Broader Market Settles Lower as Chip Stocks Sink

The S&P 500 Index ($SPX) (SPY) on Tuesday closed down -0.26%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.17%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.12%.  June E-mini S&P futures (ESM26) fell -0.36%, and June E-mini Nasdaq futures (NQM26) fell -1.15%.

Stock indexes gave up an early advance on Tuesday and retreated, with the S&P 500 and Nasdaq 100 falling to 5-week lows.  Chipmakers gave up an early advance on Tuesday and sold off sharply as investors rotated out of the sector, weighing on the broader market.  Also, weakness in software stocks dragged on the overall market, and energy producers slid amid Tuesday’s -3% plunge in WTI crude oil prices (CLN26) to a 7-week low. 

However, home builders and suppliers rallied on Tuesday after US Apr existing home sales rose to a 5-month high.  Also, airline stocks and cruise line operators moved higher as the slump in crude prices on Tuesday lowered fuel costs and boosted the companies’ profitability prospects.

Tuesday’s US economic news was supportive for stocks, as the Apr trade deficit eased to -$55.9 billion from -$56.6 billion in Mar, narrower than the -$56.1 billion expected.   Also, May existing home sales rose +3.2% m/m to a 5-month high of 4.17 million, stronger than expectations of 4.07 million. 

Crude oil prices sank on Tuesday to a 7-week low after Iran and Israel agreed to end hostilities toward each other.  President Trump on Tuesday predicted a swift end to war with Iran and a subsequent fall in oil prices and said, “We’re in the final throes of what will be a very, very good deal, and that they could have at least an idea one or two days from now” about the deal.   However, crude price bounced off its low and stocks added to their losses Tuesday afternoon when President Trump blamed Iran for shooting down a US military helicopter and said the US would respond, reigniting fears that the US-Iran peace plan is in peril and the Strait of Hormuz will remain closed, further tightening global oil supplies.

China trade news was better than expected, a positive factor for global economic growth.  May exports rose +19.4% y/y, stronger than expectations of +15.0% y/y.  Also, May imports rose +27.4% y/y, stronger than expectations of +26.0% y/y.

The markets are discounting a 3% chance of a +25 bp rate hike at the next FOMC meeting on June 16-17.

Overseas stock markets settled mixed on Tuesday.  The Euro Stoxx 50 fell from a 1.5-week high and closed down -0.21%.  China's Shanghai Composite closed up +1.28%.  Japan's Nikkei Stock Average closed up +2.17%.

Interest Rates

September 10-year T-notes (ZNU6) on Tuesday closed up +6 ticks, and the 10-year T-note yield fell -3.6 bp to 4.526%.  Sep T-note prices rose on Tuesday amid a -3% plunge in WTI crude oil prices, which eased inflation expectations.  The 10-year breakeven inflation rate fell to a 2-month low of 2.337% on Tuesday.  Also, Tuesday’s stock sell-off boosted safe-haven demand for T-notes. 

Tuesday’s stronger-than-expected US May existing home sales report limited gains in T-notes.  Also, so-so demand for the Treasury’s $58 billion auction of 3-year T-notes was negative for T-notes, as the bid-to-cover ratio was 2.64, below the 10-auction average of 2.65.

European government bond yields moved lower on Tuesday.  The 10-year German Bund yield fell -1.8 bp to 3.043%.  The 10-year UK gilt yield fell -3.0 bp to 4.903%.

German Apr industrial production rose +0.4% m/m, right on expectations and the biggest increase in five months.

German trade news was better than expected as Apr exports unexpectedly rose +0.9% m/m, stronger than expectations of a-0.5% m/m decline. Also, Apr imports unexpectedly rose +1.2% m/m versus expectations of a -2.0% m/m decline.

Swaps are discounting a 100% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.

