Strong Earnings and AI Optimism Push the S&P 500 and Nasdaq 100 to Record Highs

The S&P 500 Index ($SPX) (SPY) today is up +0.17%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.06%.  June E-mini S&P futures (ESM26) are up +0.19%, and June E-mini Nasdaq futures (NQM26) are up +0.05%.

Stock indexes are moving higher today, with the S&P 500 and Nasdaq 10 posting new all-time highs amid strong corporate earnings results and resurgent optimism around artificial intelligence.  Gains in stocks are limited today amid rising oil prices and bond yields after the US and Iran failed to reach terms to end the war in the Middle East. Global bond yields rose on concern that the continued standoff will keep energy prices elevated and could force the world’s central banks to tighten monetary policy.  The 10-year T-note yield is up +3 bp to 4.39%. 

In the latest developments in the Middle East, President Trump and Iran rejected each other's latest peace proposals to end the 10-week conflict.  Iran offered to transfer some of its stockpile of highly enriched uranium to a third country but rejected the idea of dismantling its nuclear facilities.  Iran also demanded a lifting of the US naval blockade and sanctions relief, while maintaining a degree of control over traffic through the Strait of Hormuz.  Despite the ceasefire in place since last month, a drone strike over the weekend set a cargo vessel ablaze off Qatar in the Persian Gulf.  Also, the United Arab Emirates and Kuwait both said they intercepted hostile drones.

Chinese trade news was better than expected, a positive factor for global growth.  China Apr exports rose +14.1% y/y, stronger than expectations of +8.4% y/y.  Apr imports rose +25.3% y/y, stronger than expectations of 20.0% y/y.

WTI crude oil prices (CLM26) are up by more than 2% today, as optimism that the US and Iran would reopen the Strait of Hormuz was dashed after President Trump said Iran's latest peace proposals were "totally unacceptable."  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 5% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.

Earnings reports thus far in this reporting season have been supportive of stocks.  As of today, 83% of the 446 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 is down -0.28%.  China's Shanghai Composite rallied to a 10-year high and closed up +1.08%.  Japan's Nikkei Stock Average fell from a record high and closed down -0.47%.

Interest Rates

June 10-year T-notes (ZNM6) today are down -5 ticks.  The 10-year T-note yield is up +2.7 bp to 4.381%.  T-notes are under pressure today from a +2% jump in WTI crude oil prices, which is boosting inflation expectations.  Also, supply pressures are weighing on T-notes as the Treasury will auction $125 billion of T-notes and T-bonds in this week’s quarterly refunding, beginning with today’s $58 billion auction of 3-year T-notes.  

European government bond yields are moving higher today.  The 10-year German Bund yield is up +2.5 bp to 3.030%.  The 10-year UK gilt yield is up +7.4 bp to 4.986%.

ECB Governing Council member Martin Kocher said, "If the situation around energy prices does not improve significantly, an interest rate hike will be unavoidable in the near future."

Swaps are discounting an 84% 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 climbing today amid continued optimism over AI infrastructure build-outs.  Qualcomm (QCOM) is up more than +6% to lead gainers in the Nasdaq 100, and Micron Technology (MU) is up more than +5%.  Also, Western Digital (WDC) is up by more than +4%, and Intel (INTC) and Seagate Technology Holdings Plc (STX) are up more than +3%.  In addition, Texas Instruments (TXN) is up by more than +2%, and Nvidia (NVDA), Applied Materials (AMAT), and Lam Research (LRCX) are up more than +1%.

Mining stocks are moving higher today with rallies in gold, silver, and copper prices.  Barrick Mining (B) is up more than +8%, and Coeur Mining (CDE) and Hecla Mining (HL) are up more than +7%. Also, Freeport McMoRan (FCX) is up more than +4%, and Anglogold Ashanti (AU), Southern Copper (SCCO), and Newmont Corp (NEM) are up more than +3%. 

Airline stocks and cruise line operators are under pressure today from a +2% increase in WTI crude oil prices, which boosts fuel costs and undercuts the companies' profitability prospects.  Carnival (CCL) and Royal Caribbean Cruises Ltd (RCL) are down more than -4%, and Alaska Air Group (ALK) is down more than -3%.  Also, American Airlines Group (AAL) and Norwegian Cruise Line Holdings (NCLH) are down more than -2%.  In addition, United Airlines Holdings (UAL), Southwest Airlines (LUV), and Delta Air Lines (DAL) are down more than -1%. 

Beazer Homes USA Inc (BZH) is up more than +29% on a report that said Dream Finders Homes is close to announcing a $704 million offer to acquire the company. 

Babcock & Wilcox (BW) is up more than +18% after reporting Q1 revenue grew 44% year-over-year, and that Q1 Ebitda nearly quadrupled. 

Monday.com (MNDY) is up more than +11% after reporting Q1 adjusted EP of $1.15, better than the consensus of 93 cents, and raising its full-year revenue forecast to $1.466 billion to $1.474 billion from a previous forecast of $1.45 billion to $1.46 billion, better than the consensus of $1.46 billion.

Moderna (MRNA) is up more than +7% after announcing it’s researching vaccines to protect against hantaviruses.

Lumentum Holdings (LITE) is up more than +6% after Nasdaq announced that the stock will replace CoStar Group in the Nasdaq 100 before the market opens on Monday, May 18. 

Trade Desk (TTD) is down more than -9% to lead losers in the S&P 500 after HSBC downgraded the stock to reduce from hold with a price target of $20.

Iren Ltd (IREN) is down more than -7% after announcing that it intends to offer $2 billion of convertible senior notes due 2033 in a private offering. 

Dell Technologies (DELL) is down more than -5% after UBS downgraded the stock to neutral from buy. 

Wendy’s (WEN) is down more than -3% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $6.

Tyler Technologies (TYL) is down more than -3% after announcing that it intends to offer $1 billion of convertible senior notes due 2031 in a private offering. 

Mosaic (MOS) is down more than -2% after forecasting Q2 phosphate sales of 1.4 million to 1.7 million tons, weaker than the consensus of 1.78 million tons. 

Earnings Reports(5/11/2026)

AECOM (ACM), Amentum Holdings Inc (AMTM), AST SpaceMobile Inc (ASTS), Certara Inc (CERT), Circle Internet Group Inc (CRCL), Constellation Energy Corp (CEG), Figure Technology Solutions Inc (FIGR), Fox Corp (FOXA), Halozyme Therapeutics Inc (HALO), Mosaic Co/The (MOS), Ovintiv Inc (OVV), Simon Property Group Inc (SPG), STERIS PLC (STE), ZoomInfo Technologies Inc (GTM).