Stocks Supported by US-Iran Peace Deal Optimism

The S&P 500 Index ($SPX) (SPY) today is up +0.54%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.70%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.53%.  June E-mini S&P futures (ESM26) are up +0.50%, and June E-mini Nasdaq futures (NQM26) are up +0.52%.

Stock indexes are moving higher today, with the S&P 500 and Nasdaq 100 posting 1-week highs, and the Dow Jones Industrials posting a new all-time high.  Stocks are supported by hopes that the US and Iran are moving closer to a peace deal. Also, chipmakers and AI-infrastructure stocks are climbing amid the unrelenting enthusiasm for artificial intelligence.  In addition, Workday is up more than +8% to lead software stocks higher after reporting better-than-expected Q1 results and giving a positive outlook.  

Stocks added to their gains today after crude oil prices fell following a Reuters report that Qatar has sent a negotiating team to Tehran in coordination with the US to help secure a deal to end the war. 

WTI crude oil prices (CLM26) remain extremely volatile and are susceptible to headlines from the Iran war.  Prices are slightly lower today on hopes that the US and Iran are close to a peace deal.  Iran said the latest US proposal has "narrowed the gaps" between the two sides.  That proposal suggested a short-term deal that would see Iran open the Strait of Hormuz and the US lift a blockade of Iranian ports, with both sides then going into deeper negotiations over Iran's nuclear program.  Also, Secretary of State Rubio today noted “slight progress” in the negotiations.  Late Monday, President Trump said he called off a strike on Iran scheduled for Tuesday after Gulf allies asked for more time to give diplomacy a chance.

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 1% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.

Earnings season is winding down, and reports thus far have been supportive of stocks.  As of today, 83% of the 470 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 higher today.  The Euro Stoxx 50 climbed to a 2-week high and is up +1.23%. China's Shanghai Composite recovered from a 3-week low and closed up +0.87%.  Japan's Nikkei Stock Average rose to a 1-week high and closed up sharply by +2.68%.

Interest Rates

June 10-year T-notes (ZNM6) today are up +7 ticks.  The 10-year T-note yield is down -3.4 bp to 4.536%.  Falling inflation expectations are lifting T-note prices, as the 10-year breakeven inflation rate fell to a 1-month low of 2.409% today.  Strength in stocks today has curbed safe-haven demand for government debt and is limiting gains in T-notes. 

European government bond yields are mixed today.  The 10-year German Bund yield fell to a 1.5-week low of 3.022% and is down -6.6 bp to 3.032%.  The 10-year UK gilt yield dropped to a 2-week low of 4.892% and is down -7.0 bp to 4.896%.

The German May IFO business confidence index unexpectedly rose +0.4 to 84.9, stronger than expectations of a decline to 84.2.

The German June GfK consumer confidence index unexpectedly rose +3.3 to -29.8, stronger than expectations of a decline to -34.0.

ECB Governing Council member Alexander Demarco said, "In June, the ECB will probably need to hike interest rates as we need to send a signal that we are committed to our medium-term 2% inflation target."

UK Apr retail sales ex-auto fuel fell -0.4% m/m, weaker than expectations of -0.3% m/m.

Swaps are discounting an 87% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Workday (WDAY) is up more than +7% to lead software stocks higher and gainers in the Nasdaq 100 after reporting Q1 adjusted EPS of $2.66, stronger than the consensus of $2.51, and forecasting Q2 subscription revenue of $2.46 billion, better than the consensus of $2.45 billion.  Also, Atlassian Corp (TEAM) is up more than +5%, and ServiceNow (NOW) is up more than +4%.  Salesforce (CRM) is up more than +3%, and Intuit (INTU), Datadog (DDOG), Adobe Systems (ADBE), and Oracle (ORCL) are up more than +2%.  In addition, Autodesk (ADSK) and Microsoft (MSFT) are up more than +1%.

Chipmakers are climbing today, helping lift the broader market.  Advanced Micro Devices (AMD) and Qualcomm (QCOM) are up more than +4%, and Analog Devices (ADI), NXP Semiconductors NV (NXPI), and Texas Instruments (TXN) are up more than +3%. Also, ASML Holding NV (ASML) is up more than +2%, and Marvell Technology (MRVL), KLA Corp (KLAC), Microchip Technology (MCHP), and Applied Materials (AMAT) are up more than +1%. 

IMAX Corp. (IMAX) is up more than +15% after the Wall Street Journal reported the company is exploring a sale and has approached entertainment companies as potential buyers. 

Zoom Communications (ZM) is up more than +11% after reporting Q1 of $1.24 billion, above the consensus of $1.22 billion, and raising its 2027 revenue forecast to $5.08 billion-$5.09 billion from a previous forecast of $5.07 billion-$5.08 billion, better than the consensus of $5.07 billion.

Estee Lauder (EL) is up more than +10% after its proposed merger with Puig Brands SA fell apart due to compensation demands from Charlotte Tilbury. 

Ross Stores (ROST) is up more than +8% after reporting Q1 sales of $6.01 billion, stronger than the consensus of $5.61 billion. 

Merck & Co (MRK) is up more than +4% to lead gainers in the Dow Jones Industrials after the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended approval of Keytruda in combination with Padcev for the treatment of bladder cancer.

International Business Machines (IBM) is up more than +2%, adding to Thursday’s +12% surge after the Wall Street Journal reported the company is receiving a $1 billion grant from the US government for a stake in its quantum-computing business. 

Take-Two Interactive Software (TTWO) is down more than -5% to lead losers in the S&P 500 and Nasdaq 100 after forecasting 2027 net bookings of $8.0 billion to $8.2 billion, well below the consensus of $9.11 billion. 

Summit Therapeutics (SMMT) is down more than -4% after Bernstein initiated coverage on the stock with an underperform rating and a price target of $7.70.  

Denali Therapeutics (DNLI) is down more than -4% after reporting that a mid-stage study of an experimental therapy for Parkinson’s disease, with partner Biogen, did not meet its primary or secondary endpoints.

Inspire Medical Systems (INSP) is down more than -3% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $39. 

Earnings Reports(5/22/2026)

BJ's Wholesale Club Holdings Inc (BJ), Booz Allen Hamilton Holding Co (BAH), BRT Apartments Corp (BRT), Edgewise Therapeutics Inc (EWTX), ePlus Inc (PLUS), Hub Group Inc (HUBG), Nano-X Imaging Ltd (NNOX), Replimune Group Inc (REPL), XCF Global Inc (SAFX).