On Thursday the S&P 500 Index ($SPX) (SPY) closed up +0.58%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.05%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.84%. June E-mini S&P futures (ESM26) rose +0.59%, and June E-mini Nasdaq futures (NQM26) rose +0.88%.
Stock indexes recovered from early declines on Thursday and closed higher, with the S&P 500 and Nasdaq 100 climbing to new all-time highs. Stocks rose after Axios reported that the US and Iran have reached an agreement to extend the ceasefire for sixty days and begin negotiations on Iran’s nuclear program, with President Trump still needing to approve the terms. The memorandum of understanding states that shipping through the Strait of Hormuz will be “unrestricted”, with Iran required to remove all mines from the strait within 30 days. Following this news, crude oil prices increased by +3%.
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Stocks fell early on Thursday after crude oil prices surged after fresh US attacks on Iran raised doubts over whether the end of the war is nigh. The US attacked Iranian military targets for the second time this week and Kuwait said it responded to Iranian missile and drone threats.
Shares also received support on Thursday amid Fed-friendly US economic news. The April core PCE price index, the Fed’s favorite inflation gauge, rose as expected. Additionally, new orders for capital goods unexpectedly declined in April, weekly jobless claims rose more than expected, and Q1 GDP was revised downwards. Additionally, sales of new homes fell more than expected in April. The 10-year T-note yield gave up early gains and declined by -2 bp to 4.46%.
US weekly initial unemployment claims rose by +5,000 to 215,000, reflecting a weaker labor market than expected by 211,000.
US personal spending rose +0.5% per month in April, in line with expectations. April personal income was unchanged m/m, weaker than expected by +0.4% m/m.
The US April core PCE price index, the Fed’s preferred inflation gauge, rose +3.3% year-on-year, right on expectations and the biggest increase in 2.5 years.
US April capital goods new orders non-defense ex-aircraft and parts unexpectedly declined -1.1% m/m compared to expectations for a +0.4% m/m increase, the biggest decline in a year.
US Q1 GDP was revised down to +1.6% (q/q annualized), weaker than expectations of no change at +2.0%. Q1 personal consumption was revised downwards to +1.4% from a previously reported +1.6%, and the Q1 core PCE price index was revised downwards to a 3-year high of +4.4% from a previously reported +4.3%.
US new home sales fell -6.2% month on month to 622,000 in April, below expectations of 660,000.
Hawkish Fed comments were negative for stocks and bonds. Fed Governor Lisa Cook said inflation is going in the wrong direction and she would be prepared to raise interest rates if it continues. Additionally, Minneapolis Fed President Neel Kashkari said US consumer prices are still “very high” and reducing inflation is his top priority. Additionally, St. Louis Fed President Alberto Musallem said inflation is meaningfully above target, expectations are rising, and the Fed should respond to higher real rates by hiking policy.
Crude oil prices gave up +3% on Thursday and closed slightly higher after Axios reported that the US and Iran have reached a preliminary agreement to extend the ceasefire for 60 days and begin talks on Iran’s nuclear program. Crude oil prices jumped early on Thursday after the US military shot down four Iranian drones that fired on a commercial ship and attacked a launch site near the Strait of Hormuz. Additionally, the US Treasury added the Persian Gulf Strait Authority to its Iran-related sanctions list to prevent Iran from profiting from ships passing through the Strait of Hormuz by charging tolls. Additionally, Israel stepped up attacks on Lebanon and said its ground forces would advance into the country, potentially complicating US-Iran talks on an interim peace deal.
Markets are discounting a 0% chance of a -25bp FOMC rate cut at the next FOMC meeting on June 16-17.
The typically favorable Q1 earnings season is coming to an end. As of Thursday, 83% of the 482 S&P 500 companies that have reported Q1 earnings have beaten estimates. According to Bloomberg Intelligence, Q1 S&P 500 earnings are projected to increase +12% year over year. Excluding the technology sector, Q1 earnings are projected to grow about +3%, the weakest in two years.
There was a mixed trend in foreign stock markets on Thursday. Euro Stoxx 50 closed down -0.25%. China’s Shanghai Composite recovered from a 5-week low to close +0.12% higher. Japan’s Nikkei stock average closed down -0.47%.
interest rates
June 10-year T-notes (ZNM6) closed at +4.5 ticks on Thursday. The 10-year T-note yield fell -2.8bp to 4.455%. June T-note prices recovered from early losses and hit a 2-week high, and the 10-year T-note yield fell to a 2-week low of 4.432%. T-notes rose on Thursday on Fed-friendly economic news. Weekly unemployment claims rose more than expected, core capital goods orders unexpectedly declined in April, Q1 GDP was revised lower, and the April core PCE price index, the Fed’s favorite inflation gauge, rose as expected. Additionally, sales of new homes fell more than expected in April. T-notes maintained their gains on solid demand for the Treasury’s $44 billion auction of 7-year T-notes, which had a bid-to-cover ratio of 2.52, better than the 10-auction average of 2.50.
