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US stocks fell on Thursday after Iran’s supreme leader issued a directive that the country’s near-weapons-grade uranium should not be sent abroad, raising doubts about the progress of peace talks between the US and Iran.
The Dow Jones Industrial Average (^DJI) and benchmark S&P 500 (^GSPC) both fell by 0.4% after a winning day on Wall Street, while the tech-heavy Nasdaq Composite (^IXIC) gave up 0.5% following earnings from Nvidia and an S-1 filing for the upcoming IPO of SpaceX on Wednesday afternoon.
Oil prices rose through the morning, with Brent crude oil (BZ=F) rising back over $108 and US WTI (CL=F) topping $100 again as the US and Iran remained deadlocked on a peace deal. President Trump suggested on Wednesday that a resolution with Iran could be around the corner and that he’s willing to wait “a couple days” while Iran reviews the US’ latest peace proposal. Though the comments from Iran’s supreme leader may throw any progress into question.
Meanwhile, investors continued to assess Nvidia’s (NVDA) earnings that landed after the bell on Wednesday, beating expectations on the top and bottom lines. The AI giant also issued an upbeat forecast for chip sales, but investors had hoped for an even stronger signal of demand.
Shortly after Nvidia results landed, SpaceX (SPAX.PVT) filed its S-1 registration statement with the Securities and Exchange Commission, providing a rare public view into the company’s financials.
Earnings season continues to wrap up this week. Walmart (WMT) reported above estimates on revenue and earnings per share on Thursday, while Ross Stores (ROST), Workday (WDAY), and Zoom Communications (ZM) will report after the closing bell.
On the economic data front, initial jobless claims rose to 209,000 in the week ended May 16, according to data released by the Department of Labor on Thursday, which was below expectations of 210,000 claims.
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Bond markets are not so subtly telling the Fed that rates aren’t high enough
Bond yields resumed their climb higher on Thursday after a reprieve on Wednesday, signaling to the Federal Reserve that interest rates aren’t high enough.
Yahoo Finance’s Jennifer Schonberger reports:
The 2-year Treasury yield, a leading indicator of the Fed’s interest rate policy, has risen to 4.1%, well above the upper end of the Fed’s target range of 3.50%-3.75%. At the same time, the yield on the 10-year Treasury (^TNX) — a warning about investors’ inflation expectations — nearly touched 4.7% before backing off on Wednesday.
“The Bond Vigilantes are threatening that if the Fed doesn’t tighten credit conditions, they will do so to maintain law and order in the economy,” Ed Yardeni wrote this week in a research note.
The rise in bond yields comes as the latest data shows inflation heating up amid the war in Iran, while other economic data suggests resilience in the face of higher oil prices.
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US stock market turns down at the opening bell
The US stock market opened into the red on Thursday after Iran’s supreme leader said the country’s near-weapons-grade uranium can’t leave the country, sparking renewed unease around potential peace deals.
The Dow Jones Industrial Average (^DJI), benchmark S&P 500 (^GSPC), and tech-heavy Nasdaq Composite (^IXIC) all fell roughly 0.5%.
In the oil market, futures on Brent crude (BZ=F), the international benchmark, rose roughly 2% to trade over $107 per barrel, while those on US benchmark WTI crude (CL=F) gained 2.8% to cross back over $100, after the supreme leader’s comments.
Nvidia’s (NVDA) earnings remained in focus after publishing Wednesday evening, beating expectations on the top and bottom lines.
Elsewhere in the corporate world, Walmart (WMT) reported above estimates on revenue and earnings per share on Thursday. Ross Stores (ROST), Workday (WDAY), and Zoom Communications (ZM) will also report earnings on Thursday.
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Stellantis announces turnaround that will elevate Jeep and Ram, while pulling back on Chrysler and Dodge
Carmaker Stellantis NV (STLA) is launching a turnaround plan that will elevate four core brands while sidelining others like Chrysler, the company announced Thursday morning.
Moving forward, Stellantis will concentrate its investments on Jeep, Ram, Peugeot, and Fiat. The company said it believes the move will raise returns by as much as 10% in North America and as much as 5% in Europe by 2030.
Those returns would compare to a 2.5% return on the previous quarter.
