Mid-Morning Look: June 03, 2026

Mid-Morning Look

Wednesday, June 03, 2026

U.S. stocks looking slightly lower to start, as the S&P 500 fails to hold above 7,600 and both the S&P and Nasdaq trying to extend their current nine day winning streaks (and the S&P trying to make it an incredible 11 straight weeks of gains). Most S&P sectors are higher to start led by Energy (XLE), and defensive sectors like Healthcare, utilities and consumer staples, while Financials tumble amid weakness in private credit companies (KKR, CG, BX, OWL) and technology (XLK) giving back recent gains led by declines in software for a second day (IGV, ORCL, MSFT, CRM) and Mag 7 names while semis reach another record highs (up over 93% YTD). Back to back days of better jobs data now with JOLTs showing a big jump in job openings on Tuesday, while today’s ADP private payroll report came in above consensus and prior month ahead of Friday nonfarm payrolls.

Oil prices jump overnight as Gulf hostilities flared again, with an Iranian missile attack damaging Kuwait’s airport and the U.S. military carrying out strikes near the Strait of Hormuz, as diplomacy between Washington and Tehran showed little progress. The latest flare-up comes with the conflict stalemated in a shaky ceasefire and the Strait of Hormuz largely closed, more than three months after initial U.S. and Israeli strikes on Iran.  Precious metals prices (gold/silver) remain pressured on expectations that war-driven inflation will keep interest rates high as the 10-yr yield is up 3.6bps to 4.491%. Meanwhile, the dollar’s outlook has improved, supported by resilient U.S. growth and building expectations that the Federal Reserve will raise interest rates.

• U.S. S&P Global Services PMI slipped to 50.7 in May, missing estimates of 51.0 & marking one of the weakest readings in last 2.5 years. New biz growth stayed sluggish, employment fell at fastest pace since 2020, & biz optimism dropped to lowest level since Oct 2022.
• ISM non-manufacturing business activity index 57.7 in May above the 55.9 in April while prices paid index 71.3 in May vs 70.7 in April, employment index 47.9 in May vs 48.0 in April, non-manufacturing new orders index 57.3 in May vs 53.5 in April.
• Factory Orders (M/M) for April reported at +4.8% vs. est 4.6% and prior 1.5%, while Factory Orders Ex-Trans (M/M) rose +1.3% vs. est 0.8% and prior 1.6%.

• Food sector: Bernstein made several ratings changes as they downgraded CAG to Underperform (tgt to $12 from $16) saying the company seems to be heading down the path of a dividend cut, with its payout ratio now at nearly 90%; downgraded CPB to Underperform (tgt to $19 from $21) as the company faces competitive pricing dynamics from PEP in Cape Cod and Kettle Chips, as well as share loss from the Snyder’s and Dots brands; KHC cut to Underperform from Market Perform (tgt to $21 from $25) citing commodity inflation and the company’s limited pricing power for the downgrade; GIS downgraded to Underperform (tgt to $31 from $41) to reflect volatility in commodity prices and consumer sentiment and cut SMPL to Market Perform to reflect concerns around Atkins turnaround and Quest performance.
• Restaurant sector: Morgan Stanley upgrade YUM to Overweight with $185 PT, best growth profile in large franchised QSR and solid brands are undervalued.  KFC + TB segments remain strong over time and keep LT algo on track. MSCO’s thinking on potential Pizza Hut scenarios is inside. The firm downgraded CMG to Equal Weight saying sales drivers less impactful w/less visibility into margin upside and thinks unit growth could fade beyond ’26. SHAK was also downgraded at both Morgan Stanley and Raymond James following weaker guidance yesterday for Q2 (now sees comps +2.5-3% vs. prior +3-5%) and the full year (now sees EBITDA $225-235MM vs. the prior $230-245MM).
• In Crypto: shares of stablecoin provider CRCL shares fell after news global payment networks Stripe, Visa and Mastercard are close to introducing a new stablecoin platform, according to three people familiar with the plans, Coindesk.com reported. U.S.-listed cryptocurrency exchange COIN is also looking into the possibility of participating in the stablecoin platform, one of the people said. Stablecoins have become a focal point for the large card networks and payments players. The total stablecoin market cap is about $325B, according to CoinGecko data. The market is dominated by Tether’s USDT, at $115B.

• INTC +5%; after executives highlighted ramping supply from the company’s advanced Semiconductor manufacturing processes Intel 3 and 18A nodes and demand for CPUs in the data center space.
• IREN +2%; announced the signing of a Transmission Connection agreement to support a planned 800MW data center campus in Bundey, South Australia, its first announced Australian data center project
• MDT +5%; Q4 EPS and revs topped consensus ($1.55/$9.80B vs. est. $1.54/$9.63B as sales in it cardiovascular segment, which accounts for nearly 40% of sales, jumped 13.8% to $3.8B while sales in its Neuroscience segment rose 5% to $2.75B; guided FY adj EPS $5.9-6.00 below consensus $6.06.
• NVTS +20%; shares surge as its 800 V-to-6 V DC-DC power delivery board (PDB) is being shown at NVIDIA’s AI Factory MGX(TM) Ecosystem Showcase at COMPUTEX 2026 in Taipei.
• SHW +2%; as the company and Nippon Paint have terminated efforts to jointly acquire rival paint maker AkzoNobel, they said on Wednesday. The companies’ decision to walk away followed AkzoNobel’s rejection of their €12.5 billion ($14.5 billion) cash takeover offer last week.

• CRCL -5%; after reports payment giants Stripe, Visa (V), MA said to be among backers of soon-to-debut stablecoin platform. U.S. crypto exchange COIN is also said to be looking into the possibility of participating in the new stablecoin platform.
• GTLB -6%; said it would cut about 14% of its staff as part of a pivot toward AI; beats on top and bottom line for Q1 but Q2 revenue guide implies 15.7% revenue growth, lower than 23.1% in Q1, and implied second half guidance implies more deceleration to 14%.
• KKR -4%; as part of a broader selloff in private-markets stocks, after Swiss firm Partners Group capped withdrawals on a fund due to a jump in investors looking to pull out.
• LUNR -10%; after files up to $500M stock offering.
• ONDS -10%; after files for offer and sale from time to time of 2.1M shares of common stock by selling stockholders.
• PANW -5%; delivered a strong print, with all metrics (including organic and inorganic) above expectations given strong execution in a strong cybersecurity demand; shares fell after an initial jump last night post results given a bigger beat on acquired assets and a skinnier organic beat.
• THO -2%; cuts FY26 EPS view to $3.30-$3.80 from prior $3.75-$4.25 due to prolonged macroeconomic headwinds; reported Q3 EPS $1.86 vs. est. $1.91 and on sales $2.78B vs. est. $2.65B