June S&P 500 E-Mini futures (ESM26) are up +0.36%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.56% this morning as optimism surrounding artificial intelligence and hopes for a U.S.-Iran peace deal boosted sentiment.
The price of WTI crude fell over -4% on Wednesday amid optimism that the U.S. and Iran are close to reaching a deal to fully reopen the Strait of Hormuz. Tehran has indicated that recent U.S. strikes on Iranian targets would not derail talks. U.S. Secretary of State Marco Rubio said on Tuesday it could take a few days to finalize details of a potential agreement.
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Treasuries extended their rebound as lower oil prices eased inflation concerns, with the 10-year yield falling three basis points to 4.47%.
Market participants are now awaiting remarks from Federal Reserve officials and earnings reports from several high-profile companies.
In yesterday’s trading session, Wall Street’s major indexes closed mostly higher, with the S&P 500 and Nasdaq 100 notching new all-time highs. Chip and AI infrastructure stocks rallied, led by a more than +19% jump in Micron Technology (MU) after UBS raised its price target on the stock to a Street-high $1,625. Also, shares of rocket and satellite companies soared as investor enthusiasm for the sector intensified after SpaceX filed for a public offering last week, with Redwire Corp. (RDW) surging over +26% and AST SpaceMobile (ASTS) climbing more than +13%. In addition, travel stocks advanced, with American Airlines (AAL) rising over +7% and United Airlines (UAL) gaining more than +5%. On the bearish side, AutoZone (AZO) slumped about -9% and was the top percentage loser on the S&P 500 after the car-parts retailer posted weaker-than-expected FQ3 revenue.
Economic data released on Tuesday showed that both consumer confidence and home price growth continued to soften. The U.S. Conference Board’s consumer confidence index fell to 93.1 in May, a smaller decline than expectations of 91.9. Separately, the U.S. March S&P/CS HPI Composite - 20 n.s.a. rose +0.8% y/y, easing from February’s +0.9% y/y gain and coming in below the +0.9% y/y consensus.
“Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” according to CB’s chief economist Dana Peterson.
Meanwhile, Goldman Sachs raised its 2026 year-end forecast for the S&P 500 index to 8,000 from 7,600, citing continued strength in corporate earnings. “Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic to continue in the coming months,” Goldman Sachs said.
Today, market participants will parse comments from Fed Vice Chair Philip Jefferson, Fed Governor Lisa Cook, and Chicago Fed President Austan Goolsbee.
Investors will also monitor earnings reports from several prominent companies, with Marvell Technology (MRVL), Salesforce (CRM), Synopsys (SNPS), Snowflake (SNOW), and HP Inc. (HPQ) scheduled to report their quarterly results today.
On the economic data front, investors will focus on the U.S. Richmond Fed Manufacturing Index, which is set to be released in a couple of hours. Economists foresee this figure coming in at 4 in May, compared to the previous value of 3.
U.S. rate futures have priced in a 98.8% probability of no rate change and a 1.2% chance of a 25 basis point rate cut at the next FOMC meeting in June.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.47%, down -0.56%.
The Euro Stoxx 50 Index is up +0.69% this morning, buoyed by gains in auto and chemical stocks as well as lower oil prices. Brent crude oil fell below $94 a barrel on optimism that talks to reopen the Strait of Hormuz were progressing despite recent attacks. Automobile stocks outperformed on Wednesday. The sector got a boost after data showed that registrations in the European Union, Britain, and the European Free Trade Association increased 7% in April. Chemical stocks also climbed, with Akzo Nobel (AKZA.NA) jumping over +16% after the paint maker rejected a joint cash takeover bid of 73 euros per share from rivals Nippon Paint and Sherwin-Williams. Data from Insee released on Wednesday showed that French consumer confidence fell in May to its lowest level since March 2023 as uncertainty and surging energy prices stemming from the Middle East conflict continued to weigh on household sentiment. The European Central Bank, in its twice-yearly report on the Eurozone’s financial system, said on Wednesday that investors underestimate the risk they face from the Middle East conflict and rising government debts. “A more persistent disruption of energy supply and notably weaker growth could trigger a reassessment of sovereign risk by market participants,” the ECB said. Meanwhile, the German Council of Economic Experts on Wednesday lowered its 2026 growth forecast for the German economy to 0.5% from a November projection of 0.9%. In other news, Reuters reported that European Union governments approved legislation on Wednesday to eliminate import duties on many U.S. goods, a move that should head off U.S. President Trump’s threat of higher tariffs on EU cars and other products.
