Stocks Mixed as Crude Oil Prices and Bond Yields Fall

The S&P 500 Index ($SPX) (SPY) today is up +0.07%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.29%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.25%.  June E-mini S&P futures (ESM26) are up +0.10%, and June E-mini Nasdaq futures (NQM26) are down -0.17%.

Stock index futures recovered from overnight losses and are trading mixed as crude oil prices fell more than -1% on hopes for a breakthrough in the standoff between the US and Iran over the Strait of Hormuz.  Crude prices retreated today after Tasnim, Iran's semi-official news agency, reported that the US has proposed a temporary waiver on Iran oil sanctions until a final peace agreement is reached.  T-note yields gave up an early advance and also turned lower on the news.

Stocks initially were under pressure today as the stalemate between the US and Iran keeps driving crude oil prices and bond yields higher.  Comments from President Trump on Sunday weighed on stocks and boosted crude oil prices when he said the "clock is ticking" on Iran and it "better get moving FAST on a peace deal, or there won't be anything left of them."  Also, ramped-up geopolitical tensions weighed on stocks after Reuters reported that Pakistan has deployed 8,000 troops, a squadron of fighter jets, and an air defense system to Saudi Arabia as part of a mutual defense pact, a deployment described as a "substantial, combat-capable force" to support Saudi Arabia if it comes under further attack. 

Weaker-than-expected economic news from China is bearish for global growth prospects.  China Apr industrial production rose +4.1% y/y, weaker than expectations of +6.0% y/y. Also, China Apr retail sales rose +0.2% y/y, weaker than expectations of +2.0% y/y.  In addition, China Apr new home prices fell -0.19% y/y, the thirty-fifth consecutive month that prices have declined.

WTI crude oil prices (CLM26) fell from a 2-week high today and turned lower after Tasnim, Iran's semi-official reporting agency, said the US has proposed a temporary waiver on Iran oil sanctions until a final peace agreement is reached.  Crude prices initially rose today after Reuters reported that Pakistan has deployed troops and jets to Saudi Arabia as part of a mutual defense pact. On Sunday, the United Arab Emirates (UAE) reported that a drone sparked a fire in a power station at the UAE’s Barakah nuclear plant, and Saudi Arabia said it intercepted and destroyed three drones that entered its airspace.  Last 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 season is winding down, though reports thus far 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 mixed today.  The Euro Stoxx 50 rebounded from a 1.5-week low and is up +0.75%.  China's Shanghai Composite dropped to a 2-week low and closed down -0.09%.  Japan's Nikkei Stock Average fell to a 1-week low and closed down -0.97%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +3 ticks.  The 10-year T-note yield is down -1.0 bp to 4.583%.  Jun T-notes recovered from a 15-month low today, and the 10-year T-note yield fell from a 15-month high of 4.631%.  Short covering emerged in T-notes today, pushing prices higher after crude oil prices fell when Reuters reported that the US proposed a temporary waiver on Iran oil sanctions.

T-notes initially moved lower today after WTI crude oil rose to a 2-week high, raising inflation expectations.  The 10-year breakeven inflation rate rose to a 3-year high of 2.530% today.  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. 

European government bond yields are moving lower today.  The 10-year German Bund yield fell from a 15-year high of 3.195% and is down -2.9 bp to 3.138%.  The 10-year UK gilt yield fell from a nearly 18-year high of 5.189% and is down -6.9 bp to 5.103%.

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 moving higher today, providing support to the overall market.  Micron Technology (MU), Advanced Micro Devices (AMD), and Intel (INTC) are up more than +2%. Also, Analog Devices (ADI), Lam Research (LRCX), NXP Semiconductors NV (NXPI), and Qualcomm (QCOM) are up more than +1%. 

Airlines and cruise line operators are moving higher today as WTI crude oil prices are down more than -1%, which lowers fuel costs and improves the companies’ earnings prospects. Alaska Air Group (ALK) is up more than +2%, and United Airlines Holdings (UAL), American Airlines Group (AAL), Southwest Airlines (LUV), Carnival (CCL), and Delta Air Lines (DAL) are up more than +1%.

Cryptocurrency-exposed stocks are sliding today, with Bitcoin (^BTCUSD) down more than -2% at a 2-week low.  Strategy (MSTR) is down more than -6%, and Galaxy Digital Holdings (GLXY) is down more than -5%.  Also, MARA Holdings (MARA) is down more than -3%, Coinbase Global (COIN) is down more than -2%, and Riot Platforms (RIOT) is down more than -1%.

LiveRamp Holdings (RAMP) is up more than +27% after Publicis Groupe SA agreed to buy the company for about $2.5 billion in cash, or about $38.50 per share.

Dominion Energy (D) is up more than +11% to lead gainers in the S&P 500 on reports that NextEra Energy is discussing a stock deal for the company that would value it at about $76 a share or around $66 billion.

Bio-Rad Laboratories (BIO) is up more than +9% after the Wall Street Journal reported that Elliot Investment Management has built a sizable stake in the company. 

VF Corp (VFC) is up more than +4% after Williams Trading LLC double-upgraded the stock to buy from sell with a price target of $19. 

Zscaler (ZS) is up more than +4% after B Riley Securities upgraded the stock to buy from neutral with a price target of $225. 

Regeneron Pharmaceuticals (REGN) is down more than -10% to lead losers in the S&P 500 and Nasdaq 100 after reporting its data from a Phase 3 trial of its fianlimab for treatment of metastatic melanoma fell short of expectations.

Hims & Hers Health (HIMS) is down more than -7% after saying it intends to offer $300 million aggregate principal amount of convertible senior notes due 2032 in a private placement. 

Mobileye (MBLY) is down more than -5% after Jeffries initiated coverage on the stock with a recommendation of underperform and a price target of $8.

UnitedHealth Group (UNH) is down more than -2% to lead losers in the Dow Jones Industrials after Berkshire Hathaway exited its stake in the company.

Earnings Reports(5/18/2026)

Agilysys Inc (AGYS), James Hardie Industries PLC (JHX), XP Inc (XP).