STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 5/27/26 (a/o 2:00 pm)
DOW 50,696 (+234), S&P 500 7,526 (+7), Russell 2000 2,925 (+4), NYSE FANG+ 9,464 (-36), ICE Brent Crude $94.57/barrel (-$5.01), Gold $4,451/oz (-$51), Bitcoin ~74.8k (-986)
- MOU still TBD
- Turning memories into Trillions
- S&P flat; Consumer groups leading; Tech taking a breather
- Crude lower
- Check out some of the recent ICE Data/Content:
- Inside the ICE House
- Episode 534: Apex CEO Ian Cinnamon on the Space Race, Satellite Buses, and Orbital Platforms
- ETF Central: FLX Networks Founder and CEO Brian Moran
- NYSE Research Insights: Behind the Record Volumes: A Hidden Opportunity
- ICE Mortgage Monitor: Delinquencies Hold Steady in April
- Market Story Lines
MAC Desk Commentary:
Yesterday equities came out of the long weekend by hitting new all-time highs. The hopes for a diplomatic resolution in Iran prevailed pushed equites higher despite the US conducting “self-defense” strikes. Oil prices fell which helped Treasury yields pull back. The S&P 500 was up 0.6% closing back over 7,500 while small/midcap indices were up ~1.5%. The strength in memory stocks and to a somewhat lesser extent chips overall was the big story with Micron surging nearly 20% and clearing a $1T market capitalization following a UBS PT increase. That drove the DRAM memory ETF to surge 15% while the NYSE Semi Index +6.2% and ~90% YTD). The speculative juices were flowing with space stocks surging (UFO and MARS ETFs +6 to 7%) and strength in other popular thematic trades like nuclear and rare earths. Quantum stocks paused after surging in the previous two sessions.
Earlier this morning futures were pulling back from their overnight highs but jumped before the Open after Iran State TV released details of a draft MOU, including the withdrawal of US military forces and the lift of the blockade while Iran would restore the number of commercial ships moving through the Strait to pre-war levels within 1 month. However there was a heavy dose of skepticism as well, with no mention of enriched uranium and the suggestion of tolling the Strait, which have been redlines for the administration. Futures fell from that knee-jerk reaction high and the S&P 500 opened around flat, where we are currently, just above 7500. The equal-weight and small caps are about inline while the Dow outperforms slightly and Transports (airlines) lead. After the open the White House corroborated the skepticism, calling the MOU news a fabrication and said “nobody should believe Iran state media reporting" in a social media post.
Both consumer groups are leading today. The Automakers are solidly higher and Travel/Leisure names are trading well, including gaming with MGM +10% on sell-side upgrades. Retail earnings were mixed (BBWI/ANF trading higher, DKS/CPRI is trading lower). Staples are higher across-the-board. The other sectors with gains are up marginally. Energy, Financials, Utilities and Tech are the laggards today. Energy on the oil move. The high-flying tech groups are taking a breather (NYSE Semis, IGV down 1-2%). DRAM was lower but is not around unchanged. Throw cybersecurity in there as well, with ZS getting rocked today, down 30% despite solid numbers. A lower than expected ARR guide and lower FCF is pressuring shares. Regarding the FCF, the company is pulling forward capex to get ahead of rising costs of memory and data center equipment- something to keep an eye on in the broader narrative. Two big names in software, CRM and SNOW, report after the clos, along with HPQ and MRVL.
President Trump spoke during a Cabinet meeting around noon and said they continue to negotiate with Iran, which is “on fumes” and either he will get a deal that is satisfactory or he won’t and “we’ll have to finish the job.” On Hormuz, he said it's international waters and nobody’s going to control it. Secretary of State Marco Rubio added that diplomacy is always the first option, and that “Iran can never have a nuclear weapon.” In response to a question about Oman and Iran controlling the Strait (as some reports mentioned) Trump said that Oman will behave “or we’ll blow them up.”
Moving to economic data, it's relatively modest today. The ADP weekly employment change fell from 40.75k last week to 35.75k but was still a solid print. The Richmond Fed Manufacturing Index for May improved from last month. All three subcomponents of the headline index (shipments, new orders and employment) rose from last month, as did expectations for all three. Even better, prices trended lower.