US Stock Movers

Chipmakers gave up an early advance today and turned lower, weighing on the broader market.  Marvell Technology (MRVL) closed down more than -10% to lead losers in the Nasdaq 100, and Qualcomm (QCOM) and ARM Holdings Plc (ARM) closed down more than -7%.  Also, Advanced Micro Devices (AMD) and Micron Technology (MU) closed down more than -4%, andIntel (INTC) closed down more than -3%.  In addition, NXP Semiconductors NV (NXPI) closed down more than -2%, and Broadcom (AVGO) and Texas Instruments (TXN) closed down more than -1%.

Software stocks retreated on Tuesday, weighing on the overall market.  ServiceNow (NOW) closed down more than -6%, and Salesforce (CRM) closed down more than -4% to lead losers in the Dow Jones Industrials.  Also, Intuit (INTU), Oracle (ORCL), and Palantir Technologies (PLTR) closed down more than -3%, and Workday (WDAY), Atlassian Corp (TEAM), and Adobe Systems (ADBE) closed down more than -2%.  In addition, Microsoft (MSFT) and Datadog (DDOG) closed down more than -1%.

Energy producers and service providers slid on Tuesday as WTI crude oil fell more than -3% to a 7-week low.  APA Corp (APA), Marathon Petroleum (MPC), Phillips 66 (PSX), Devon Energy (DVN), Halliburton (HAL), and Diamondback Energy (FANG) closed down more than -2%.  Also, Baker Hughes (BKR), Chevron (CVX), Exxon Mobil (XOM), Valero Energy (VLO), ConocoPhillips (COP), Occidental Petroleum (OXY), and SLB Ltd (SLB) closed down more than -1%.

Airline stocks and cruise line operators rallied on Tuesday as WTI crude oil fell more than 3% to a 7-week low, lowering the companies’ fuel costs and boosting profitability prospects. Alaska Air Group (ALK) closed up more than +6%, and Southwest Airlines (LUV) closed up more than +5%.  Also, United Airlines Holdings (UAL) closed up more than +4%, and American Airlines Group (AAL), Delta Air Lines (DAL), and Royal Caribbean Cruises (RCL) closed up more than +3%.  In addition, Carnival (CCL) and Norwegian Cruise Line Holdings (NCLH) closed up more than +2%.

Homebuilders and building suppliers moved higher on Tuesday after US May existing home sales rose more than expected to a 5-month high.  Builders Firstsource (BLDR) closed up more than +6%, and Toll Brothers (TOL) closed up more than +5%.  Also, DR Horton (DHI) and Pulte Group (PHM) closed up more than +4%, and Home Depot (HD) closed up more than +3% to lead gainers in the Dow Jones Industrials.  In addition, KB Home (KBH) closed up more than +3%, and Lennar (LEN) closed up more than +1%. 

SailPoint (SAIL) closed down more than -11% after forecasting Q2 adjusted EPS of 7 cents to 8 cents, the midpoint below the consensus of 7.9 cents. 

United Natural Foods (UNFI) closed down more than -10% after reporting Q3 net sales of $7.72 billion, weaker than the consensus of $7.80 billion, and forecasting full-year net sales of $31.10 billion to $31.30 billion, below the consensus of $31.32 billion. 

Vail Resorts (MTN) closed down more than -4% after reporting Q3 EPS of $8.81, weaker than the consensus of $9.00. 

Novanta (NOVT) closed down more than -2% after agreeing to acquire Riverpoint Medical from Arlington Capital for $1.2 billion in cash.

Nuvalent (NUVL) closed up more than +39% after GSK Plc agreed to buy the company for $10.6 billion, or about $124 a share. 

J M Smucker (SJM) closed up more than +10% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of $2.77, better than the consensus of $2.64, and forecasting 2027 adjusted EPS of $9.75 to $10.25, the midpoint above the consensus of $9.78. 

West Pharmaceutical Services (WST) closed up more than +4% after Barclays upgraded the stock to overweight from equal weight with a price target of $400.

Applied Digital (APLD) closed up more than +2% after signing a 15-year take-or-pay lease with a US-based artificial intelligence hyperscaler for 210 megawatts of IT load at its Delta Forge 2 campus. 

Earnings Reports(6/10/2026)

Chewy Inc (CHWY), Core & Main Inc (CNM), Oracle Corp (ORCL).