Stocks Settle Mixed Ahead of Megacap Tech Earnings

The S&P 500 Index ($SPX) (SPY) on Wednesday closed down -0.04%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.57%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.58%.  June E-mini S&P futures (ESM26) fell -0.07%, and June E-mini Nasdaq futures (NQM26) rose +0.50%.

Stock indexes settled mixed on Wednesday, with the Dow Jones Industrials falling to a 1.5-week low.  Soaring crude oil prices boosted inflation expectations and bond yields, and were negative for stocks.  WTI crude oil surged to a 3-week high on Wednesday after the US signaled it will maintain its naval blockade of Iran for the foreseeable future.  The Wall Street Journal reported that President Trump told his aides to prepare for an extended blockade and that it carries less of a risk for the US than resuming hostilities or walking away from the conflict without securing a deal that curbs Iran’s nuclear activities. 

The broader market came under pressure on Wednesday after three FOMC members dissented in favor of no easing bias in the FOMC ‘s decision to keep policy unchanged.  Also, hawkish comments from Fed Chair Powell weighed on stocks, as he said a bit of monetary policy restraint is the right place to be.  The 10-year T-note yield rose +6 bp to a 1-month high of 4.41%.

The Nasdaq 100 moved higher on Wednesday as technology stocks rallied on signs that demand for AI infrastructure remains strong.  NXP Semiconductors NV rose +25%, and Seagate Technology Holdings Plc rose by more than +10% to lead chipmakers and AI infrastructure stocks higher after reporting stronger-than-expected earnings results.  The markets are awaiting earnings from four of the Magnificent Seven technology stocks after Wednesday’s close, as Alphabet, Amazon, Microsoft, and Meta Platforms will report quarterly results.

Wednesday’s US housing starts and core capital goods new orders reports were better than expected, a supportive factor for stocks.

US MBA mortgage applications fell -1.6% in the week ended April 24, with the purchase mortgage sub-index up +1.2% and the refinancing sub-index down -4.4%.  The average 30-year fixed rate mortgage rose by +2 bp to 6.37% from 6.35% in the prior week.

US Mar housing starts unexpectedly rose +10.8% m/m to a 15-month high of 1.502 million, stronger than expectations of a decline to 1.380 million. Mar building permits, a proxy for future construction, fell -10.8% m/m to a 7-month low of 1.372 million, weaker than expectations of 1.390 million.

US Mar capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +3.3% m/m, stronger than expectations of +0.5% m/m and the largest increase in 5.75 years.

WTI crude oil prices (CLM26) soared by more than +6% on Wednesday as the US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire.  The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis, as flows of crude, natural gas, and oil products from the Persian Gulf have been cut off since the war began in late February.  Crude prices raced to their highs on Wednesday after President Trump told Axios that he will not lift a naval blockade of Iran's ports until he secures a deal with Iran to address the country's nuclear program.  The ongoing blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait.  Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, or more than 50%, so far in April, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June.

As expected, the FOMC kept the fed funds target rate unchanged at 3.50% to 3.75%.  The vote was 8-4 in favor of the decision, with Fed Governor Miran dissenting in favor of a -25 bp rate cut.  Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan said they "supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time."

The post-meeting statement said, "Developments in the Middle East are contributing to a high level of uncertainty."  Also, "job gains have remained low, on average," and the jobless rate "has been little changed in recent months, while inflation "is elevated, in part reflecting the recent increase in global energy prices."

Fed Chair Powell said policymakers think the policy stance is in a very good place to wait, as inflation is kind of misbehaving, and that maybe a little bit of restriction in monetary policy is the right place to be. 

Kevin Warsh won the banking confirmation vote of the Senate Banking Committee on Wednesday, putting him on track to be confirmed as Fed Chair by the full Senate before Jerome Powell’s term ends on May 15.  Fed Chair Powell said after Wednesday’s FOMC meeting that he will continue to serve as Fed Governor “for a period of time to be determined.”  Mr. Powell’s seat on the Board of Governors doesn’t expire until 2028.

