June S&P 500 E-Mini futures (ESM26) are up +0.41%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.57% this morning, supported by lower oil prices as the ceasefire in the Middle East appeared to be holding.
The U.S.-Iran ceasefire has been tested after Tehran opened fire on American warships on Monday amid a U.S. initiative to restore shipping in the Strait of Hormuz. After Iran launched cruise missiles and other projectiles at U.S. warships and commercial vessels, U.S. Central Command said it deployed Apache helicopters to sink the Iranian speedboats that were disrupting traffic in the strait. President Trump said that Defense Secretary Pete Hegseth would host a press conference on Tuesday. Meanwhile, CBS reported that U.S. destroyers USS Truxtun and USS Mason passed through the strait.
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The price of WTI crude fell over -2% on Tuesday, paring some of Monday’s surge as relative calm returned to the Persian Gulf. Market participants also took comfort in the ongoing diplomatic efforts to resolve the U.S.-Iran impasse, with Iranian Foreign Minister Abbas Araghchi saying that negotiations with the Americans were “making progress.”
Investors are now awaiting a fresh batch of corporate earnings reports, comments from Federal Reserve officials, and a raft of U.S. economic data, with particular attention on job openings figures.
In yesterday’s trading session, Wall Street’s main stock indexes ended in the red. United Parcel Service (UPS) sank over -10% to lead losers in the S&P 500 and FedEx (FDX) slid more than -9% after Amazon unveiled a rival business called Amazon Supply Chain Services. Also, most chip stocks retreated, with Advanced Micro Devices (AMD) falling over -5% and Qualcomm (QCOM) dropping more than -4%. In addition, Norwegian Cruise Line Holdings (NCLH) plunged over -8% after the cruise line operator cut its full-year adjusted EPS guidance, citing “headwinds related to disruptions in the Middle East.” On the bullish side, shares of flash memory suppliers rallied, with Micron Technology (MU) climbing more than +6% to lead gainers in the Nasdaq 100, and SanDisk (SNDK) rising over +5%.
“Judging by last week, the market’s recipe for near-term upside will be sidestepping negative surprises out of the Middle East to allow what has been a stronger-than-average earnings season to continue to dominate sentiment,” said Chris Larkin at E*Trade from Morgan Stanley.
Economic data released on Monday showed that U.S. factory orders rose +1.5% m/m in March, stronger than expectations of +0.5% m/m and the largest increase in four months.
New York Fed President John Williams said on Monday that the U.S. central bank’s current policy stance strikes a balance between risks to price stability and full employment amid “notable” supply-chain disruptions stemming from the Middle East conflict. “The elevated levels of inflation, mixed signals from the labor market, and heightened uncertainty from the Middle East conflict present an unusual set of circumstances, but the current stance of monetary policy is well-positioned to balance the risks,” Williams said.
Meanwhile, U.S. rate futures have priced in a 95.8% probability of no rate change and a 4.2% chance of a 25 basis point rate cut at the next central bank meeting in June.
First-quarter corporate earnings season rolls on, with investors anticipating fresh reports from major companies today, including Advanced Micro Devices (AMD), Arista Networks (ANET), Shopify (SHOP), and Pfizer (PFE). All eyes will be on Advanced Micro Devices’ forecast, which will provide fresh clues on whether the AI spending spree is sustainable. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +12% increase in quarterly earnings for Q1 compared to the previous year, marking the sixth consecutive quarter of double-digit growth.
On the economic data front, investors will focus on U.S. JOLTs Job Openings figures, set to be released in a couple of hours. Economists, on average, forecast that March JOLTs Job Openings will arrive at 6.860 million, compared to the February figure of 6.882 million.
The U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will also be closely monitored today. Economists expect the April ISM services index to be 53.7 and the S&P Global services PMI to be 51.3, compared to the previous values of 54.0 and 49.8, respectively.
U.S. New Home Sales data for March will be reported today. Notably, the release will also incorporate the February figures. Economists expect March’s new home sales to be 652K.
U.S. Trade Balance data will be released today as well. Economists forecast that the trade deficit will widen to -$61 billion in March from -$57.3 billion in February.
In addition, market participants will be looking toward speeches from Fed Vice Chair for Supervision Michelle Bowman and Fed Governor Michael Barr.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.43%, down -0.32%.
The Euro Stoxx 50 Index is up +1.24% this morning, rebounding from yesterday’s sell-off as oil prices eased, with the ceasefire in the Middle East appearing to hold. Sentiment was also buoyed by a string of upbeat corporate earnings reports. Technology stocks led the gains on Tuesday. Food and beverage stocks also climbed, led by a more than +6% gain in Anheuser-Busch InBev (ABI.B.DX) after the Belgian beer maker reported better-than-expected quarterly results. In addition, automobile stocks advanced. Government data released on Tuesday showed that Switzerland’s annual inflation rate doubled in April, climbing to its highest level in nearly 1-1/2 years as the Middle East conflict drove up imported energy costs. Petroleum product prices in Switzerland rose 17% on the year, with inflation also lifted by higher air transport fares and international package holidays, according to the Federal Statistical Office. Meanwhile, Eurozone government bond yields fell on Tuesday as a pullback in oil prices calmed fears of an inflation shock that could force central bankers to hike interest rates. In other corporate news, Intertek (ITRK.LN) surged over +7% after Swedish buyout firm EQT said it had submitted an improved takeover offer for the company, valuing it at 8.93 billion pounds ($12.08 billion). Also, Hugo Boss (BOSS.D.DX) rose more than +5% after the German fashion group posted stronger-than-expected quarterly operating profit. At the same time, HSBC (HSBA.LN) slumped over -5% after reporting an unexpected $400 million loss tied to a fraud case in Britain that led to weaker-than-expected Q1 profit.
