Stocks Supported by Chip Stock Strength and Strong US Retail Sales

The S&P 500 Index ($SPX) (SPY) today is up +0.23%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.74%.  June E-mini S&P futures (ESM26) are up +0.19%, and June E-mini Nasdaq futures (NQM26) are up +0.64%. 

Stock indexes are moving higher today, with the Dow Jones Industrials posting a new all-time high.  Strength in chipmakers is leading the overall market higher.  Stocks also garnered support today on signs of resilient consumer demand after US May retail sales rose more than expected.  Weakness in telecommunication stocks is limiting gains in the overall market.

Stocks also have carryover support from Monday after the US and Iran agreed to end their war and reopen the Strait of Hormuz, knocking crude oil prices down to a 3.5-month low and stoking risk-on sentiment in asset markets.

The market’s focus will be on the conclusion of today’s 2-day FOMC meeting, the first under the leadership of new Fed Chair Kevin Warsh. While the Fed is expected to keep interest rates unchanged, the spotlight will be on how Mr. Warsh navigates the post-meeting press conference and the outlook for inflation.

US MBA mortgage applications fell -3.8% in the week ended June 12, with the purchase mortgage sub-index down -3.4% and the refinancing mortgage sub-index down -4.5%.  The average 30-year fixed rate mortgage was unchanged from last week at 6.60%.

US May retail sales rose +0.9% m/m, stronger than expectations of +0.6% m/m.  Also, May retail sales ex-autos rose +0.8% m/m, stronger than expectations of +0.6% m/m.

WTI crude oil prices (CLN26) recovered from a 3.5-month low today and are moving higher as prices consolidate following this week’s plunge.  The eventual resumption of vessel traffic through the Strait of Hormuz could lead to the release of more than 100 laden ships carrying oil from Middle Eastern countries other than Iran that are stuck in the Persian Gulf, effectively acting as a release of stockpiles into the market.  Goldman Sachs on Tuesday cut its price forecast on Brent crude to $80 a barrel in Q4 of this year, down from $90 a barrel, and said it expects Persian Gulf crude exports to return to pre-war levels by the end of July, one month earlier than previously expected. 

The markets are discounting a 5% chance of a +25 bp rate hike at the conclusion of today’s FOMC meeting.

Overseas stock markets are higher today.  The Euro Stoxx 50 is up +0.33%.  China's Shanghai Composite rose to a 2.5-week high and closed up +0.40%.  Japan’s Nikkei-225 Stock Average climbed to a new all-time high and closed up +0.72%.

Interest Rates

September 10-year T-notes (ZNU6) today are down -4 ticks, and the 10-year T-note yield is up +1.4 bp to 4.436%.  Sep T-notes are moving lower today after US May retail sales rose more than expected, a hawkish factor for Fed policy. Also, today’s stock strength has reduced safe-haven demand for T-notes.  Losses in T-notes are limited in hopes for a less hawkish FOMC meeting today, given that oil prices should decline over time if the Strait of Hormuz reopens as expected. 

European government bond yields are moving lower today.  The 10-year German bund yield fell to a 1.75-month low of 2.914% and is down -0.9 bp to 2.921%.  The 10-year UK gilt yield fell to a 2-month low of 4.734% and is down -4.3 bp to 4.745%.

Eurozone May core CPI was revised upward to 2.6% y/y from the previously reported 2.5% y/y, the strongest pace of increase in 13 months.

ECB Governing Council member Gediminas Simkus said that the "pass-through of the increase in energy and other raw material prices to the market has already occurred," and "at least one more rate increase is certainly more likely than not."

UK May CPI rose 2.8% y/y, weaker than expectations of 3.0% y/y. May core CPI rose 2.6% y/y, weaker than expectations of 2.7% y/y.

Swaps are discounting a 15% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

Chipmakers are rebounding today, recovering some of Tuesday’s sharp losses.  Applied Materials (AMAT) is up more than +9% to lead gainers in the Nasdaq 100, and ASML Holding NV (ASML) and Lam Research (LRCX) are up more than +6%.  Also, Marvell Technology (MRVL) and KLA Corp (KLAC) are up more than +5%, and Broadcom (AVGO) and (INTC) are up more than +3%.  In addition,  Advanced Micro Devices (AMD), Micron Technology (MU), and Qualcomm (QCOM) are up more than +2%. 

Telecommunication stocks are under pressure today, limiting gains in the overall market.  Charter Communications (CHTR) is down more than -3% to lead losers in the Nasdaq 100, and Verizon Communications (VZ) is down more than -2% to lead losers in the Dow Jone Industrials.  Also, AT&T (T) is down more than -3%, and T-Mobile US (TMUS) and Comcast Corp (CMCSA) are down more than -2%.

UniQure NV (QURE) is up more than +63% after saying the FDA allowed 3-year data from its Phase I/II study of AMT-130 for Huntington’s disease to be acceptable as the primary basis for an application for accelerated approval.

La-Z-Boy (LZB) is up more than +25% after reporting Q4 adjusted EPS of $1.26, stronger than the consensus of 83 cents. 

Wabash National Corp (WNC) is up more than +18% after D.A. Davidson upgraded the stock to buy from neutral with a price target of $20. 

Aehr Test Systems (AEHR) is up more than +14% after saying it received a follow-on production order for a fully automated FOX-XP wafer-level burn-in (WLBI) system.

Jabil (JBL) is up more than +12% to lead gainers in the S&P 500 after reporting Q3 net revenue of $8.80 billion, better than the consensus of $8.54 billion, and raised its full-year net revenue forecast to $35 billion from $34 billion, stronger than the consensus of $34.24 billion. 

Credicorp Ltd (BAP) is up more than +4% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $480.

Figma Inc (FIG) is up more than +2% after Citigroup initiated coverage on the stock with a recommendation of buy and a price target of $36.

Charles River Laboratories International (CRL) is up more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $220. 

Space Exploration Technologies (SPCX) is up more than +1%, adding to the +41% gain over the past three sessions on positive carryover from its record $75 billion initial public offering (IPO) late last week, which was more than four times oversubscribed, indicating strong demand for the stock.

CME Group (CME) is down more than -5% after announcing that CEO Terry Duffy is stepping down and CFO Lynne Fitzpatrick will replace him on March 1, 2027. 

Ormat Technologies (ORA) is down more than -4% after Bernstein initiated coverage on the stock with a recommendation of underperform and a price target of $115.

Rexford Industrial Realty (REXR) is down more than -1% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $25.

Leidos Holdings (LDOS) is down more than -1% after Bank of America Global Research downgraded the stock to neutral from buy.   

ResMed (RMD) is down more than -1% after Morgan Stanley downgraded the stock to equal weight from overweight.   

Earnings Reports(6/17/2026)

CarMax Inc (KMX), Jabil Inc (JBL), Safe Bulkers Inc (SB), Smith & Wesson Brands Inc (SWBI).