Market Review: May 05, 2026

Closing Recap

Tuesday, May 05, 2026

After dominating the narrative on Monday, Middle East headlines between the U.S. and Iran were much quieter today with the focus turning back to the strong earnings season, as nine of the eleven S&P sectors closed the day higher, but none stronger than Technology (XLK) rising 2.2% with new record highs for semis (SOX +4%) as investors continue to pile into the same winners, taking many names in the complex to record highs. Just an astounding five week run thus far for major averages, and showing no signs of slowing, with the heavily weighted tech sector now up 15% YTD (SOX +55% YTD), joining strength in materials (XLB +13.8% YTD) and Industrials (XLI +11% YTD), only trailing Energy (XLE +33% YTD) due to the massive spike in oil prices this year. While earnings continue to dominate this week (over 2,000 companies reporting), attention also on the jobs market with ADP Private payrolls tomorrow and nonfarm on Friday. Benchmark 10-year Treasury yields have climbed to 4.43% from 3.94% before the war began on February 28, while the 2-year has jumped to 3.94% from 3.38% during that stretch, lessening chances of a Fed rate cut anytime in the near future (though yields eased a bit today following a busy round of economic data (see below)). Inflation fears, higher Treasury yields, low chance of rate cuts anytime soon, high energy prices have all taken a backseat to earnings growth from AI and tech momentum! During the heart of earnings season, it was reported today in an interesting note that U.S. SEC says it proposes amendments to permit optional semiannual reporting by public companies. Companies could elect to file one semiannual report + one annual report per year, instead of three quarterly reports + one annual. Filing deadline would be 40-45 days after the first half ends.

• ISM report on U.S. non-manufacturing sector shows PMI 53.6 in April (consensus 53.7) vs 54.0 in March; ISM non-manufacturing business activity index 55.9 in April above the 53.9 in March; new orders index 53.5 in April vs 60.6 in March, employment index 48.0 in April vs 45.2 in March and in-line prices paid inflation reading of 70.7.
• March single-family home sales rose 7.4% to 682K vs. est. 650K; March home sales Northeast +80.0%, Midwest -5.0%, south +11.1%, West -3.5%; US March new home supply 8.5 months’ worth at current pace; March median sale price $387,400, -6.2% from March 2025 ($412,900).
• March trade deficit widened to $60.3B vs. $61.0B est. & $57.8B in prior month… imports +2.3%; exports +2.0%; the US trade gap widened another 4.4% as imports surged on vehicles, consumer goods, and AI hardware while exports only managed a modest oil-driven bump.

• Oil prices slipped on Tuesday, as WTI crude fell -$4.15 or $3.90 to settle at $102.27 per barrel while Brent crude prices declined -$4.57 or 3.99% to settle at $109.87 per barrel.
• Treasury yields took a break after hitting highs around 4.45% Monday, as 30-year Treasury yields remain a touch below 5% having hit the highest since July on Monday on inflation fears and concerns about higher government borrowing estimates.

• Food Sector: AMZN business now delivers fresh groceries to businesses in more than 2,300 cities, says business prime members get free same-day delivery on grocery orders over $25 in most areas; BRBR shares tumbled as Q2 revs $598.7M missed the $609M consensus on weaker adj EPS of $0.14 (vs. est. $0.32) and adj Ebitda $53.8M vs. est. $79.5M as margins were pressured by significant input cost inflation, tariffs, and higher freight costs/offers lower guidance.
• Restaurants: CMG was upgraded to Buy from Hold at Argus as believes that the company’s cautious guidance will likely be surpassed as comps accelerate throughout the remainder of 2026 and is confident that Chipotle can achieve its long-term goals of mid-single-digit comp growth, high single-digit revenue growth.
• In Beauty: ULTA was upgraded to Buy from Neutral at Bank America with a $685 price target saying guidance for only modest leverage in FY26 has sent the stock 26% off its 52-week high, but the pullback has brought elevated investor expectations down to earth and creates an opportunity to invest.

• Consumer Services: DUOL shares fell as reported Q1 bookings (subscription bookings grew 9% Y/Y ex-FX) and EBITDA that were respectively $7M and $6.5M above guidance and Q1 DAU growth of 21% was slightly above soft guidance of 20% Y/Y, but Q2 bookings guidance came in $11M below consensus.
• Specialty Retail: Michael Burry said he sold his entire position in GME after it made an offer to buy EBAY for about $56 billion, citing concerns about the debt the company could take on for an acquisition.

• Refiners: MPC Q1 results topped consensus benefiting from stronger refining margins amid tighter global supply driven by the Middle East war and approved an additional $5 billion share repurchase program.