Switzerland’s CPI data was released today.
Switzerland’s April CPI rose +0.3% m/m and +0.6% y/y, in line with expectations.
Financial markets in Japan and mainland China were closed for holidays.
China’s Shanghai Composite Index was closed today for the Labor Day holiday. Mainland China’s financial markets will reopen tomorrow.
Japan’s Nikkei 225 Stock Index was closed today for the Children’s Day holiday. Financial markets in Japan will remain closed on Wednesday for the Constitution Memorial Day holiday. The markets will reopen on Thursday.
Pre-Market U.S. Stock Movers
Pinterest (PINS) jumped over +16% in pre-market trading after the social-media platform posted upbeat Q1 results and issued above-consensus Q2 revenue guidance.
Intel (INTC) rose over +3% in pre-market trading after Bloomberg reported that Apple had held exploratory talks with the company and Samsung Electronics about manufacturing the main processors for its devices in the U.S.
Applied Materials (AMAT) rose over +2% and Lam Research (LRCX) gained more than +1% in pre-market trading after Seaport Research initiated coverage of the stocks with Buy ratings and price targets of $500 and $300, respectively.
Ulta Beauty (ULTA) advanced more than +2% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a $685 price target.
Palantir Technologies (PLTR) slid more than -2% in pre-market trading after the data-wrangling software developer reported weaker-than-expected Q1 U.S. commercial sales.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - May 5th
Advanced Micro Devices (AMD), Arista Networks (ANET), Shopify (SHOP), Eaton Corporation (ETN), Pfizer (PFE), Duke Energy (DUK), KKR & Co. (KKR), Cummins (CMI), Suncor Energy (SU), Emerson Electric Co. (EMR), EOG Resources (EOG), Marathon Petroleum (MPC), American Electric Power Company (AEP), Lumentum Holdings (LITE), Energy Transfer LP (ET), TransDigm Group (TDG), Strategy (MSTR), Occidental Petroleum (OXY), MPLX LP (MPLX), Corteva (CTVA), Cameco (CCJ), Electronic Arts (EA), Rockwell Automation (ROK), PayPal Holdings (PYPL), IDEXX Laboratories (IDXX), Public Service Enterprise Group (PEG), WEC Energy Group (WEC), GLOBALFOUNDRIES (GFS), Archer-Daniels-Midland Company (ADM), Live Nation Entertainment (LYV), Astera Labs (ALAB), Prudential Financial (PRU), Fiserv (FISV), Devon Energy (DVN), Ameren (AEE), Waters (WAT), IQVIA Holdings (IQV), Pan American Silver (PAAS), Leidos Holdings (LDOS), DuPont de Nemours (DD), Expeditors International of Washington (EXPD), UL Solutions (ULS), International Flavors & Fragrances (IFF), Talen Energy (TLN), Super Micro Computer (SMCI), Ball Corporation (BALL), Jacobs Solutions (J), Onto Innovation (ONTO), Westlake (WLK), Huntington Ingalls Industries (HII), Aptiv (APTV), Jazz Pharmaceuticals (JAZZ), TopBuild (BLD), Hecla Mining Company (HL), Solventum (SOLV), Healthpeak Properties (DOC), Assurant (AIZ), Exelixis (EXEL), Jack Henry & Associates (JKHY), DigitalOcean Holdings (DOCN), Leonardo DRS (DRS), Skyworks Solutions (SWKS), DaVita (DVA), Primoris Services (PRIM), Gartner (IT), Tempus AI (TEM), IAMGOLD (IAG), Revvity (RVTY), Lumen Technologies (LUMN), Sunoco LP (SUN), Masimo (MASI), Procore Technologies (PCOR), Joby Aviation (JOBY), Match Group (MTCH), AGCO Corporation (AGCO), Qorvo (QRVO), Chord Energy (CHRD), Henry Schein (HSIC), Cytokinetics (CYTK), Jackson Financial (JXN), Celanese (CE), Everus Construction Group (ECG), Voya Financial (VOYA), Cipher Digital (CIFR), Klaviyo (KVYO), Janus Living (JAN), Terreno Realty (TRNO), Ingredion (INGR), Archrock (AROC), Southwest Gas Holdings (SWX), Repligen (RGEN), SSR Mining (SSRM), California Resources (CRC), Enact Holdings (ACT), Enpro (NPO), Life Time Group Holdings (LTH), Rhythm Pharmaceuticals (RYTM), GXO Logistics (GXO), Alkermes (ALKS), Credit Acceptance (CACC), National Storage Affiliates Trust (NSA), Compass (COMP), Mercury General (MCY), IPG Photonics (IPGP), Comstock Resources (CRK), Knife River (KNF), Sphere Entertainment Co. (SPHR), KBR, Inc. (KBR).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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