This morning in New York: the rally in technology continues

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

The dynamics of the upcoming session will be primarily determined by the improvement of the foreign policy background and the continuation of the corporate reporting season. US President Donald Trump announced the suspension of the Project Freedom operation to escort commercial vessels through the Strait of Hormuz, citing "significant progress" in negotiations with Iran on a "comprehensive and final agreement". Meanwhile, the blockade of the strait continues. Iran's foreign minister arrives in Beijing to meet with Chinese counterpart Wang Yi, which the market also interprets as a signal of de-escalation. U.S. Defense Secretary Pete Hegseth confirms that the ceasefire remains in place.

Sustained demand for infrastructure for artificial intelligence may come to the forefront. Strong reporting from Advanced Micro Devices (AMD) the day before after the close of trading and reports of a massive long-term agreement between Anthropic and Google Cloud form a dual catalyst for growth for the technology segment, semiconductor manufacturers, data center equipment vendors, hyperscalers and supply chain players for AI infrastructure. The positivity is reinforced by Ma's confident forecasts, which assume a 35% compound annual growth rate for the CPU market, which will result in it exceeding $120 billion in 2030. Given the high share of large technology companies' shares in stock indices and the continuing positive momentum in the semiconductor segment, we assume that the news background will encourage capital flows into the securities of the respective issuers. The risk of spot profit taking after a long rally in quotations of some companies remains a restraining factor.

In the macroeconomic calendar, the most important publication will be ADP data, recording the dynamics of employment in the private sector for April (consensus: +120 thousand, previous value: +62 thousand). The release acts as a benchmark before the publication of the April report of the Ministry of Labor, which will be released on May 8. Also today, the weekly MBA mortgage applications statistics will be released (previous value: -1.6%). There will be a speech by the President of FRB Chicago Austan Goolsbee.

EOG Resources (EOG) reported for the quarter , while Uber Technologies (UBER), Walt Disney (DIS), CVS Health (CVS), Marriott International (MAR), Apollo Global Management (APO) , and Hut 8 Mining (HUT) will also report quarterly results before the main session opens. AppLovin (APP), Coherent (COHR), Arm Holdings (ARM), IonQ (IONQ), DoorDash (DASH), CF Industries (CF) and Fortinet (FTNT ) will report after the close of trading.

Futures on US stock indices show positive dynamics. We assess the balance of risks for the upcoming session as positive with moderate volatility on the back of weakening geopolitical tensions, strong reporting season and demand for AI infrastructure backed by AMD results.

- Shares of Advanced Micro Devices (AMD) are up more than 18% after the company posted strong earnings reports that data center segment revenue from January to March rose 57% YoY to $5.8 billion amid strong demand for artificial intelligence infrastructure. For the second quarter, the company forecast revenue of $11.2 billion with consensus of $10.52 billion.

- Quotes of Super Micro Computer (SMCI) rose by almost 16%, although its revenue for the third fiscal quarter amounted to only $10.24 billion with a forecast of $ 12.33 billion. Support for the shares was supported by the fact that the CFO denied the need to revise previously published reports in connection with allegations of illegal redirection of servers based on Nvidia chips in China. Earlier, these charges, brought against the co-founder and a number of former employees of the company, put considerable pressure on quotations.

- Alphabet (GOOGL) shares are up more than 2% after The Information reported that it has entered into a five-year, $200 billion agreement with Anthropic. The contract includes cloud services and the supply of custom chips. The source estimates that the deal forms more than 40% of Google's already disclosed contracted cloud revenue portfolio.

- Shares of Arista Networks (ANET) are down nearly 8%, although its revenue and EPS came in above average expectations. The negative performance is attributed to investors' higher guidance on the company's outlook amid optimistic assessments of AI infrastructure prospects and the recent rally.

- Flex (FLEX) stock is up within 19% as its fiscal Q4 revenue grew 17% YoY and adjusted EPS came in at $0.93, beating expectations.

- Lumentum (LITE) is down more than 1% despite a 90% YoY revenue growth in the fiscal third quarter. This indicates inflated investor expectations after a rally in the securities of the supplier of optics for AI infrastructure.

Trading on May 5, 2026 on the U.S. stock markets ended in positive territory, but slightly below intraday highs. The S&P 500 added 0.81%, the Nasdaq 100 rose 1.31%, the Dow Jones rose 0.73%, and the Russell 2000 climbed 1.75%.

The IT industry (XLK: +2.21%) led the growth on the back of rally in shares of chipmakers. The SOX sector index added more than 4% supported by Intel (INTC: +12.92% at the close of trading on Ma. 5) and memory chip makers. The raw materials sector (XLB: +1.74%) showed strong positive dynamics. Only telecoms (XLC: -0.4%) closed slightly down. In the "Magnificent Seven" the dynamics was multidirectional.

The course of trading was primarily determined by the news about the continuation of the ceasefire between the US and Iran, despite the surge in tensions the previous day. The lack of escalation put pressure on oil quotations, WTI futures corrected by 3.9% after rising by 4.4% on Monday. This factor also contributed to the stabilization of Treasury bond yields, which fell by 1-3 bps across the curve after rising the day before, when the yields of 10-year securities reached the maximums in nine months. Additional support for risk assets remains a strong first-quarter reporting season and the sustained demand for computing power for artificial intelligence and hyperscalers' capital expenditures supported by it.

Macrostatistics were mixed, but in general signaled the stability of the economy. The ISM Services Business Activity Index for April was slightly below expectations. The component of new orders noticeably declined relative to the previous month, and the index of prices paid updated the maximum since October 2022. This intensified concerns about the acceleration of inflation under the influence of the Middle East conflict.

Job openings for March, according to JOLTS, totaled 6.866 million, exceeding expectations. New home sales in the same month reached an annualized rate of 682,000, beating average forecasts.

The speeches of Fed officials Michelle Bowman and Michael Barr did not contain any significant signals.

-DigitalOcean Holdings (DOCN: +40.4% at the close of trading on May 5) beat consensus on revenue, margin and adjusted EBITDA for the first quarter, its guidance for the current quarter was above market expectations. Management raised guidance for 2026-2027 to reflect contract volume growth and expects revenue to increase by more than 50% next year.

- Intel (INTC: +12.92%) reacted with sharp growth to Bloomberg's reports about Apple's (AAPL: +2.65%) intention todiversify processor suppliers in order to reduce dependence on TSMC and hedge against supply chain disruption risks. To this end, preliminary talks have been held with Intel and other chipmakers.

-TransDigm Group (TDG: +3.62%) beat average market expectations for earnings. Management noted strong demand for civil aircraft components as well as support from accelerating aircraft production.

- Shopify's (SHOP: -15.62%) first-quarter revenue and free cash flow came in above forecasts, but its own guidance was either in line with average market expectations or a bit more cautious. Analysts attribute the correction to investors' inflated forecasts ahead of the report's release and overweight positioning in the paper.

-Diamondback Energy (FANG: -3.51%) reported better than expected production, adjusted EBITDA and capital expenditures for the first quarter. At the same time, it was announced that the company canceled the requirement to distribute 50% of free cash flow to shareholders and suspended payment of variable dividends.

-Eaton Corp.'s (ETN: -2.74%) first-quarterEPS came in 2% above estimates. However, the company worsened its 2026 operating margin guidance by 50 bps, mainly due to its Electrical Americas segment.

-Coinbase (COIN: -2.58%) announced that it is laying off about 700 employees (~14% of its global workforce). The company's CEO Brian Armstrong cited artificial intelligence-driven productivity growth as one of the key factors behind the decision.

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