France’s Consumer Confidence data was released today.
The French May Consumer Confidence stood at 82, weaker than expectations of 83.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.25%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.01%.
China’s Shanghai Composite Index closed sharply lower today, dragged down by weakness in AI-related and property stocks. Chip and other AI-related stocks slumped on Wednesday as investors locked in profits following a recent rally. Property stocks also sank. The drop came even after official data showed that China’s industrial profits grew in April at the fastest rate since November 2023, bolstered by higher energy prices and resilient overseas demand for technology products. Profits at China’s industrial firms climbed 24.7% last month from a year earlier, accelerating sharply from a 15.8% increase in March, according to the National Bureau of Statistics. ING economist Lynn Song described the figures as encouraging, saying 2026 could mark the first year of positive industrial profit growth since 2022, but noted that the gains appear to be sector-driven rather than broad-based. In other news, Reuters reported on Wednesday that Hong Kong’s securities regulator has raided the local units of two major Chinese brokerages as it probes suspected misconduct related to share offerings. In corporate news, Lenovo rose over +4% in Hong Kong, extending gains after its blowout results last Friday prompted investors to reassess its prospects beyond personal computers amid the AI boom.
Japan’s Nikkei 225 Stock Index erased earlier gains and closed just above the flatline today as investors grew cautious about the rapid advance in AI-related stocks. The Nikkei initially climbed as much as 2.2% to reach a new record high, tracking a tech-led rally on Wall Street overnight, but later gave up those gains as investors took profits in AI-related stocks. Tech investor SoftBank Group slid over -7%, weighing heavily on the benchmark index. Data released on Wednesday showed that a key measure of Japan’s service-sector inflation rose 3.0% in April from a year earlier, reinforcing the Bank of Japan’s view that a tight labor market is prompting firms to pass rising costs on to consumers. Meanwhile, Japanese government bond yields fell on Wednesday as investors awaited clearer signals on when the BOJ will raise interest rates, while stronger demand for debt supported the super-long end. BOJ Governor Kazuo Ueda said earlier in the day that central banks should not view oil prices in isolation, as a temporary energy shock can become persistent if it feeds into wages, expectations, and price-setting behavior. However, Ueda stopped short of offering any clues on the timing of the BOJ’s next rate hike. In corporate news, Fujitsu rose over +4% after announcing a strategic partnership with Anthropic to advance AI integration for Japanese businesses. Investor focus for the remainder of the week is on a raft of Japan’s economic data, which will provide clues on the impact of the Middle East conflict. The government is set to release Tokyo Core CPI for May, along with April figures for industrial production, retail sales, and employment. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +6.06% to 31.14.
The Japanese April Corporate Services Price Index rose +3.0% y/y, weaker than expectations of +3.3% y/y.
Pre-Market U.S. Stock Movers
Chip stocks advanced in pre-market trading, with Micron Technology (MU) and Marvell Technology (MRVL) climbing over +5%.
Tesla (TSLA) rose nearly +2% in pre-market trading after European sales data showed the EV maker sold 10,654 cars in April, marking a 46.5% year-over-year increase.
FedEx (FDX) gained more than +1% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $460.
Zscaler (ZS) cratered over -23% in pre-market trading after the cybersecurity company issued below-consensus FQ4 revenue guidance.
GlobalFoundries (GFS) sank more than -7% in pre-market trading after Bloomberg News reported that majority owner Mubadala Investment Company was looking to raise $1.91 billion through an unregistered block sale of GFS shares.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - May 27th
Marvell Technology (MRVL), Salesforce (CRM), Synopsys (SNPS), Snowflake (SNOW), HEICO (HEI), Agilent Technologies (A), Everpure (P), HP Inc. (HPQ), DICK’S Sporting Goods (DKS), Arxis (ARXS), Nutanix (NTNX), Dycom Industries (DY), U-Haul Holding Company (UHAL), U-Haul Holding Company (UHAL.B), Bath & Body Works (BBWI), Abercrombie & Fitch Co. (ANF), Braze (BRZE), American Superconductor (AMSC), Capri Holdings (CPRI), nCino (NCNO), Movado Group (MOV), Mesa Laboratories (MLAB), Phreesia (PHR), Monro (MNRO), Sound Point Meridian Capital (SPMC).
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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