The Dallas Services Index improved slightly from last month. Price expectations fell for both Inputs and Selling.
Treasury yields are slightly lower with oil's decline. A 5y auction tailed by 0.1bp. The USD index is also flat after pulling back from its highs.
- US 2yr -1bps to 4.03%, 5yr -1bps to 4.17%, 10yr -1bps to 4.48%, 30yr -1bps to 5.01%
- USD index: +$0.09 to $99.20
Markets in Asia were mixed overnight. The Nikkei closed around unchanged. Softbank fell 7% giving back some of the recent gains as did Kioxia (-3%). Local yields were down modestly and a 40yr auction saw strong demand. The Yen continues to weaken and is back to ~159.50 ¥/$ despite hawkish comments from BOJ Ueda overnight. South Korea’s Kospi and Taiwan both hit new all-time highs with the tech strength. SK Hynix added another 9% overnight (~250% YTD) and followed Micron into the $1T market cap club, while local competitor Samsung returned to the T Club after it added 15%. Local markets in China/Hong Kong fell over 1% as regulators continue to crackdown on brokerages. Australia’s CPI eased from last month and came in cooler than expected but remains elevated at 4.2% y.y. The RBA raised rates at their last meeting, and third time this year, to combat inflation. The Bank of New Zealand left rates unchanged in a 3-3 vote with half the members preferring a hike.
European indices ended around flat across the continent, near there lows. France was a leader, up 0.4% as luxury names were strong (LVMH, Hermes, L’Oreal +2-4%) despite Consumer Confidence falling to its lowest since March 2023. Germany was middle-of-the-pack but autos were higher on the latest registration data.
Brent crude drifted lower overnight and took a leg down on the MOU news before the open, breaking below its 50d ma and below $95. It then recovered back to pre-fake MOU news before fading again. US natural gas is trading higher on warmer weather forecasts.
Gold and silver are down 1-2% along with crude and yields. Gold tested and held its 200d ~$4385 while Silver dropped below its 50d ~$76. Copper is down modestly as well. The ag complex is mostly lower on crop data. Bitcoin and Ether are down ~1%. Bitcoin is trying to hold its 50d ma and ETH looking to do the same with the $2k level. In a slight tangent, Robinhood launched Agentic Trading and Credit Cards, to trade and make purchases on your behalf.
Earnings:
- After-Market: A, CRM, HEI, HPQ, MRVL, NTNX, SNOW, SNPS
- Pre-Market (Thrs): BBY, BURL, DLTR, HRL, KSS, PLAB, REX
- After-Market (Thrs): ADSK, AEO, COST, DELL, GAP, HQY, MDB, NTAP, OKTA, PATH, S
Economic Data:
US:
- Mortgage Apps: -0.4% vs prior -4.1%
- Refis: -18.1% vs prior -0.1%
- 30yr rate: 6.65% prior 6.56%
- ADP Weekly Change: 35.75 prior 40.75k
- Richmond Fed Manuf. Index: 13 vs 4 cons, prior 3
- Dallas Services: -7.7 vs prior -9.9
- 3:55 Fed Cook
- 4:30 API Oil Inventories
Global:
- Australia Inflation m.m / y.y: 0.4% / 4.2% vs 0.6% / 4.4% cons, prior 1.1% / 4.6%
- China Industrial Profits YTD (y.y): 18.2% vs. prior 15.5%
- France Consumer Confidence: 82 vs prior 84
STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 5/27/26 (a/o 9:00 am)
Good morning,
Coming out of the long weekend most major US indices kept on trucking hitting new all-time highs yesterday. The hopes for a diplomatic resolution in Iran prevailed despite the US conducting “self-defense” strikes. Oil prices fell >2.5% with ICE Brent breaking below $100 and its 50d ma which helped Treasury yields pullback as well. The S&P 500 was up 0.6% closing back over 7,500 while small/midcap indices were up ~1.5%. The strength in memory stocks and to a somewhat lesser extent chips was the big story with Micron surging nearly 20% and clearing a $1T market capitalization following a UBS upgrade (NYSE Semi Index +6.2% and ~90% YTD). The speculative juices were flowing with space stocks surging and strength in other popular thematic trades like nuclear and rare earths. Quantum stocks paused after surging in the previous two sessions.
