S&P 500 and Nasdaq 100 Climb to Record Highs on Tech Stock Strength

The S&P 500 Index ($SPX) (SPY) today is up +0.81%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.74%.  June E-mini S&P futures (ESM26) are up +0.77%, and June E-mini Nasdaq futures (NQM26) are up +1.71%.

Stock indexes are mostly rallying today, with the S&P 500 and Nasdaq 100 posting new all-time highs.  Stocks are finding support as a drop in crude oil prices and bond yields fuels a rally in technology stocks after officials signaled the US was nearing a deal with Iran to reopen the Strait of Hormuz and restore oil flows.  According to the Washington Post, the US and Iran have developed a memorandum that would extend the ceasefire by 60 days as the two sides seek a permanent deal, and if agreed, the Strait of Hormuz would be de-mined and reopened in the meantime.  Secretary of State Rubio said negotiations will still "take a few days" as both sides discuss language in an initial document.  WTI crude oil fell to a 2.5-week low today, and the 10-year T-note yield fell to a 1.5-week low of 4.47%.

However, stock index futures were undercut after the US Central Command said US forces struck Iranian missile-launch sites and boats trying to place mines in the Strait of Hormuz.  Also, weakness in health insurance stocks and energy producers has knocked the Dow Jones Industrial Average into negative territory.

US economic news today is mixed for stocks.  The Apr Chicago Fed National Activity Index rose +0.29 to a 13-month high of 0.14, stronger than expectations of -0.03.  Also, the Mar S&P Composite-20 home price index rose +0.83% y/y, a smaller increase than the +0.90% y/y expected and the smallest year-on-year gain in more than 2.5 years.  In addition, the Conference Board US May consumer confidence index fell -0.7 to 93.1, a smaller decline than expectations of 92.0. 

WTI crude oil prices (CLM26) remain extremely volatile and are susceptible to headlines from the Iran war.  Crude oil prices fell more than -2% today to a 2.5-week low after the US and Iran said peace talks were progressing. However, crude prices rebounded from their worst levels after US and Israeli jets struck missile sites in Iran and boats laying mines in the Strait of Hormuz. 

The International Energy Agency (IEA) said in a recently released 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, and reports thus far have been supportive of stocks.  As of today, 83% of the 475 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 lower today.  The Euro Stoxx 50 is down -0.81%.  China's Shanghai Composite closed down -0.17%.  Japan's Nikkei Stock Average closed down -0.25%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +17 ticks.  The 10-year T-note yield is down -6.5 bp to 4.493%.  June T-note prices rallied to a 1.5-week high, and the 10-year T-note yield fell to a 1.5-week low of 4.473%.  Today’s -2% fall in WTI crude oil prices has reduced inflation expectations and is bullish for T-note prices.  The 10-year breakeven inflation rate fell to a 1-month low of 2.375% today.  Limiting gains in T-notes is supply pressure, as the Treasury will auction $217 billion of T-notes and floating-rate notes this week, beginning with today’s $69 billion auction of 2-year T-notes. 

European government bond yields are mixed.  The 10-year German Bund yield is up +3.6 bp to 2.982%. The 10-year UK gilt yield fell to a 5-week low of 4.820% and is down -2.8 bp to 4.869%.

ECB Executive Board member Isabel Schnabel said even if there's a quick resolution to the conflict in the Middle East, "I think a rate hike by the ECB in June will be needed."  She added that "given the high persistence of the energy shock, I believe that the negative impact on economic growth will also be stronger" than initially expected. 

ECB Chief Economist Philip Lane said the ECB will probably raise its quarterly inflation outlook at next month's policy meeting as the Iran war keeps energy prices elevated.

Swaps are discounting a 92% 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 gaining today, helping lift the broader market.  Micron Technology (MCHP) is up more than +12% to lead gainers in the S&P 500 and Nasdaq 100, and ON Semiconductor (ON) and Marvell Technology (MRVL) are up more than +8%. Also, Sandisk (SNDK) is up more than +6%, and Western Digital (WDC) and Analog Devices (ADI) are up more than +5%.  In addition, Microchip Technology (MCHP) and Texas Instruments (TXN) are up more than +4%, and Advanced Micro Devices (AMD), NXP Semiconductors NV (NXPI), and  KLA Corp (KLAC) are up more than +3%. 

Airlines and cruise line operators are climbing today, with WTI crude oil prices down more than -3%, which reduces fuel costs and bolsters profitability.  American Airlines Group (AAL) is up more than +6%, and United Airlines Holdings (UAL) is up more than +5%.  Also, Alaska Air Group (ALK), Norwegian Cruise Line Holdings (NCLH), and Royal Caribbean Cruises Ltd (RCL) are up more than +4%.  In addition, Delta Air Lines (DAL) and Carnival (CCL) are up more than +3%, and Southwest Airlines (LUV) is up more than 2%. 

Rocket and satellite companies are moving higher today after SpaceX filed to become the largest-ever initial public offering.  Redwire (RDW) is up more than +27%, and AST Spacemobile (ASTS) is up more than +19%.  Also, Firefly Aerospace (FLY) and Intuitive Machines (LUNR) are up more than +14%. 

Energy producers and energy service providers are falling today after WTI crude oil prices slid to a 2.5-week low.  Chevron (CVX) is down more than -2% to lead losers in the Dow Jones industrials.  Also, Exxon Mobil (XOM) is down more than -2%, and Devon Energy (DVN), ConocoPhillips (COP), APA Corp (APA), and Valero Energy (VLO) are down more than -1%. 

Defensive health insurance stocks are under pressure with today’s rally in the broader market. Centene (CNC) and Elevance Health (ELV) are down more than -2%.  Also, Humana (HUM), CVS Health (CVS), and Cigna Group (CI) are down more than -1%.  

Allient (ALNT) is up more than +9% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $80. 

Autoliv (ALV) is up more than +2% after Handelsbanken upgraded the stock to buy from hold with a price target of $145. 

AutoZone (AZO) is down more than -11% to lead losers in the S&P 500 after reporting Q3 net sales of $4.84 billion, below the consensus of $4.87 billion.  Also, O’Reilly Automotive (ORLY) is down more than -4% to lead losers in the Nasdaq 100. 

Earnings Reports(5/26/2026)

AutoZone Inc (AZO), Box Inc (BOX), Champion Homes Inc (SKY), CSW Industrials Inc (CSW), Digital Turbine Inc (APPS), Modine Manufacturing Co (MOD), Ooma Inc (OOMA), Semtech Corp (SMTC), Transcat Inc (TRNS), Zscaler Inc (ZS).