of $1.82 billion, and raising its full-year billings forecast to $8.80 billion to $9.10 billion from a previous forecast of $8.40 billion to $8.60 billion, stronger than the consensus of $8.49 billion.  Also, Zscaler (ZS) is up more than +9%, and Palo Alto Networks (PANW) is up more than +8%. In addition, CrowdStrike Holdings (CRWD) and Okta (OKTA) are up more than +6%, and Cloudflare (NET) is up more than +1%.

Energy producers and service providers are moving lower today with WTI crude oil prices down more than -4%. APA Corp (APA) is down more than -5%, and Baker Hughes (BKR) is down more than -4%.  Also, Devon Energy (DVN), Diamondback Energy (FANG), and SLB Ltd (SLB) are down more than -3%, and ConocoPhillips (COP), Occidental Petroleum (OXY), Halliburton (HAL), Marathon Petroleum (MPC), and Valero Energy (VLO) are down more than -2%. 

Albemarle (ALB) is up more than +13% after reporting Q1 net sales of $1.43 billion, above the consensus of $1.34 billion. 

Howmet Aerospace (HWM) is up more than +7% after reporting Q1 adjusted EPS of $1.22, above the consensus of $1.11, and raising its full-year adjusted EPS forecast to $4.88-$5.00 from a previous forecast of $4.35-$4.55, stronger than the consensus of $4.63. 

Ormat Technologies (ORA) is up more than +6% after reporting Q1 adjusted EPS of $1.30, stronger than the consensus of 92 cents.

MKS Inc. (MKSI) is up more than +6% after reporting Q1 net revenue of $1.08 billion, better than the consensus of $1.04 billion. 

DoorDash (DASH) is up more than +3% after reporting Q1 gross order value of $32.4 billion, above the consensus of $31.21 billion. 

Zoetis (ZTS) is down more than -21% to lead losers in the S&P 500 after reporting Q1 revenue of $2.26 billion, weaker than the consensus of $2.30 billion.

Insmed (INSM) is down more than -13% to lead losers in the Nasdaq 100 after forecasting full-year product revenue of $1.0 billion, below the consensus of $1.3 billion.

Whirlpool (WHR) is down more than -13% after reporting Q1 net sales of $3.27 billion, weaker than the consensus of $3.42 billion, and cutting its full-year revenue forecast to $15.0 billion from a previous forecast of $15.3-$15.6 billion, below the consensus of $15.21 billion. 

US Foods Holding (USFD) is down more than -7% after reporting Q1 net sales of $9.61 billion, below the consensus of $9.66 billion.

ARM Holdings Plc (ARM) is down more than -6% after reporting Q4 royalty revenue of $671 million, below the consensus of $693.3 million.

Coherent Corp (COHR) is down more than -6% after reporting a Q3 adjusted EPS of $1.41, right on expectations. 

Earnings Reports(5/7/2026)

Airbnb Inc (ABNB), Akamai Technologies Inc (AKAM), Becton Dickinson & Co (BDX), Block Inc (XYZ), Charles River Laboratories Int (CRL), Coinbase Global Inc (COIN), Consolidated Edison Inc (ED), Corpay Inc (CPAY), Datadog Inc (DDOG), EPAM Systems Inc (EPAM), Evergy Inc (EVRG), Expedia Group Inc (EXPE), Gen Digital Inc (GEN), Gilead Sciences Inc (GILD), Howmet Aerospace Inc (HWM), Kenvue Inc (KVUE), McDonald's Corp (MCD), McKesson Corp (MCK), Mettler-Toledo International Inc (MTD), Microchip Technology Inc (MCHP), Monster Beverage Corp (MNST), Motorola Solutions Inc (MSI), News Corp (NWSA), Republic Services Inc (RSG), Sempra (SRE), Tapestry Inc (TPR), Targa Resources Corp (TRGP), Trade Desk Inc/The (TTD), Viatris Inc (VTRS), Vistra Corp (VST), WW Grainger Inc (GWW), Wynn Resorts Ltd (WYNN), Zoetis Inc (ZTS).