Market Review: May 12, 2026

Closing Recap

Tuesday, May 12, 2026

U.S. stocks finished the day lower as the S&P 500 pulled back from record highs, but after falling as much as 1% earlier and the Nasdaq down as much as 2%, both finished well off their lows as investors rotated out of technology stocks for a change and rotated into financials, healthcare, consumer staples and energy which lifted markets! Investors took some profits in tech after a massive record run, especially for the Technology (XLK) space. Continued upward pressure on oil and yields was the easy excuse for more defensive tone in equities with headwinds facing the consumer from the gas price spike (retail sold off sharply on Monday, gas prices above $4.50). A rise in inflation prices in April data also added to the selling pressure with CPI coming in above consensus 9ahead of PPI tomorrow). The Philadelphia semiconductor index (SOX) has been a key driver for the Nasdaq the last few weeks, coming into the day up 70% since the start of the year but saw some notable profit taking, falling over 6% before paring losses to -4%. A combination of a cautious tech comments by Michael Burry (see below) and South Korean stocks coming under some pressure following suggestion by presidential policy chief for a citizens’ dividend funded by taxes on AI profits weighed in AI names. Latest batch of corporate earnings also featured more workforce reduction announcements partly related to AI, along with the AI disruption theme.

Inflation data this morning did not help sentiment after the first notable pullback for stocks in some time, as the April consumer prices (CPI) rose 0.6% m/m, in line with economists’ forecasts and slowing from 0.9% in March. Energy prices accounted for over 40% of the month-to-month increase. Energy prices were up 18% from a year earlier; within that gasoline was up 28% and fuel oil jumped 54%; Airfare prices rose 21%. Excluding food & energy, prices still rose +0.4% vs. +0.3% expected 9for core) and y/y prices rose on headline (+3.8% vs. +3.7% est.) and core (+2.8% vs. +2.7% est.). The April CPI report is the latest sign that the Fed interest rate cuts that markets were pricing in at the start of the year are no longer a 2026 story, with fears of a hike on the table.

Back to tech – weakness for the first time in a long time with the Nasdaq underperforming, with the biggest winners during its 6-week win streak (semis, optical, AI, data center, Mag 7) were the biggest drags for today. Noteworthy, Michael Burry, the investor made Famous in The Big Short, warned in a post on Substack that the Nasdaq 100 Index is headed toward a dramatic reversal after a “parabolic” surge that has driven technology valuations to unsustainable heights. Burry said the market resembles the peak of the dot-com bubble just before it burst, citing in particular the steep jump in chip stocks that has pushed up the Philadelphia Stock Exchange Semiconductor Index (SOX) by nearly 70% since the end of March. He said the Nasdaq 100, by his reckoning, is trading at 43 times earnings — well above the implied level of around 30 times — because “Wall Street may be overstating by more than 50% the earnings at our fastest growing, most highly valued companies.” https://tinyurl.com/bde5dmzh . Note @GlobalMktObserv noted on X, “The US tech sector has NEVER been this large: Tech and tech-related stocks now make up ~57% of the total US market cap, a record high. This is 6-7 percentage points higher than at the 2000 Dot-Com Bubble.”

In addition to the Iran/U.S. headlines, other items to watch this week include producer price index (PPI) inflation data tomorrow (after today’s hotter CPI report) and then US President Donald Trump and Chinese counterpart Xi Jinping will meet Thursday morning in Beijing, according to the White House, for a high-stakes summit that will be dominated by discussions on trade and the war in Iran. The trip marks the first visit by a US president to China in nearly a decade. Earnings however much quieter as of today with 452 S&P 500 companies reported thus far vs 456 LY (per Reuters) this quarter, 85% beat vs 79% LY and the avg beat 25% vs 21% LY, avg miss -23% vs -19% LY while avg yr/yr earnings growth 27% vs 12% LY in what has been a very strong quarter of earnings results.