• In Payments: PYPL Q1 revenue rose 7% to $8.4B, beating analyst expectations of $8.05B as adj EPS $1.34 topped the $1.27 estimate while reiterates FY26 guidance; said Q1 total payment volume rose 11% y/y, supporting revenue growth; share fell after saying expect Q2 to reflect more pressure on a yoy basis, driven by non-recurrence of certain prior year items and timing of anticipated cost savings and investment
• In FinTech: FIS shares rallied after the company and Anthropic announced a partnership to develop new artificial-intelligence tools for banks. The companies have agreed to build AI agents, programs that complete tasks without the supervision of a user, for use by financial institutions. The agents will draw on FIS’s financial data and systems and Anthropic’s AI, Claude. FISV shares declined as Q1 adjusted revenue $4.68B missed analyst expectations of $4.73B saying organic revenue fell 1% in Merchant Solutions and 6% in Financial Solutions segments though the company affirmed its 2026 organic rev growth and EPS outlook.
• In Insurance: AIZ shares jumped after Q1 results topped consensus on lower catastrophe losses, raises 2026 outlook as now sees adj EBITDA and adjusted earnings per share, both ex-catastrophes up low single digits; Q1 net income rose 87% yr/yr, driven by lower catastrophe losses and Global Lifestyle earnings.

• CYTK shares rose after saying its heart disease drug, aficamten (branded Myqorzo), met the dual goals of a late-stage trial in patients with symptomatic non-obstructive hypertrophic cardiomyopathy
• PFE reported Q1 adj EPS $0.75 topping consensus $0.72 on better revs $14.5B vs. est. $13.8B; backs both FY26 adjusted EPS view $2.80-$3.00 (est. $2.96) and revs $59.5B-$62.5B (est. $61.37B).
• VRDN announced positive top-line results from a Phase 3 study of its drug, called Elegrobart, in patients with chronic thyroid eye disease.
• VRTX reported Q1 earnings that generally matched consensus, although the company said it was shelving an early stage, mRNA-based therapy for cystic fibrosis due to poor tolerability. The drug, called VX-522, was being developed as part of a collaboration with MRNA.

• Medical CRO sector: IQV reported beat on EPS and revs and now expects 2026 adjusted earnings in the range of $12.65 to $12.95 per share, higher than its prior view of $12.55 to $12.85.

• In Packaging & Containers: BALL topped Q1 EPS and sales expectations supported by steady demand for its aluminum beverage packaging across key markets ($0.94/$3.6B vs. est. $0.85/$3.36B); North and Central America sales grew to $1.78B in the quarter from $1.46B y/y; GPK Q1 EPS and sales topped consensus driven by a 1% increase in volume and $50M favorable for-ex, while saying will cut 500 jobs and divest non-core assets.
• In E&C sector: STRL shares jump as Q1 beat was way bigger than expected as revs beat by 38% and EBITDA beat by 41% while guidance raise incorporates a stronger outlook for the remainder of 2026 with revenue guide +20% and EBITDA guide +34%, far exceeding the Q1 beat and signed backlog was $3.8B, +26% q/q and 78% Y/y. KBR posted Q1 EPS and rev beat while reaffirmed its annual outlook.
• In Machinery: CMI Q1 revenue rose 3% to $8.4B topping ests $8.35B while Q1 adjusted EPS missed consensus, impacted by charges from fuel cell business sale; raised full guidance on stronger demand (2026 revenue growth outlook to 8%-11%, up from 3%-8% and 2026 EBITDA margin of 17.75%-18.50%, up from 17.0%-18.0%.
• Electrical Equipment: SHLS rises as Q1 revs beat at $140.6M and  raises full year revenue guidance to $600-$640M from prior $560-$600M though notes Q1 gross margin decline due to increased tariffs from a year ago, higher material costs, and additional right-of-use asset amortization from its new facility.
• Transports: looked to bounce after tumbling Monday where the Dow Jones Transportation Average -4.82% to 19,605, closing under its February breakout zone erasing the entire April push that briefly carried the index to fresh highs near 25,000, led by near -10% declines in UPS and FDX and shares of freight and logistics stocks tumbling on news AMZN is giving external businesses access to its freight, shipping, and distribution capabilities.

