Mid-Morning Look: May 15, 2026

Mid-Morning Look

Friday, May 15, 2026

U.S. stocks seeing its first notable pullback on renewed inflation fears (though has been paring losses since the open), but major averages still on track for 7^th straight week of gains for the S&P 500 and Nasdaq. Today is option expiration and seeing a little unwind most likely following several days of weaker breadth and purely big tech (semi stocks and Mag7) doing all the heavy lifting as the S&P 500 (SPX) topped 7,500 for the first time Thursday and the Dow reclaimed the 50K level. Seeing just a modest pullback off record highs yesterday after hotter PPI data in Japan echoed what was seen earlier this week in the U.S. from CPI/PPI data as high energy costs take its toll. The US dollar jumps and Treasury yields hit multi month highs (weighing on precious metals). Early weakness in many S&P sectors with Energy and Financials the lone leaders. Smallcap Russell 2000 down over 2% as the sector is seen the hardest hit on fears of rising rates/yields.

The U.S./China summit between President Trump/Xi ended without any joint announcements on specific deals, or any broader communiqué covering trade or other matters, but both sides celebrated the visit as a reset in relations. Some top items out of summit include: Trump said he didn’t discuss tariffs, the NVDA H200 chips topic did not come up, said he talked with Xi about possibly working together on Ai; Trump notes on Iran: notes he’s ok with Iran suspending Nuclear program for 20 years but has to be a ‘real’ commitment. Xi warned against a potential clash with the U.S. over the self-ruled island Taiwan that Beijing claims as its own. Trump invited Xi to the White House on Sept. 24

Inflation fears arise overnight in Japan with “hotter” PPI data, sending US yields higher, with the benchmark 10-year yield rising over 11-bps to 4.571%, its highest level since early June 2025 and the 2-yr yield jumps 8 bps to 4.075%. Gold and silver prices tumble, while oil prices jump over 2.5% as the Strait of Hormuz remained closed, heightening concerns over global energy supplies. The odds of the U.S. Federal Reserve hiking interest rates by 25 basis points in December have more than doubled over the past week to about 40%, according to CMEGroup’s FedWatch tool after hotter CPI, PPI readings.

Oil prices higher but pare gains: The United Arab Emirates will double its capacity to export crude oil bypassing the Strait of Hormuz by next year, as it seeks to reduce reliance on the shipping chokepoint. The crucial Strait of Hormuz remains effectively closed, with efforts to end the war in limbo and disruptions that have upended global markets set to linger. President Trump said the US and China share common goals for ending the Iran war, while Beijing struck a measured tone in urging further diplomacy.

• April industrial production rose +0.7% (vs. consensus +0.3%) and vs March -0.3%; April mining output -0.1% (March -1.6%), Utilities output +1.9% (March -1.4%). Capacity use rate 76.1% (consensus 75.8%) vs March 75.7% (previous 75.7%) and April manufacturing output +0.6% (consensus +0.2%) vs March +0.1%.
• Japan’s Producer Price Index surged 4.9% y/y in April (above est. 3.0%, prev. 2.9%), the highest since 2023, with m/m at 2.3% (vs. est. 0.8%, prev. 1.0%). The acceleration was driven by petroleum and coal products, consistent with the Hormuz energy shock. Import prices jumped 17.5% y/y (vs. prior 8.0%) with petroleum/coal/gas again a main factor and export prices ran at 18.9% y/y (vs. prior 12.2%).

• In Trucking/Logistics: CHRW was upgraded to Buy at Citigroup saying the SCOTUS Montgomery decision adds complexity but benefits scale; but with its recent sell-off from its February peak offering upside as it moves into its target return range with opportunity for share gains. RXO was upgraded from Hold to Buy at Stifel saying Supreme Court ruling creates an opening; sees a more favorable setup emerging into the balance of 2026, with the company positioned at the intersection of improving Brokerage fundamentals and healthy idiosyncratic levers.
• Industrials: JP Morgan downgraded ALLE to neutral and AOS to Underweight and upgraded TKR to Neutral in Smallcap Industrials saying Q126 results revealed clear sector divergences within SMid Cap Industrials: the group rose 14.5% YTD, with Automation (+41.7%) and E&C (+2.2%) outperforming, Specialty down (-4.0%), and Building Products lagging (–4.9%) amid cost inflation and weak housing. Reflecting these shifts, JPMC upgrades TKR from UW to N as execution improved and sector momentum rotated and downgrades ALLE from Overweight to N due to margin and construction headwinds, and shift AOS to UW, taking a more cautious sector stance given its China and residential exposure.

