Morning in New York: geopolitics and macro statistics sway volatility

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Another aggravation of the situation in the Middle East will be the main factor of pressure on global stock markets. The U.S. military struck facilities in Iran that posed a threat to the army and commercial shipping in the Strait of Hormuz. In response, the Islamic Revolutionary Guard Corps claimed an attack on a U.S. airbase.

The investment community negatively perceived US President Donald Trump's denial of reports about a possible agreement on the Strait of Hormuz with joint management of the route by Iran and Oman. For his part, Ali Bagheri Kani, a spokesman for Iran's Supreme National Security Council, described the full and unconditional unfreezing of Iranian assets blocked by the US as a prerequisite for a peace agreement. Despite the ongoing negotiations, the rhetoric of the parties is getting tougher, which reduces the chances of a speedy diplomatic settlement of the conflict. There are still not enough signs of overcoming disagreements on most of the disputed issues, but the market is still putting the conclusion of a peace agreement in its forecasts.

The main macroeconomic event of the day will be the publication of the most important inflation indicator for the Fed - the PCE index. The consensus assumes growth of the overall indicator for Ma by 0.5% m/m and 3.8% y/y, and the core indicator - by 0.3% m/m and 3.3% y/y. Inflationary pressures remained elevated in April due to rising prices for energy and some consumer goods, although the restrained dynamics of the cost of durable goods could partially offset it.

In parallel with the PCE deflator will be released statistics of personal income and expenditures for April (consensus: +0.4% and +0.5% m/m, respectively). If the dynamics of indicators outperforms forecasts, it will be taken as a sign of accelerating inflation.

This Thursday will also see the release of the revised estimate of US GDP growth for the first quarter (consensus: +2% y/y, the same as preliminary data), durable goods orders and new home construction statistics for April, which will affect the April-June GDP forecasts; and initial jobless claims data (consensus: 211k after 209k a week earlier).

Royal Bank of Canada (RY), Futu Holdings (FUTU), Burlington Stores (BURL), Best Buy (BBY), Toronto-Dominion Bank (TD), XPeng (XPEV ) and Li Auto (LI) will report before the opening of the main session. Costco Wholesale (COST ), Dell Technologies (DELL ), MongoDB (MDB), Autodesk (ADSK), UiPath (PATH), NetApp (NTAP) and Okta (OKTA) will report quarterly results after the close of trading.

Futures on American stock indices demonstrate moderately negative dynamics. We assess the balance of risks for the upcoming session as neutral with a high level of volatility on the background of a large block of significant macro statistics and continued tension in the Middle East.

- Marvell Technology (MRVL) shares are down about 2% despite strong quarterly results and an increase in its long-term outlook. The company expects revenue for its specialty chip business to exceed $10 billion by fiscal year (FY) 2029 amid continued growth in AI infrastructure investments.

- Salesforce (CRM) stock is losing about 2%. Although its revenue and profit were above market expectations, the forecast for the current quarter was slightly below consensus. Additional pressure on quotations is exerted by concerns about the negative impact of the introduction of AI tools on the demand for cloud products.

- Snowflake (SNOW) shares are adding more than 30% on the back of strong quarterly earnings release and the company raising its FY 2027 revenue guidance for its product business to $5.84 billion. The stock was further supported by news of a $6 billion expansion of its partnership with Amazon Web Services.

- Agilent Technologies (A) stock is adding about 5% after releasing results for the second quarter of fiscal 2026. The company's revenue and adjusted EPS totaled $1.83 billion and $1.49, while the consensus was $1.8 billion and $1.41, respectively. The stock was further supported by an increase in full-year earnings guidance amid robust demand for laboratory equipment.

- HEICO (HEI) shares are up about 10% as it reported its highest-ever second-quarter sales, operating and net income, and the issuer's organic revenue growth exceeded 18%. The business continues to be supported by strong demand in the aerospace and defense segments.

- Nutanix (NTNX) stock is adding about 3% in reaction to its quarterly results. The company's adjusted EPS came in at $0.47 with a consensus of $0.36, while revenue grew 10% YoY to $703 million, with average expectations near $686 million. The release allayed investor concerns about the growth rate of the business.

- Braze (BRZE) is down about 9%, although its revenues grew 30% YoY, according to its Q1 FY 2027 earnings release. The company's results and outlook were generally close to market expectations, triggering profit taking after strong growth.

Ma 27 trading on the U.S. stock exchanges ended mixed. The S&P 500 rose by only 0.02%, but set another historic high. Nasdaq 100 decreased by 0.09%, Dow Jones added 0.36%, Russell 2000 corrected by symbolic 0.02%. Low volatility is explained by absence of significant drivers for directed movement. After the rally, activity in the segment of artificial intelligence and other shares of the technological sector has somewhat weakened.

The consumer sector (XLY: +1.24%) was the leader in growth. The energy sector (XLE: -1.5%) remained the outsiders due to the continuing decline in oil prices. Quotes WTI fell by 5.6%, to the lowest since April, on expectations of a diplomatic settlement of the armed conflict between the U.S. and Iran.

Dynamics were mixed in the Magnificent Seven stocks. Meta Platforms (META: +3.74%) looked better than the market after the announced launch of paid subscriptions for Instagram and Facebook, while Tesla (TSLA: 1.56%) was supported by the growth in the number of registered electric vehicles in Europe. Meanwhile, some of the largest technology companies corrected following the semiconductor segment.

Macroeconomic statistics was moderately positive. The FRB Richmond manufacturing activity index for May rose from 3 points in April to 13, while the consensus was for a decline to 2 points. Improvement was recorded in the components of new orders and shipments, while the growth of selling prices slowed slightly. ADP data pointed to a continued moderate pace of hiring in the US private sector. The average number of new jobs fell from 42.25k to 35.75k over the past four weeks.

-Lululemon (LULU: +2.9%) has reached an agreement with founder Chip Wilson to resolve a corporate conflict. After the annual meeting, the company will place two of the partner's proposed nominees on the board, and will appoint another independent director by October. In return, Wilson agrees to restrictions on voting and public commentary about the company.

-IREN (IREN: +13.5%) said it plans to acquire Nvidia 's (NVDA: -1.1%) Blackwell systems from Dell Technologies (DELL: +0.1%) for about $1.6 billion. The company intends to use the new hardware to expand its cloud-based AI business to meet increasing demand for related infrastructure.

-Akzo Nobel (AKZOY: +19%) rejected a €73 per share offer from Nippon Paint and Sherwin-Williams (SHW: -0.41%), as this valuation, according to the board of directors, does not reflect the long-term prospects of its business. The company intends to pursue its previously announced merger with Axalta (AXTA: +1.1%), which will create a major player in the paint and coatings market.

-Bath & Body Works (BBWI: +9.7%) beat consensus on revenue and earnings in the latest quarter and showed improved operating efficiency. Management left its full-year guidance unchanged despite pressure from import tariffs and logistics costs.

- Boston Scientific (BSX: -12.5%) reported weaker sales of its Watchman device and revised downward its outlook for the business. The company also noted increased competition in the electrophysiotherapy segment.

This article was AI-translated and verified by a human editor