These are the early headlines and other items poised to influence the market at the start of trading Thursday. As we share this collection of market drivers, U.S. equity futures point to a mixed market open with both the S&P 500 and the Nasdaq Composite poised to open lower.
1. Iran said there had been no recent progress in talks with the US over an interim peace deal, while fighting persisted in Lebanon despite Washington’s declaration of a ceasefire between Israel and the country. (Bloomberg) President Donald Trump has told aides that the trigger for restarting full-on conflict would be if Tehran kills American troops, The Wall Street Journal reported. (Barron’s)
The above points to the likelihood we close out another week without a deal that would pave the way to ending the conflict and re-opening the Strait of Hormuz. Granted, oil prices have fallen off recent highs, but those prices remain well above the $55-$65 price per barrel levels we saw in the first two months of the year.
2. Yet another Federal Reserve official has warned that the central bank may need to move to raise interest rates to combat rising inflation before it becomes entrenched. In remarks at the University of Texas at El Paso on Wednesday, Dallas Fed president Lorie Logan said she believes it’s taking too long for inflation to return to the central bank’s 2% target. (Barron’s) Prices increased at a moderate to strong pace overall, with most Districts reporting higher inflation than the previous report. Districts noted that energy-related costs tied to the conflict in the Middle East were the primary driver of inflationary pressures, with spillovers into shipping, packaging, groceries, and fertilizer. Non-labor input costs continued to rise faster than selling prices, contributing to broader concerns about margin compression. (Fed Beige Book)
What we saw on the Prices front in this week’s May PMI data from ISM, and yesterday’s latest Fed Beige Book points to continued inflation pressures. Odds are very high we will see that flow through to next week’s May CPI and PPI data. The Cleveland Fed’s Inflation Nowcasting model puts headline CPI up 4.18% on a year-over-year basis next week vs. April’s 3.8% print.
Could we see a rate hike as new Fed Chair Kevin Warsh makes his debut? We’re more likely to see more hawkish language and a split Fed vote, but then again, we’re already avoiding parts of the market, like homebuilders, that are more interest-rate sensitive.
3. Broadcom Inc. shares fell in premarket trading, setting the stock up for the biggest drop in about 16 months, after the company delivered a disappointing forecast for artificial intelligence chip revenue. AI semiconductor revenue will be $16 billion in the fiscal third quarter, which runs through July, the company said in a statement Wednesday. Analysts predicted $17.2 billion on average, according to data compiled by Bloomberg… Chief Executive Officer Hock Tan said Broadcom will sell $56 billion in AI chips in the fiscal year that ends in October. That forecast fell short of the average estimate of $57.6 billion. (Bloomberg)
The needed context on Broadcom’s (AVGO) AI chip business, in our view, is the $30 billion in bookings recorded during the quarter. That and Broadcom management reiterated its outlook for more than $100 billion in AI chip business during 2027 compared to the $56 billion figure mentioned above. The team also shared that 2027 figure “is on the same trajectory as we are seeing in the back half of ’26.”
The parabolic rise in AVGO shares leading into last night’s earnings report also set the bar that Broadcom had to deliver rather high. We’ve seen situations like this before, and our view is the double-digit pullback we’re likely to see today could be a nice opportunity to pick up shares when the shakeout settles. We’ll have more to say on this later, but the next item we’re sharing is certainly constructive for our thinking…
4. Taiwan Semiconductor Manufacturing Co.’s global chip supply will fall short of AI-fueled demand for years to come, chief executive officer C.C. Wei said, suggesting production capacity remains a key bottleneck in the buildout of global computing infrastructure…. TSMC won’t be able to fulfill demand led by American customers even as more manufacturing capacity comes online in the US over the next few years, Wei told shareholders on Thursday. (Bloomberg)
Tiawan Semi (TSM) also said it continues to see increasing adoption of AI models across consumer, enterprise and sovereign applications. That keeps us bullish on the Pro Portfolio’s position in AVGO as well as Marvell (MRVL), Nvidia (NVDA), and Applied Materials (AMAT).
5. Quantinuum raised $1.68 billion in its upsized initial public offering late Wednesday, setting the stage for one of the most anticipated tech listings of the year. The quantum computing company priced its IPO of 28 million shares at $60 apiece. Underwriters have been granted a 30-day option to sell an additional 4.2 million shares if demand is higher than expected, Quantinuum said. From SpaceX to Anthropic, the pipeline of blockbuster IPOs is moving fast. (Barron’s)
Earlier this week, Quantinuum (QNT) raised the offering’s target price to $53-$55 and we used the level of demand for the shares as well as Morgan Stanley (MS) being identified as one of the leads for the upcoming Anthropic IPO to lift our MS price target yesterday.
6. Palantir Technologies Inc. today announced a multi-tiered partnership with Google Cloud, enabling first-class integrations across Google Cloud platforms and making Palantir available on Google Cloud Marketplace (Palantir)… McCarthy Building Companies Inc., one of America’s oldest privately held national construction companies, and Palantir Technologies Inc., a global leader in artificial intelligence and data platforms, today announced a multi-year, multi-million dollar strategic partnership to enhance AI and data-driven decision-making across McCarthy’s operations. (Palantir)
Those two announcements set the stage for Palantir’s (PLTR) AIPCon 10 event today, a spotlight for how the company’s customers are leveraging its AI to drive productivity in the real world. Odds are there will be some slick presentations, but the partnership with Google Cloud and what that means for Google Gemini and Palantir’s AI models is what we’re keen to hear more about.
7. Economic data today per TipRanks: Challenger Job Cuts Report (May), Initial & Continuing Jobless Claims (Weekly), Productivity & Unit Labor Cost (Q1 2026), EIA Natural Gas Inventories (Weekly).
8. Companies reporting today per TipRanks: AM – Brown-Forman (BF.B), Ciena (CIEN). PM – Cooper (COO), Wealthfront (WLTH).
More Pro Portfolio:
- Taking Advantage of Jensen Huang’s ‘Gift’
- We’re Tracking 29 Signals Across 9 Portfolio’s Investment Themes
- May Monthly Roundup: Sell in May? No Way!
At the time of publication, TheStreet Pro Portfolio was long AMAT, AVGO, CIEN, MRVL, NVDA and PLTR.