• CHRW +1%; was upgraded to Buy at Citigroup saying the SCOTUS Montgomery decision adds complexity but benefits scale; but with its recent sell-off from its February peak offering upside as it moves into its target return range with opportunity for share gains.
• DXCM +4%; after the company gave long-term growth outlook at its investor day that impressed analysts. While activist investor Elliott Investment Management took a stake in the company and struck a settlement that will put two Independent directors on the board.
• FIG +11%; impressive Q1, with rev growth of 46% Y/y, a rev beat of 5.5% (strongest beat by far since the IPO), and NDR of 139% (highest in 2+ yrs); Q2 rev growth guidance midpoint for 40% Y/y was 9 pts ahead of consensus and raised the FY26 rev growth midpoint to 35% Y/y (vs. ~30% prior).
• GEMI +24%; reported a smaller-than-expected quarterly loss and its founders injected $100 million into the business. The investment was made by Winklevoss Capital Fund at $14 per share, with payment in bitcoin; Q1 Exchange revenue decreased 27% Y/y to $17.2M.
• GLOB +17%; Q1 revenues came in ahead of expectations, while EPS was in-line with estimates, growth was driven by its Ai-integrated delivery resonating with clients, driving growth with its top client clients (top 50 grew 5.2%), and margins were impacted by ~100bps due to FX.
• PZZA +5%; Reuters reported Investment firm Irth Capital is working with Papa John’s largest U.S. franchisee, who operates roughly 10% of domestic stores, on a potential take-private deal that would include a significant investment from franchise operator Nadeem Bajwa https://tinyurl.com/4c5yc6ea
• RXO +11%; was upgraded from Hold to Buy at Stifel saying Supreme Court ruling creates an opening; sees a more favorable setup emerging into the balance of 2026.

• AARD -26%; after saying the FDA placed a full clinical hold on its drug to treat extreme hunger linked to the rare disorder Prader-Willi syndrome, halting all late-stage trials (shares downgraded at BTIG and Morgan Stanley on news).
• AMAT -2%; despite strong quarter and beat and raise as semis seeing some profit taking early; AMAT reported better than expected Q2 and provided Q3 outlook above the Street as guides Q3 revs $8.45-9.45B vs est $8.089B and adj EPS $3.16-3.56 vs est $2.88.
• DLO -8%; posted mixed quarterly results as revs beat but EPS came up short of consensus estimates; Q1 EPS $0.14 vs. $0.15 est.; Q1 revs rose 55% y/y to $335.9M vs. est. $333.1M.
• FRMI -5%; after being downgraded at Evercore ISI on the power plant development company to in line from outperform after recent executive departures.
• GAMB -39%; shares tumble after Q1 miss and lower guide; Q1 EBITDA came in below Street tests, resulting in a 2026 guide down largely driven by EU regulatory headwinds and a continued poor SEO environment; announced  a ~25% workforce reduction and recently announced mgmt succession plan
• HL -8%; Precious metal miners (gold and silver) AG, AEM, CDE, B, PAAS, WPM and more saw notable declines following a rout in silver and gold prices as Treasury yields surged and the dollar extended weekly gains on rising inflation concerns and rising chances of Fed rate hikes given recent bout of economic data.
• POET -8%; after earnings results and following secondary (enters $400M Offering Agreement For 19M Shares With Single Institutional Investor) announcement.
• VIK -2%; downgraded at Morgan Stanley while raising its estimates and price target (to $86) on the back of a stronger 2027 booking curve more than offsetting near-term cost pressures. The change comes as their bull thesis has largely played, leaving a more balanced risk reward and fairly valued stock.
• YSS -18%; shares fell despite Q1 revs rising 9% to $116M, above consensus $109.6M and still see FY26 revenue $545M-$595M, compared to consensus $567.74M.