T-notes initially traded lower on Thursday after WTI crude oil prices rose more than +3%, boosting inflation expectations. Additionally, sharp comments from Fed Governor Lisa Cook, St. Louis Fed President Alberto Musallem and Minneapolis Fed President Neel Kashkari cut T-note prices as they expressed concerns about persistently high inflation.
European government bond yields edged lower on Thursday. The 10-year German Bund yield fell -2.5bp to 2.962%. 10-year UK gilt yields fell to a 5-week low of 4.791% and ended -4.4bp at 4.814%.
The Eurozone May economic sentiment indicator rose +0.3 to 93.5, stronger than expected with no change at 93.0.
ECB chief economist Philip Lane said the impact of the Iran war would take longer to be seen on the labor market, and that a “second round” of energy shocks to the eurozone would continue for some time.
Swaps are discounting an 89% chance of a +25bp ECB rate hike at their next policy meeting on June 11.
US Stock Movers
Chipmakers and AI-infrastructure stocks rose on Thursday, leading the broader market. ARM Holdings PLC (ARM) closed up more than +11%, and Advanced Micro Devices (AMD) and Qualcomm (QCOM) closed up more than +4%. Additionally, Sandisk (SNDK) and Marvell Technology (MRVL) closed up more than +3%, and Seagate Technology Holdings PLC (STX) and Broadcom (AVGO) closed up more than +1%.
Drone-related stocks surged Thursday after the Wall Street Journal reported that the Trump administration is exploring funding deals with a group of drone companies. Unusual Machines (UMAC) closed up more than +59%, and Red Cat (RCAT) closed up more than +34%. Additionally, AIRO Group Holdings (AIRO) closed up more than +21%, and AeroVironment (AVAV) and Kratos Defense & Security Solutions (KTOS) closed up more than +14%.
Snowflake (SNOW) closed up more than +36% after reporting Q1 revenue of $1.39 billion, better than the consensus of $1.33 billion and raised its 2027 product revenue forecast to $5.84 billion from the previous estimate of $5.66 billion, well above the consensus of $5.68 billion.
Dollar Tree (DLTR) closed up more than +17% to lead the S&P 500 after reporting Q1 adjusted EPS of $1.74, stronger than the consensus of $1.55, and raised its 2027 adjusted EPS estimate to $6.70 to $7.10 from a previous estimate of $6.50 to $6.90, which is $6.69. is above the consensus.
Agilent (A) closed up more than +16% after raising its full-year revenue forecast to $7.39 billion-$7.49 billion, compared to its previous estimate of $7.3 billion-$7.5 billion yuan, topping the $7.39 billion consensus.
Best Buy (BBY) closed up more than +15% after second-quarter comparable sales were estimated to grow +1.00%, stronger than the consensus down -0.32%.
Hormel Foods (HRL) closed up more than +12% after reporting an adjusted operating margin of 9.9% in the second quarter, stronger than the consensus of 8.9%.
Heiko (HEI) closed up more than +11% after reporting second-quarter net sales of $1.38 billion, well above the consensus estimate of $1.25 billion.
CarGurus Inc. (CARG) closed up more than +4% after Barclays initiated coverage on the stock with an Overweight recommendation and a price target of $35.
Photoronix (PLAB) closed down more than -36% after forecasting Q3 adjusted EPS of 39 cents to 45 cents, weaker than the consensus of 54 cents.
Symbiotic (SYM) closed down more than -9% after SoftBank Group was said to have sold 5.6 million shares of its stake in SYM in an unregistered block trade at between $51 and $53.63 per share.
Tyson Foods (TSN) closed down more than -6% after CEO King announced he was stepping down after five years.
The Trade Desk (TTD) closed down more than 5% after Rothschild & Co. Redburn reinstated coverage of the stock with a sell recommendation and a price target of $11.
HP Inc. (HPQ) closed down more than -2% after cutting the upper end of its full-year EPS estimate to $2.90-$3.10 from a previous view of $2.90-$3.20, citing rising memory and storage costs.
Earnings Report(5/29/2026)
American Woodmark Corp (AMWD), Atlantic International Corp (ATLN), Buckle Inc/The (BKE), Critical Metals Corp (CRML), Genesco Inc (GCO), Liberty Live Holdings Inc (LLYVA), Navon Inc (NAVN), Pioneer Bancorp Inc/NY (PBFS), RichTech Robotics Inc (RR), Whitestone REIT (WSR).
On the date of publication, Rich Asplund did not have (directly or indirectly) any positions in any securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy here for more information.
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