The markets are discounting a 0% chance for a +25 bp FOMC rate cut or a rate hike at the next FOMC meeting on June 16-17.

Earnings season ramps up this week with several Magnificent Seven technology stocks reporting.  Earnings results thus far have been supportive of stocks.  As of Wednesday, 81% of the 220 S&P 500 companies that reported Q1 earnings have beaten estimates.  Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence.  Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.

Overseas stock markets settled mixed on Wednesday.  The Euro Stoxx 50 fell to a 3-week low and closed down -0.34%.  China's Shanghai Composite closed up +0.71%.  Japan's Nikkei Stock Average did not trade, as markets in Japan were closed for the Showa Day holiday.

Interest Rates

June 10-year T-notes (ZNM6) on Wednesday closed down -16 ticks.  The 10-year T-note yield rose +5.5 bp to 4.4010%.  Jun T-notes fell to a 4-week low, and the 10-year T-note yield rose to a 1-month high of 4.430%.  T-notes were under pressure on Thursday amid rising crude oil prices, as WTI surged more than +6% to a 32-week high, boosting inflation expectations.  The 10-year breakeven inflation rate rose to 1 14.5-month high of 2.479% on Wednesday.  T-notes were also pressured by stronger-than-expected US economic reports on Mar housing starts and Mar core capital goods new orders.

T-notes sank to their lows on Wednesday afternoon after three FOMC members dissented in favor of a no-easing bias in the committee’s policy decision. Also, Fed Chair Powell said a little bit of restriction in monetary policy is the right place to be. 

European government bond yields moved higher on Wednesday.  The 10-year German bund yield rose to a 1-month high of 3.118% and finished up +4.3 bp to 3.110%.  The 10-year UK gilt yield climbed to a 1-month high of 5.078% and finished up +6.5 bp to 5.071%.

Eurozone Apr economic confidence fell -3.2 to a nearly 5.5-year low of 93.0, weaker than expectations of 95.1.

Eurozone Mar M3 money supply rose +3.2% y/y, stronger than expectations of +3.1% y/y.

Swaps are discounting a 12% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.

US Stock Movers

NXP Semiconductors NV (NXPI) closed up more than +25% to lead chipmakers and AI infrastructure stocks higher after forecasting Q2 revenue of $3.35 billion to $3.55 billion, stronger than the consensus of $3.27 billion.  Intel (INTC) closed up more than +12%, and Seagate Technology Holdings Plc (STX) closed up +11% after forecasting Q4 adjusted EPS of $4.80 to $5.20, well above the consensus of $3.96.  Also, Sandisk (SNDK) and Microchip Technology (MCHP) closed up more than +6%, and Western Digital (WDC) closed up more than +5%. In addition, Advanced Micro Devices (AMD) and Qualcomm (QCOM) closed up more than +4%, and Micron Technology (MU) and Marvell Technology (MRVL) closed up more than +2%. 

Energy producers and service providers rallied on Wednesday after WTI crude oil rose more than +6% to a 3-week high.  Phillips 66 (PSX) closed up more than +5%, and APA Corp (APA) and Valero Energy (VLO) closed up more than +4%.  Also, Marathon Petroleum (MPC), Occidental Petroleum (OXY), Devon Energy (DVN), and ConocoPhillips (COP) closed up more than +3%, and  Diamondback Energy (FANG), Exxon Mobil (XOM), Halliburton (HAL), and Chevron (CVX) closed up more than +2%.

Airlines and cruise line operators were under pressure on Wednesday as WTI crude oil rose more than +6% to a 2-week high.  Alaska Air Group (ALK) closed down more than -3%, and American Airlines Group (AAL), Southwest Airlines (LUV), and Carnival (CCL) closed down more than -2%.  Also, United Airlines Holdings (UAL) andDelta Air Lines (DAL) closed down more than -1%.

Bloom Energy (BE) closed up more than +27% after boosting its full-year revenue forecast to $3.4 billion to $3.8 billion from a prior forecast of $3.1 billion to $3.3 billion, above the consensus of $3.25 billion.  