• U.S. April real earnings all private workers -0.2% vs Mar -0.9% (prev -0.9%), U.S. CPI energy +3.8%, gasoline +5.4%, new vehicles -0.2% and CPI food +0.5%, housing +0.7%, owners’ equivalent Rent of primary residence +0.5%.
• NY Fed Q1 household debt: Total: $18.8T, little changed, Delinquency: 4.8%, little changed, Mortgage: $13.2T (+$21B), Auto: $1.7T (+$18B), Student loans: $1.7T (-$6B) and Credit card: $1.3T (-$25B). The overall delinquency rate for student loans in the first quarter was 10.3% for loans three months or more in trouble, up from 9.6% at the end of the fourth quarter of 2025. Some 2.6M student loan borrowers who were 120 days or more behind on their repayments had their loans referred to the U.S. Department of Education’s Default Resolution Group. The report said total delinquency rates on debt were mostly steady during the first quarter at 4.8%

• Treasury yields were broadly higher again as the 30-year yields climb 2bps to 5%, highest in one week, the two-year note rose 5.1 basis points to 3.998% (6-week highs) and the yield on benchmark U.S. 10-year notes rose 5.3 basis points to 4.465%. U.S. Treasury sells $42B 10-year notes at high yield 4.468%, vs. 4.46% when issued prior as the bid-to-cover ratio 2.40 (vs. 2.43 prior), and primary dealers take 11.98% of U.S. 10-year notes sale, direct 24.07% and indirect 63.95%.

• In Footwear/Retail: ONON Q1 sales better at CHF 831.9M vs. est. CHF 822.47M and Q1 ADJ EBITDA margin up 21% vs est. 18% while reiterates full-year 2026 constant currency net sales growth guidance; raises 2026 gross profit margin guidance to at least 64.5% and sees FY adj EBITDA margin 19.5% to 20% vs est. 18.81%.
• Apparel Retail: UAA Q4 revs $1.2B vs. consensus of $1.167B but shares fell as forecast another annual revenue decline and expects profit well below estimates; now sees year op income $140M-$160M and adj EPS $0.08-$0.12, below consensus of $0.23 and sales expected to fall vs. consensus for rise of 1.6% to $5.05B.
• Specialty Retail: GME shared fell after EBAY rejected its $56B takeover bid, citing doubts over the deal’s financing; the Board concluded that GameStop proposal is neither "credible nor attractive" and is confident that Co, under its current management team, is well-positioned to continue to drive sustainable growth.
• Broadlines and hardlines earnings preview at Citigroup noting the sector has lagged YTD (down -8% vs S&P 500’s +8% gain) on macro fears and the implications of higher gas prices. The firm said the stock debate now is how much is weaker consumer spending priced in. Looking at Q1, Citi stills expect most to report results in-line to slightly above the Street and says nearly all should maintain full year guidance (OLLI is lone ne negative standout). Citi upgraded LOW to Buy and new Top 5 Picks – ORLY, HD, AZO, LOW .
• Theme Parks: PRKS was downgraded from Buy to Hold at Stifel and cut PT from $43 to $40 saying between weather excuses, cost blunders, and poor communication, the firm is getting increasingly discouraged with the story. Stifel believes from here the story isn’t about operational improvement/quality (or even demand/pricing) but more so about what that shareholder will do (or not do) to drive share performance.

• In Aerospace: ACHR Q1 adj. EBITDA loss of ($172.5M) came in near the midpoint of management’s Q1 guidance for a loss between ($160M-$180M), which reflects a ~58% Y/y (~25% q/q) widening of the bottom-line loss from management’s planned $34.6M quarterly increase in operating expenses. G&A expense fell ~5% q/q to $83.2M (up ~107% Y/y), and guided Q2 ($185M) in Adj. EBITDA loss at the midpoint, 7% higher q/q (up 56% Y/y). BA booked 135 net new orders in April, nearly matching its total in the first three months of the year. Through the first four months of the year, Boeing has booked 284 new orders after adjusting for cancellations and conversions. The WSJ reported this afternoon that Google is in talks with SpaceX for a Rocket launch deal as the search giant expands its own efforts to put orbital data Centers in space, according to people familiar with the discussions.
• In Chemicals: CE was upgraded to Overweight at JP Morgan on valuation saying its share price has moved lower (14%) from almost $69 last week versus the market, which is 2% higher. There was some disappointment with expected growth in Celanese’s free cash flow Generation, in addition to lower tensions around the conflict in Iran. TROX was downgraded to Sell at Goldman Sachs saying TiO2 fundamentals are skewing more to the downside for which TROX is the most exposed to out of the TiO2 names.
• Alternative Power: PLUG delivered improved top-line growth and meaningful margin progress in Q126, but gross margins remain well negative; reiterated confidence in sequential margin improvement thru ‘26, and improved cash profile, supported by disciplined opex, materially lower capital Intensity, and expected WC benefits in 2H. TE shares jump after earnings as Q1 revs $177.65M top consensus $110.5M and Q1 net Income from continuing ops reached record high, though Q1 net loss widened due to discontinued operations losses; maintains guidance.
• Defense sector: The CBO announced today it puts US Golden Dome cost at $1.2 trillion, dwarfing the Pentagon’s $185B estimate. Space-based interceptor Constellation of 7,800 satellites alone would cost $743B over 20 years, per CBO. Shares of LMT, LHX among names involved in Golden Dome.
• In Transports: shares of airlines, AAL, ALK, DAL, JBLU, LUV, UAL remained weak given the persistent rise in energy prices; energy also impacting cruise lines (CCL, RCL, NCLH, VIK), and truckers and freight.