The company will invest roughly $70 billion through 2030, with roughly 70% of that spending expected to go to Jeep, Ram, Peugeot, and Fiat, Bloomberg reported, while investments in Chrysler, Dodge, and other brands will be pared back.
The restructuring plans come after news on Tuesday that Stellantis (STLA) and Jaguar Land Rover struck a nonbinding agreement to explore shared product and technology development in the US, the latest in a string of cross-brand partnerships reshaping the global auto industry as sharing costs becomes the name of the game.
The two companies signed a memorandum of understanding committing them to exploring collaboration across product design and technology, though neither side has announced specific programs or financial terms.
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Initial jobless claims fall to 209,000, below expectations
Initial jobless claims rose to 209,000 in the week ended May 16, according to data released by the Department of Labor on Thursday, coming in above the previous week’s revised tally of 212,000 first-time claims.
Economists had expected initial claims to be slightly higher at 210,000 for the week, according to consensus estimates compiled by Bloomberg. The four-week moving average of initial claims fell to 202,500 from 204,000 the week prior.
Continuing claims, which track the unemployed population still seeking work, rose to roughly 1.782 million in the week ended May 9 from the prior week’s revised count of roughly 1.776 million.
Economists had been looking for roughly 1.79 million continuing claims.
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Quantum computing stocks jump on a report that the US will grant $2 billion in awards, take equity stakes
The Trump administration is reportedly working on deals with nine quantum-computing companies, where the US will award $2 billion in grants in exchange for equity stakes, according to the Wall Street Journal.
According to the report, the Commerce Department will give IBM (IBM) a $1 billion package, while GlobalFoundries (GFS) will receive $375 million. D-Wave Quantum (QBTS), Rigetti Computing (RGTI) and Infleqtion (INFQ) will receive $100 million each, the report said, while Diraq could receive $38 million.
The news sent shares of the companies listed much higher in premarket trading on Thursday. IBM stock jumped 6%, while GlobalFoundries stock leaped 15% higher. Shares of D-Wave rose more than 16% and Rigetti stock gained 14%.
Quantum computing uses quantum mechanics to solve complex computational problems, promising to process data exponentially faster than traditional computers. But it’s still a relatively nascent industry that’s finding its way from research labs to commercial applications.
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Walmart Q1 earnings meet expectations as e-commerce sales surge
Walmart (WMT) stock fell 2% in premarket trading after reporting first quarter results that were in line with Wall Street’s expectations but a second quarter outlook that came in a bit light.
Yahoo Finance’s Brooke Dipalma reports on the quarter:
In the first quarter, the big box retailer posted same-store sales growth of 4.1% in the US, above the 3.85% growth Wall Street analysts expected, according to Bloomberg consensus estimates. Higher foot traffic, ticket sizes, and 26% growth in e-commerce sales drove results.
Revenue grew 7.3% to $177.8 billion, more than the $174.8 billion the Street anticipated. Walmart reported adjusted earnings of $0.66, in line with estimates. Both metrics were above the forecast Walmart shared in the prior quarter.
The company gained share across all categories again, including grocery, health and wellness, and merchandise and income cohorts, led by high-income shoppers.
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Oil pulls up following plunge over US-Iran back-and-forth
Bloomberg reports:
Oil inched higher after plummeting on Wednesday, as President Donald Trump said the US is in the “final stages” with Iran.
Brent (BZ=F) neared $106 a barrel after sliding 5.6% on Wednesday, while West Texas Intermediate (CL=F) was around $99. Trump’s comments to reporters stoked hopes for a deal between Washington and Tehran that would see a near-term restart of energy flows through the critical Strait of Hormuz.
Conflicting headlines about the status of negotiations have buffeted oil this week, and prices are still more than 40% higher than when the war started at the end of February. Still, traders have consistently priced in the possibility of an abrupt deescalation, including a deal under which Iran reopens the key shipping lane and unlocks millions of barrels stuck in the Persian Gulf.
Even if the Iran conflict ended immediately, Middle East oil flows would not fully recover until well into 2027, Abu Dhabi National Oil Co. Chief Executive Officer Sultan Al Jaber said Wednesday. The Strait of Hormuz closure was the most severe supply disruption on record, he said.