Generac Holdings (GNRC) closed up more than +16% after reporting Q1 net sales of $1.06 billion, better than the consensus of $1.05 billion.

Rush Street Interactive (RSI) closed up more than +16% after forecasting full-year revenue between $1.49 billion and $1.54 billion, better than the consensus of $1.38 billion. 

Visa (V) closed up more than +8% to lead gainers in the Dow Jones Industrials after reporting Q2 net revenue of $11.23 billion, stronger than the consensus of $10.74 billion.

Starbucks (SBUX) closed up more than +8% after reporting Q2 comparable sales were up +6.20%, well above the consensus of +3.65%, and raised its full-year comparable sales forecast to at least +5% from a prior view of at least +3%. 

General Dynamics (GD) closed up more than +7% after reporting Q1 revenue of $13.48 billion, well above the consensus of $12.70 billion. 

Teradyne (TER) closed down more than -19% to lead losers in the S&P 500 after forecasting Q2 revenue of $1.15 billion to $1.25 billion, failing to exceed the consensus of $1.20 billion meaningfully. 

GE Healthcare (GEHC) closed down more than -13% to lead losers in the Nasdaq 100 after cutting its full-year adjusted EPS forecast to $4.80 to $5.00 from a previous forecast of $4.95 to $5.15, weaker than the consensus of $5.06. 

Robinhood Markets (HOOD) closed down more than -13% after reporting Q1 net revenue of $1.07 billion, below the consensus of $1.14 billion. 

Brown-Forman (BF.B) closed down more than -10% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $23. 

CoStar Group (CSGP) closed down more than -5% after forecasting full-year revenue of $3.78 billion to $3.82 billion, the midpoint below the consensus of $3.81 billion. 

Ingersoll Rand (IR) closed down more than -4% after forecasting full-year organic revenue to climb 0% to +2%, the midpoint below the consensus of +1.44%.

Earnings Reports(4/30/2026)

A O Smith Corp (AOS), Air Products and Chemicals Inc (APD), Alliant Energy Corp (LNT), Altria Group Inc (MO), American International Group Inc (AIG), AMETEK Inc (AME), Amgen Inc (AMGN), Apple Inc (AAPL), Arthur J Gallagher & Co (AJG), Baxter International Inc (BAX), Bristol-Myers Squibb Co (BMY), Broadridge Financial Solutions (BR), Builders FirstSource Inc (BLDR), Camden Property Trust (CPT), Cardinal Health Inc (CAH), Carrier Global Corp (CARR), Caterpillar Inc (CAT), Cigna Group/The (CI), Clorox Co/The (CLX), ConocoPhillips (COP), CRH PLC (CRH), Dexcom Inc (DXCM), DTE Energy Co (DTE), Eli Lilly & Co (LLY), First Solar Inc (FSLR), Fortive Corp (FTV), GoDaddy Inc (GDDY), Hershey Co/The (HSY), Hubbell Inc (HUBB), Illinois Tool Works Inc (ITW), Intercontinental Exchange Inc (ICE), International Paper Co (IP), Iron Mountain Inc (IRM), Kimco Realty Corp (KIM), L3Harris Technologies Inc (LHX), Labcorp Holdings Inc (LH), Martin Marietta Materials Inc (MLM), Mastercard Inc (MA), Merck & Co Inc (MRK), Molson Coors Beverage Co (TAP), Monolithic Power Systems Inc (MPWR), Parker-Hannifin Corp (PH), Quanta Services Inc (PWR), ResMed Inc (RMD), Royal Caribbean Cruises Ltd (RCL), Sandisk Corp/DE (SNDK), Smurfit Westrock PLC (SW), Southern Co/The (SO), Stryker Corp (SYK), T Rowe Price Group Inc (TROW), Textron Inc (TXT), Trane Technologies PLC (TT), Valero Energy Corp (VLO), Western Digital Corp (WDC), Weyerhaeuser Co (WY), Willis Towers Watson PLC (WTW), Xcel Energy Inc (XEL).