Futures continued to move higher overnight amidst more tech strength. Futures were pulling back from the overnight highs this morning but jumped after Iran State TV released details of the draft MOU with the US which would include the withdrawal of US military forces and the lift of the blockade while Iran would restore the number of commercial ships moving through the Strait to pre-war levels within 1 month. However, futures have given those gains as there was no mention of enriched uranium and the suggestion of tolling in the Strait, which have been redlines for the administration. The move in S&P futures was reasonably muted up trading up ~0.35% at the highs before pulling back modestly. Oil prices have extended to the downside and were down >5% at the lows but have bounced, ICE Brent trading just under $96.
Overnight SK Hynix joined Micron in the $1T club and the latter is up ~7% in the pre-market after a Barclays upgrade but they only doubled their PT, weak, the trailblazer UBS nearly tripled theirs yesterday. Speaking of trailblazers space stocks continue to “moon” as the kids say with many stocks up well north of 5% in the pre-market. There is some weakness in software particularly the cyber security stocks, which have been moving sharply higher recently. Zscaler (->20%) reported solid numbers but cut ARR guidance. The company also announced that it was pulling forward Capex investment in an attempt to lock in current pricing due to the rising costs of memory and data center equipment increasing their Capex estimate as a % of revenue from mid-single digits to high single digits. Retail earnings were mixed (BBWI/ANF trading higher, DKS/CPRI is trading lower). There are multiple sell side conferences going on today (see list below).
This morning mortgage apps continued to fall amidst following the recent increase in rates. The ADP weekly employment change moderated to ~36k from ~42k last week. After the open the Richmond Fed index and Dallas Services will be released. This afternoon there is a 5yr auction. Treasury yields started to reverse the overnight bid ahead of the Iran news but are back near the lows down 1-3bps across the curve (also not a particularly large reaction). The USD index is also pulling back modestly.
Government Yields
Markets in Asia were mixed overnight. The Nikkei closed around unchanged. Local yields were down modestly despite a somewhat weak 40yr bond auction. The Yen continues to weaken approaching 159.50 ¥/$ despite some hawkish comments from BOJ Ueda overnight. Softbank fell 7% giving back some of the recent gains. The Kospi and Taiwan both hit new all-time highs with the tech strength. Local markets in China/Hong Kong fell over 1% as regulators continue to crackdown on brokerages. China industrial profits improved. Inflation data in Australia came in a bit hot. The Bank of New Zealand left rates unchanged in a 3-3 vote with half the members preferring a hike. Indices in Europe have been in the green overnight and have extended to the upside following the Iran headlines.
Energy related commodities are moving lower. The metals complex has been under pressure overnight with gold breaking below recent lows ~4,450 currently down 1.7% at 4,426 the 200d ma is ~4,388. Silver is down >2% but off the lows. Copper is a relative outperformer holding around unchanged. Ag is under pressure. After reversing lower yesterday crypto continues to drift lower. Bitcoin is trading ~75.5k its 50d ma is around 74.8k.
Earnings:
Broker Conferences:
Economic Data:
US:
Coming out of the long weekend most major US indices kept on trucking hitting new all-time highs yesterday. The hopes for a diplomatic resolution in Iran prevailed despite the US conducting “self-defense” strikes. Oil prices fell >2.5% with ICE Brent breaking below $100 and its 50d ma which helped Treasury yields pullback as well. The S&P 500 was up 0.6% closing back over 7,500 while small/midcap indices were up ~1.5%. The strength in memory stocks and to a somewhat lesser extent chips was the big story with Micron surging nearly 20% and clearing a $1T market capitalization following a UBS upgrade (NYSE Semi Index +6.2% and ~90% YTD). The speculative juices were flowing with space stocks surging and strength in other popular thematic trades like nuclear and rare earths. Quantum stocks paused after surging in the previous two sessions.
