The S&P 500 Index ($SPX) (SPY) today rose +0.72%, the Dow Jones Industrial Average ($DOWI) (DIA) rose +0.31%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +1.42%. June E-mini S&P futures (ESM26) rose +0.62%, while June E-mini Nasdaq futures (NQM26) rose +1.33%.
Stock indexes are rallying today, with the S&P 500 and Nasdaq 100 posting new all-time highs. Stocks found support today from lower crude oil prices and bond yields after officials signaled that the US is moving closer to a deal with Iran to reopen the Strait of Hormuz and restore oil flows. According to the Washington Post, the US and Iran have made a memorandum to extend the ceasefire by 60 days as both sides seek a permanent agreement, and if agreed, the Strait of Hormuz will be lowered and reopened in the meantime. Secretary of State Rubio said negotiations will “take a few more days” as both sides negotiate the language in the original document. WTI crude 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%.
More news from Barchart
However, the futures of the stock index have declined after the US Central Command said that the US military attacked Iran’s missile launch sites and boats trying to lay mines in the Strait of Hormuz.
US economic news today was mixed in stocks. 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 annual gain in more than 2.5 years.
WTI (CLM26) crude oil prices remain extremely volatile and susceptible to headlines from the Iran war. Crude oil prices fell more than -3% today to a 2.5-week low after the US and Iran said peace talks were continuing. However, crude prices rebounded from their worst levels after US and Israeli warplanes hit missile sites in Iran and minelaying boats in the Strait of Hormuz.
The International Energy Agency (IEA) said in its latest monthly report that global oil inventories fell by 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 reduced about 500 billion bbl from the world’s crude reserves, and the decline could reach 1 billion bbl by June.
Markets are discounting a 2% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings season is winding down, and the reports so far have been supportive of the stock. As of today, 83% of the 475 S&P 500 companies that reported Q1 earnings beat estimates. Q1 S&P 500 earnings are expected to rise +12% year over year, according to Bloomberg Intelligence. Stripping out the tech sector, Q1 earnings are expected to rise around +3%, the weakest figure in two years.
International stock markets are lower today. The Euro Stoxx 50 fell -0.62%. China’s Shanghai Composite closed -0.17%. Japan’s Nikkei Stock Average closed -0.25%.
Interest rates
June 10-year T-notes (ZNM6) today rose by +19 ticks. The 10-year T-note yield fell -7.5 bp to 4.483%. June T-note prices rose 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 -3% drop in WTI crude oil prices has lowered inflation expectations and is fueling T-note prices. The 10-year inflation rate fell to a 1-month low of 2.375% today. Limited gains in T-notes are supply pressures, as the Treasury Department will sell $217 billion of T-notes and floating notes this week, starting with today’s $69 billion auction of 2-year notes.
European government bond yields are mixed. The 10-year German Bund yield rose +2.7 bp to 2.973%. UK 10-year yields fell to a 5-week low of 4.820% and fell -4.7 bp to 4.850%.
ECB Executive Board member Isabel Schnabel said that even if there is a quick solution to the Middle East conflict, “I think a rate hike by the ECB in June will be necessary.”
Swaps discount a 91% chance of a +25 bp ECB rate hike at its next policy meeting on 11 June.
US Stock Movers
Chipmakers and AI infrastructure stocks are gaining today, helping to lift the broader market. Micron Technology (MCHP) rose more than +12% to lead the gainers in the S&P 500 and Nasdaq 100, while ON Semiconductor (ON) and Marvell Technology (MRVL) rose more than +8%. Also, Sandisk (SNDK) rose more than +6%, while Western Digital (WDC) and Analog Devices (ADI) rose more than +5%. In addition, Microchip Technology (MCHP) and Texas Instruments (TXN) rose more than +4%, while Advanced Micro Devices (AMD), NXP Semiconductors NV (NXPI), and KLA Corp (KLAC) rose more than +3%.
Airlines and liner operators are up today, as WTI crude oil prices fell more than -3%, reducing fuel costs and boosting profits. United Airlines Holdings (UAL) rose more than +5%, while American Airlines Group (AAL), Alaska Air Group (ALK), and Norwegian Cruise Line Holdings (NCLH) rose more than +4%. Also, Delta Air Lines (DAL) and Southwest Airlines (LUV) rose more than +3%, Carnival (CCL) rose more than +2%, and Royal Caribbean Cruises Ltd (RCL) rose more than +2%.
Rocket and satellite companies are moving higher today after SpaceX filed for the largest initial public offering ever. Redwire (RDW) is up more than +23%, while Firefly Aerospace (FLY) and Intuitive Machines (LUNR) are up more than +18%. Also, AST Spacemobile (ASTS) is up more than +15%.
Allient ( ALNT ) rose more than +9% after JPMorgan Chase upgraded the stock to Overweight from Neutral with a price target of $80.
Autoliv (ALV) rose more than +2% after Handelsbanken upgraded the stock to buy from hold with a price target of $145.
AutoZone (AZO) fell more than -8% to lead losers in the S&P 500 after reporting Q3 net sales of $4.84 billion, below consensus of $4.87 billion. Also, O’Reilly Automotive (ORLY) fell more than -4% to lead the losers on the Nasdaq 100.
Cigna Group ( CI ) fell more than 1% after Barclays downgraded the stock to equal weight from overweight.
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).
As of the date of publication, Rich Asplund did not have (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
