Stocks Pressured by Weakness in Energy Producers and Cybersecurity Stocks

The S&P 500 Index ($SPX) (SPY) today is down -0.05%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.23%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.15%.  June E-mini S&P futures (ESM26) are down -0.05%, and June E-mini Nasdaq futures (NQM26) are down -0.19%.

Stock indexes are mixed today, with the Nasdaq 100 falling from a new all-time high.  The weakness in energy producers and cybersecurity stocks today is a drag on the overall market. 

Optimism around artificial intelligence, lower oil prices, and easing bond yields are supportive for the broader equity market. Chipmakers are climbing on speculation that they will capture an outsized share of global AI capital spending. Also, crude oil prices are down by more than -4% amid optimism that oil flows from the Middle East will normalize soon, driven by a US-Iran peace deal.  The decline in crude prices has eased inflation expectations and knocked bond yields lower, with the 10-year T-note yield falling to a 1.5-week low of 4.45% today. 

US MBA mortgage applications fell -8.5% in the week ended May 22, with the purchase mortgage sub-index down -0.4% and the refinancing mortgage sub-index down -18.1%.  The average 30-year fixed rate mortgage rose +9 bp to a 9-month high of 6.65% from 6.56% in the prior week.

Crude oil prices are down more than -4% today at a 5-week low after Iranian state television said it obtained an unofficial draft of the US-Iran memorandum, which said US military forces would lift the naval blockade of Iran while Iran would allow restored commercial transit shipping through the Strait of Hormuz.  Also, Secretary of State Rubio said today that "an interim agreement is only a couple of days away." 

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 earnings reports 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 mixed today.  The Euro Stoxx 50 is up +0.64%.  China's Shanghai Composite closed down -1.25%.  Japan's Nikkei Stock Average rallied to a new record high and closed up +0.01%.

Interest Rates

June 10-year T-notes (ZNM6) today are up by +4 ticks.  The 10-year T-note yield is down -0.8 bp to 4.477%.  June T-note prices climbed to a 1.5-week high today, and the 10-year T-note yield fell to a 1.5-week low of 4.445%.  Today’s -4% decline in WTI crude oil prices reduced inflation expectations and is bullish for T-note prices.  Supply pressures are limiting gains in T-notes, as the Treasury will auction $28 billion of 2-year floating-rate notes and $70 billion of 5-year T-notes later today.

European government bond yields today are mixed.  The 10-year German Bund yield is up +0.2 bp to 2.981%. The 10-year UK gilt yield fell to a 5-week low of 4.804% and is down -4.1 bp to 4.834%.

Eurozone Apr new car registrations rose +5.1% y/y to 972,000 units.

ECB Governing Council member Yannis Stournaras said, "The likeliest outcome is an ECB interest rate hike in June" as the conflict in the Middle East and subsequent rise in energy prices are proving to be more prolonged.

German economic advisers to Chancellor Merz cut their 2026 German GDP forecast to 0.5% from a November estimate of 0.9%.

Swaps are discounting a 93% 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 moving higher today, helping lift the broader market.  Micron Technology (MCHP) and Seagate Technology Holdings Plc (STX) are up more than +4%. Also, Western Digital (WDC) is up more than +2%, and Broadcom (AVGO) is up more than +1%.

Airlines and cruise line operators are moving higher today as WTI crude oil prices fell more than -4% to a 5-week low, reducing fuel costs and bolstering profitability prospects.  United Airlines Holdings (UAL) and Norwegian Cruise Line Holdings (NCLH) are up more than +6%, and Delta Air Lines (DAL), Alaska Air Group (ALK),  Carnival (CCL), and Royal Caribbean Cruises Ltd (RCL) are up more than +4%.  Also, Southwest Airlines (LUV) is up more than +3%, and American Airlines Group (AAL) is up more than 2%. 

Energy producers and energy service providers are falling today with WTI crude oil prices down more than -4% to a 5-week low.  Baker Hughes (BKR) is down more than -4%, and Halliburton (HAL) is down more than -3%.  Also, Devon Energy (DVN), Occidental Petroleum (OXY), Exxon Mobil (XOM), APA Corp (APA), and Valero Energy (VLO) are down more than -2%. 

Zscaler (ZS) is down more than -27% to lead cybersecurity stocks lower and losers in the Nasdaq 100 after forecasting Q4 revenue of $875 million to $878 million, below the consensus of $879.1 million.  Also, CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), Cloudflare (NET), Fortinet (FTNT), and Okta (OKTA) are down more than -3%.

Dycom Industries (DY) is up more than +29% after reporting Q1 contract revenue of $1.96 billion, well above the consensus of $1.67 billion. 

Bath & Body Works (BBWI) is up more than +15% after reporting Q1 net sales of $1.38 billion, better than the consensus of $1.36 billion.  

MGM Resorts International (MGM) is up more than +7% to lead gainers in the S&P 500 after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $46.

GXO Logistics (GXO) is up more than +4% after Barclays upgraded the stock to overweight from equal weight with a price target of $65.

FedEx (FDX) is up more than +2% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $460.

Verra Mobility (VRRM) is down more than -71% after cutting its full-year adjusted EPS estimate to $1.19-$1.25 from a prior estimate of $1.32-$1.38, weaker than the consensus of $1.36, and said Avis Budget had terminated its contract with the company.

PDD Holdings (PDD) is down more than -10% after reporting Q1 revenue of 106.23 billion yuan, well below the consensus of 108.6 billion yuan.

GlobalFoundries (GFS) is down more than 8% after Mubadala Investment said it is selling a block of 22 million GFS shares at $ 85.80 to $ 86.30 each.

Dick’s Sporting Goods (DKS) is down more than -2% after reporting a Q1 gross margin of 32.6%, below the consensus of 33.4%.

Earnings Reports(5/27/2026)

Agilent Technologies Inc (A), Bath & Body Works Inc (BBWI), Dick's Sporting Goods Inc (DKS), Everpure Inc (P), HEICO Corp (HEI), HP Inc (HPQ), Marvell Technology Inc (MRVL), nCino Inc (NCNO), Nutanix Inc (NTNX), Salesforce Inc (CRM), Snowflake Inc (SNOW), Synopsys Inc (SNPS), U-Haul Holding Co (UHAL).