• ALKS Phase 3 REVITALYZ meets primary and secondary endpoints in idiopathic hypersomnia: The company announced positive topline results from the Ph3 REVITALYZ study evaluating LUMRYZ in adults with idiopathic hypersomnia (IH). Lumryz met the study’s primary endpoint of improvements in excessive daytime sleepiness.
• BMY struck a strategic partnership and licensing deal with major Chinese drugmaker Hengrui Pharmaceuticals, in a deal that could worth more than $15B; the two firms said they would collaborate to advance 13 early-stage drug programs. BMY will pay Hengrui up to $950M, including $600M upfront and contingent payments of $175M on each of the first two anniversaries of the deal.
• HLBBF H Lundbeck raised its 2026 sales and earnings growth forecasts amid stronger U.S. demand for migraine treatment Vyepti and delayed generic competition for schizophrenia drug Abilify Maintena outside the U.S.; now expects full-year revenue growth of 7% to 9% at constant exchange rates, up from 5% to 8%, and adjusted EBITDA growth of 8% to 14%, up from 4% to 12%.
• RIGL signs a global licensing deal for ARVN and PFE recently approved breast cancer drug, Veppanu as Rigel will pay $70 million upfront and another $15 million after certain transition activities are completed; ARVN and PFE are also eligible for up to $320 million in milestone payments as well as tiered royalties
• Healthcare Services: HIMS shares fell after reported mixed Q1 results, with both revenue and adjusted EBITDA coming in modestly below expectations; Q1 revs $608M vs. est. $617M; raises year revs to $2.8B-$3B from prior $2.7B-$2.9B but cuts FY adj EBITDA to $275M-$350M from prior $300M-$375M and vs. est. $322.8M.
• Managed care stocks were a bright spot with UNH hitting 52—week highs and broad strength in Healthcare as shares of CNC, CVS, ELV, MOH all up over 3% and HUM up over 6% in the group; hospitals also strong (CYH, THC)

• In Quantum: RGTI reported MarQ rev of $4.4M (slightly above cons. $4.1M), as MarQ up 136% q/q with delivery of Novera 9-qubit QPU to University of Saskatchewan driving strong hardware sales; QUBT shares jumped on results as recognized $3.7M of revenue vs. consensus of $3.1M while net Income (loss) was $(4.1) million vs. consensus at ($10.9) million or ($0.05)/share and net Income included a $3.2M gain from the mark to-market of a derivative liability and interest Income of $13.5M; QBTS shares fell as Q1 revs $2.85M missed est. $4.14M.
• In Electronic Parts: ZBRA shares jumped on results and guidance as Q1 EPS/sales $4.75/$1.49B topped consensus of $4.25/$1.48B while raised 2026 sales growth view to 10%-14%, up from prior forecast of 9%-13% growth and said it expects Q2 sales growth of 14%-17% vs. consensus expected 13.7% growth.
• In Communications & Networking: HLIT shares jumped after beat and raised EPS guidance while only trimming the full-year sales outlook slightly; sees 2026 revenue $475M-$495M, total revenue consensus $465.73M; in the video infrastructure space, getting more profitable on slightly lower revs.
• In Telecom: ASTS shares tumbled after posted a wider loss than analysts were expecting for Q1 and revenues of $14.73M was well below the consensus $37.6M saying revenue declined due to the timing of gateway deployment to their commercial customers and the timing of completion of certain government contract milestones – though said they remain on track to achieve $150M-$200M revenue guidance. VOD shares fell after reports FY26 adj earnings before interest, tax, depreciation and amortization after leases of 11.4B euros ($13.4B) at top end of guidance, but margin falls to 28.1% from 29.2%; said Germany organic FY adj EBITDA down 3.3%.