Futures continued to move higher overnight amidst more tech strength. Futures were pulling back from the overnight highs this morning but jumped after Iran State TV released details of the draft MOU with the US which would include the withdrawal of US military forces and the lift of the blockade while Iran would restore the number of commercial ships moving through the Strait to pre-war levels within 1 month. However, futures have given those gains as there was no mention of enriched uranium and the suggestion of tolling in the Strait, which have been redlines for the administration. The move in S&P futures was reasonably muted up trading up ~0.35% at the highs before pulling back modestly. Oil prices have extended to the downside and were down >5% at the lows but have bounced, ICE Brent trading just under $96.
Overnight SK Hynix joined Micron in the $1T club and the latter is up ~7% in the pre-market after a Barclays upgrade but they only doubled their PT, weak, the trailblazer UBS nearly tripled theirs yesterday. Speaking of trailblazers space stocks continue to “moon” as the kids say with many stocks up well north of 5% in the pre-market. There is some weakness in software particularly the cyber security stocks, which have been moving sharply higher recently. Zscaler (->20%) reported solid numbers but cut ARR guidance. The company also announced that it was pulling forward Capex investment in an attempt to lock in current pricing due to the rising costs of memory and data center equipment increasing their Capex estimate as a % of revenue from mid-single digits to high single digits. Retail earnings were mixed (BBWI/ANF trading higher, DKS/CPRI is trading lower). There are multiple sell side conferences going on today (see list below).
This morning mortgage apps continued to fall amidst following the recent increase in rates. The ADP weekly employment change moderated to ~36k from ~42k last week. After the open the Richmond Fed index and Dallas Services will be released. This afternoon there is a 5yr auction. Treasury yields started to reverse the overnight bid ahead of the Iran news but are back near the lows down 1-3bps across the curve (also not a particularly large reaction). The USD index is also pulling back modestly.
Government Yields
- US 2yr +0bps to 4.04%, 5yr -1bps to 4.17%, 10yr -2bps to 4.47%, 30yr -1bps to 5.01%
- USD index: -$0.10 to $99.01
Markets in Asia were mixed overnight. The Nikkei closed around unchanged. Local yields were down modestly despite a somewhat weak 40yr bond auction. The Yen continues to weaken approaching 159.50 ¥/$ despite some hawkish comments from BOJ Ueda overnight. Softbank fell 7% giving back some of the recent gains. The Kospi and Taiwan both hit new all-time highs with the tech strength. Local markets in China/Hong Kong fell over 1% as regulators continue to crackdown on brokerages. China industrial profits improved. Inflation data in Australia came in a bit hot. The Bank of New Zealand left rates unchanged in a 3-3 vote with half the members preferring a hike. Indices in Europe have been in the green overnight and have extended to the upside following the Iran headlines.
Energy related commodities are moving lower. The metals complex has been under pressure overnight with gold breaking below recent lows ~4,450 currently down 1.7% at 4,426 the 200d ma is ~4,388. Silver is down >2% but off the lows. Copper is a relative outperformer holding around unchanged. Ag is under pressure. After reversing lower yesterday crypto continues to drift lower. Bitcoin is trading ~75.5k its 50d ma is around 74.8k.
Earnings:
- After-Market: BOX, MOD, SMTC, ZS
- Pre-Market (Wed): ANF, BBWI, CPRI, DKS, DY, MNRO, P
- After-Market: A, CRM, HEI, HPQ, MRVL, NTNX, SNOW, SNPS
Broker Conferences:
- KeyBanc Industrials & Basic Materials Conference
- TD Cowen Technology, Media & Telecom Conference
- Goldman Sachs Leveraged Finance and Credit Conference
- Bank of America Power Utilities and Cleantech Conference
- Deutsche Bank Global Financial Services Conference
- Jefferies Software, Internet & AI Conference
- Bernstein Strategic Decisions Co..
Economic Data:
US:
- Mortgage Apps: -8.5% w/w prior -2.3%
- 30yr rate - 6.65% prior 6.56%
- ADP Weekly Change: 35.75 prior 42.25k
- 10:00 Richmond Fed Index
- 10:30 Dallas Services
- 11:30 $28B 2yr FRN auction
- 1:00 $70B 5yr Auction
- 3:55 Fed Cook
- 4:30 API Oil Inventories
- Australia Inflation: 1.1%/4.6% m.m/y.y vs. 0.7%/4.6% cons., prior 0.6%/4.4%
- China Industrial Profits: 15.5% vs. 12.0% cons.
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