Stocks Pressured as Oil Prices Jump on Report that Iran Has Halted Ceasefire Negotiations

The S&P 500 Index ($SPX) (SPY) is down -0.08%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.11%.  June E-mini S&P futures (ESM26) are down -0.14%, and June E-mini Nasdaq futures (NQM26) are up +0.10%.

Stock indexes are mixed, pressured by today's +8% rally in crude oil prices and the +7 bp rise in the 10-year T-note yield.  Crude oil rallied sharply after a report that Iran has halted the exchange of messages with the US regarding a draft ceasefire agreement due to Israel's stepped-up attacks on Lebanon.  Iran has consistently said there would be no US-Iran ceasefire without a truce in Lebanon.  President Trump said Sunday night, "It will all work out in the end," even though attacks continue on both sides and Israel continues to launch attacks in Lebanon. 

Tech stocks are seeing support as Nvidia is up more than +3% after saying it will enter the PC market with a new chip aimed at PC's that seeks to break the stranglehold of Intel and AMD.  Moreover, software stocks are doing well today, with Microsoft up by more than +2%, after Nvidia's CEO soothed concerns about AI disruptions. 

Stocks are seeing support after the May US manufacturing PMI rose +1.3 points to 54.0, stronger than expectations for a +0.3 point rise to 53.0. However, S&P's final-May manufacturing PMI was revised -0.2 points lower to 55.1 from the preliminary report of 55.3, versus expectations for an unrevised report.  On a positive inflation note, the May ISM prices-paid index fell by -2.5 points to 82.1 from 84.6, weaker than expectations for a +0.4 point rise to 85.0. 

The markets are looking ahead to Friday's US unemployment report, which is expected to show an unchanged unemployment rate of +4.3% and a rise in payrolls of +89,000.

The markets are discounting a 5% chance of a +25 bp FOMC rate hike at the next FOMC meeting on June 16-17.

The generally favorable Q1 earnings season is winding down.  As of last Friday, 84% of the 485 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 today are mixed.  The Euro Stoxx 50 is down -0.68%.  China's Shanghai Composite closed down -0.27%.  Japan's Nikkei Stock Average rallied to a new record high and closed up +0.91%.

Interest Rates

June 10-year T-notes (ZNM6) are down -16 ticks, and the 10-year T-note yield is up +7.9 bp at 4.514%.  T-note prices are trading lower due to today's sharp +8% rally in crude oil prices, which pushed the 10-year breakeven inflation expectations rate up +3.5 bp to 2.435%.

European government bond yields are higher.  The 10-year German Bund yield is up +7.3 bp at 3.011%. The 10-year UK gilt yield is up +8.5 bp to 4.897%.

Swaps are discounting a 94% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

European government bond yields are higher.  The 10-year German bund yield is up +7.5 bp at 3.013%. The 10-year UK gilt yield is up +7.8 bp at 4.890%.

Swaps are discounting a 97% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.

US Stock Movers

Nvidia (NVDA) is up more than +3% after saying it will enter the PC market with a new chip, which led to losses today of more than -2% for PC-chip competitor Intel (INTC), -0.1% for Advanced Micro Devices (AMD), and -6% for Qualcomm (QCOM).

Microsoft (MSFT) is up more than +2% after Nvidia's CEO downplayed concerns that AI will severely disrupt the software sector.

Taylor Morrison Home Corp (TMHC) is up more than +20% after news of its acquisition for about $8.5 billion by Berkshire Hathaway, which is the first acquisition made by Berkshire's new CEO Greg Abel.

Strategy (MSTR) is down -5% after a regulatory filing showed the company sold 32 Bitcoin for $2.5 million, at an average sales price of $77,135.

 MGM Resorts (MGM) is up more than +16% after DealBook reported that Barry Diller's People Inc will offer to buy the rest of the company at a valuation of $18 billion.

Earnings Reports(6/1/2026)

Credo Technology Group Holding (CRDO), Hewlett Packard Enterprise Co (HPE), Science Applications International Corp (SAIC), Smith-Midland Corp (SMID).