Stocks Slide as Inflation Fears Lift Bond Yields

The S&P 500 Index ($SPX) (SPY) today is down -0.91%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.83%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.30%.  June E-mini S&P futures (ESM26) are down -1.02%, and June E-mini Nasdaq futures (NQM26) are down -1.41%.

Stock indexes are falling sharply, weighed down by a broad selloff in global bond markets amid soaring crude oil prices that are fueling inflation fears.  Doubts over whether oil supplies from the Middle East will normalize anytime soon have pushed WTI to a 1.5-week high today, as peace talks between the US and Iran remain in limbo and the Strait of Hormuz remains closed.  The soaring crude prices are sending bond yields spiking globally, with the Japanese 10-year JGB bond yield jumping to a 29-year high, the 10-year UK Gilt yield surging to an 18-year high, the 10-year German bund yield rising to a 15-year high, and the 10-year T-note yield climbing to an 11.75-month high of 4.58%. 

Stock indexes extended their losses today after bond yields climbed further on hawkish US economic news showing the May Empire manufacturing survey general business conditions unexpectedly rose +8.6 to a 4-year high of 19.6, stronger than expectations of a decline to 7.2.  Also, Apr manufacturing production rose by +0.6% m/m, stronger than expectations of +0.2% m/m and the largest increase in 14 months.

WTI crude oil prices (CLM26) are up sharply by more than 3% today, at a 1.5-week high, as talks to end the Iran war remain in limbo.  The Strait of Hormuz remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait.  On Wednesday, the International Energy Agency (IEA) said in a monthly report that global oil inventories declined at a rate of about 4 million bpd in March and April, and the market will remain “severely undersupplied” until October even if the conflict ends next month.  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 reports thus far in this reporting season have been supportive of stocks.  As of today, 83% of the 454 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 sharply lower today.  The Euro Stoxx 50 is down -1.77%.  China's Shanghai Composite fell to a 2-week low and closed down -1.02%.  Japan's Nikkei Stock Average dropped to a 1-week low and closed down -1.99%.

Interest Rates

June 10-year T-notes (ZNM6) today are down by -23 ticks.  The 10-year T-note yield is up +8.4 bp to 4.566%.  Jun T-notes slumped to an 11.75-month low today, and the 10-year T-note yield jumped to an 11.75-month high of 4.580%.  Soaring crude oil prices today are raising inflation expectations and weighing on T-note prices, with WTI crude oil up more than +3% at a 1.5-week high.  Bond markets are under pressure globally amid intensifying fears that surging energy prices from the war in the Middle East will force central banks to tighten monetary policy.  T-notes added to their losses today after US economic news showed that the May Empire manufacturing survey general business conditions unexpectedly rose to a 4-year high, and that Apr manufacturing production posted its largest increase in 14 months.

European government bond yields are moving higher today.  The 10-year German Bund yield rose to a 15-year high of 3.154% and is up +10.2 bp to 3.145%.  The 10-year UK gilt yield jumped to a nearly 18-year high of 5.180% and is up +16.2 bp to 5.155%.

Swaps are discounting an 88% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Chipmakers are sliding today as they give back some of this week’s rally that pushed the S&P 500 and Nasdaq 100 to new record highs.  ARM Holdings Plc (ARM) is down by more than -7% to lead losers in the Nasdaq 100, and Intel (INTC) is down more than -6%.  Also, Lam Research (LRCX) and Micron Technology (MU) are down more than -5%, and Advanced Micro Devices (AMD) and ASML Holding NV (ASML) are down more than -4%.  In addition, Nvidia (NVDA), KLA Corp (KLAC), and Broadcom (AVGO) are down more than -3%, and Marvell Technology (MRVL) and Microchip Technology (MCHP) are down more than -2%.

Mining stocks are retreating today amid plunging gold, silver, and copper prices.  Hecla Mining (HL), Coeur Mining (CDE), and Anglogold Ashanti Ltd (AU) are down more than -8%, and Freeport McMoRan (FCX), Southern Copper (SCCO), Barrick Mining (B), and Newmont Corp (NEM) are down more than -5%. 

Cryptocurrency-exposed stocks are falling today, with Bitcoin (^BTCUSD) down more than -2% at a 1.5-week low.  Coinbase Global (COIN) is down more than -7% to lead losers in the S&P 500, and MARA Holdings (MARA) is down more than -7%.   Also, Strategy (MSTR) and Galaxy Digital Holdings (GLXY) are down by more than -6%, and Riot Platforms (RIOT) is down more than -5%.

Airlines and cruise line operators are under pressure today, as a +3% jump in WTI crude oil to a 1.5-week high raises fuel costs and dampens the companies’ earnings prospects. United Airlines Holdings (UAL) is down more than -2%, and Delta Air Lines (DAL), Carnival (CCL), Royal Caribbean Cruises (RCL), Norwegian Cruise Line Holdings (NCLH), American Airlines Group (AAL), and Southwest Airlines (LUV) are down more than -1%.  Also, Alaska Air Group (ALK) is down -0.60%.

Energy producers and service providers are moving higher today amid the +3% jump in WTI crude oil.  Devon Energy (DVN) is up more than +3%, and APA Corp (APA), Occidental Petroleum (OXY), ConocoPhillips (COP), Exxon Mobil (XOM), and Phillips 66 (PSX) are up more than +2%.  Also, Marathon Petroleum (MPC), Diamondback Energy (FANG), Chevron (CVX), and Valero Energy (VLO) are up more than +1%. 

Dlocal Ltd (DLO) is down more than -8% after reporting Q1 EPS of 14 cents, below the consensus of 17 cents. 

NU Holdings Ltd (NU) is down more than -6% after reporting Q1 revenue of $4.97 billion, weaker than the consensus of $5.04 billion.

Figma Inc. (FIG) is up more than +15% after raising its full-year revenue forecast to $1.42 billion to $1.43 billion from a previous estimate of $1.37 billion, stronger than the consensus of $1.37 billion. 

Dexcom (DXCM) is up more than +8% to lead gainers in the S&P 500 after Elliott Investment Management took a stake in the company and struck a settlement that will put two independent directors on the board.

Papa John’s International (PZZA) is up more than +4% after Reuters reported that Irth Capital is working to take the company private. 

Microsoft (MSFT) is up more than +3% to lead gainers in the Dow Jones Industrials after Pershing Square said it has built a new stake in the company.

C.H. Robinson Worldwide (CHRW) is up more than +3% after Citigroup upgraded the stock to buy from neutral with a price target of $199.

Earnings Reports(5/15/2026)

Actuate Therapeutics Inc (ACTU), Arrive AI Inc (ARAI), ARS Pharmaceuticals Inc (SPRY), Bright Minds Biosciences Inc (DRUG), Falcon's Beyond Global Inc (FBYD), Gossamer Bio Inc (GOSS), Lument Finance Trust Inc (LFT), Maui Land & Pineapple Co Inc (MLP), NexPoint Diversified Real Estate Trust (NXDT), Picard Medical Inc (PMI), RBC Bearings Inc (RBC), Smith-Midland Corp (SMID).