• FLY reported Q1 EPS loss of (-$0.46) vs. Street’s loss of (-$0.51) as revs of $81M was higher than Street’s $77M and Q1 EBITDA loss of $65M above the Street’s loss of $74M, driven by stronger sales in Spacecraft Solutions (SciTec likely being a key contributor).
• HII Q1 operating margin falls to 5% from 5.9% a year ago, with cost of product sales up 20%; co’s key Newport News shipbuilding segment’s margin also declines despite higher sales; said higher costs amid inflation and global trade volatility weighed on results, despite strong demand for its vessels
• LDOS shares slipped despite a beat and better guidance
• PLTR shares fell despite delivered another material beat-and-raise, as revenue growth has now accelerated for 11 consecutive quarters to 85% Y/y; raising our full-year revenue guidance to 71% growth, 10 points ahead of our guidance from last quarter; sees Q2 revenue $1.797B-$1.801B above consensus $1.68B; raised guidance across all metrics while Commercial revenue grew +133% YoY (or 143% ex-USG customer transition) with NDR of 150%, and U.S. Government revenue +84%
• TDG raised its 2026 adj. EPS forecast to between $38.83-$40.21 above prior $37.42-$39.34 earlier and saw double-digit growth across its commercial transport and original equipment manufacturer segments.
• VOYG reported Q1 adj EPS loss of (-$0.61) vs. Street’s loss of (-$0.61) on in line revs of $35M though large adj EBITDA loss of -$33M vs. est. loss -$31M driven by new business across major missile defense programs; raised the low end of its 2026 guidance range, now expecting revenue of $230M-$255M (from $225M-$255M).
• VVX reported strong Q1 results that came in above expectations, with revenue of $1.25B, up 23% Y/y (consensus $1.13B), adjusted EBITDA of 85.6M (consensus $79.3M), non-GAAP EPS of $1.53 (consensus $1.28), and record backlog of $13.8B, up 24% q/q, and a full-year guidance raise across all metrics.

• In Ai/Data Center/AI infrastructure: GOOGL, MSFT and xAI reached an agreement with the Trump administration to share early versions of their artificial-intelligence programs to assess their capabilities and security before releasing the models to the public. META is working on a roughly $13B financing package for a data center in El Paso, Texas, led by MS and JPM, Bloomberg News reported on Monday, citing people familiar with the matter. CIFR shares outperformed following Q1 results this morning, Signed third AI data center campus lease. META said META said it is developing a more advanced consumer AI assistant. The goal is to make Meta AI more useful across chat, search, content and daily tasks
• In Internet: PINS Q1 revenue rising 17% Y/Y to $1B and adjusted EPS of $0.27, beating estimates. Global monthly active users grew 11% Y/Y to 631M, marking the tenth consecutive quarter of double-digit user growth; guides Q2 revs of $1.13B to $1.15B, above the $1.12B consensus.
• In Optical: FN shares tumbled after results Q3 adj EPS $3.72 vs. est. $3.56; Q3 revs $1.214B vs. est. $1.18B; Q3 net Income $134.0M vs. est. $130M; guides Q4 revs $1.25B-$1.29B vs. est. $1.258B
• IT Services & Consulting: BLZE shares jumped after he company reported solid F1Q26 results and a raised FY26 outlook; guided to Q2 revenue of $39.8M-$40.2M (vs. consensus $38.0M).
• In Software: NOW hosted its financial analyst day on Monday; projects subscription revenue hitting $30B in 2030 with Now Assist driving 30% of ACV; DOCN shares surge after biggest top-line beat in 18Qs, raising ’26 and ’27 outlooks, w/ ’27 now > 50% from the prior 30%; PCOR Q2 revenue a touch below the Street, ’26 revenue guide raised by a bit more than the beat and Q2 revs guided to $365 at the midpoint vs. Street at $366M.

• AEIS delivered a solid beat-and-raise Q1, as revs increased 26% Y/o/y, above the midpoint of guidance and modestly ahead of consensus +25%, along with EPS 5.5% above consensus; semi rose 4% q/o/q, Data Center was up a stronger +9% q/o/q, while I&M declined 8%; talk of a Q2 sequential slowdown in DC growth on customer timing variables may have weighed on shares.
• GFS Q1 revs down -11% q/q and up +3% y/y to $1.63B at 29% GM; Q2 revenue to grow 8% q/q; 1H26 tracking 4% y/y; except for smartphones, all other end markets up y/y; 15-20% capex intensity in ‘26 vs 8% in ’25.
• ICHR shares fell on results and guidance.
• INTC new all-time highs as shares extend gains after Bloomberg reported AAPL has held exploratory discussions about using Intel and Samsung to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner TSM
• IPGP shares tumble after guided Q2 sales $260M-$290M, with the midpoint slightly below the $275.75M estimate and adj gross margins forecast 37%-40%, while adjusted operating expenses are expected to be between $92M and $95M and Q2 adj EPS $0.25-$0.55 as mid-point misses $0.43 estimate.
• LSCC reported strong 1Q results and higher 2Q guidance, driven by DC revs, as Compute & Comms grew +86% y/y while mgmt indicated DC was 38% of revs in 1Q/2026, while AI revs will reach 25% this year; also announced the acquisition of AMI, a provider a firmware/BMC solutions with 75% server exposure.
• ON posted solid Q1 results, which were slightly above and guided Q2 higher; China Auto grew in Q1 Y/y given higher content despite production down 6% Y/y. Market share remains strong at 55% of China EVs with 2H ramp expected; regarding DC, revs grew 30% q/q in Q1 and are expected to double to $500M in 2026 from $250M.
• Memory/HDD stock strength relentless with MU, SNDK, STX, WDC just extending all-time highs.