Mid-Morning Look: May 22, 2026

Mid-Morning Look

Friday, May 22, 2026

U.S. stocks on cruise control, with the Dow Jones Industrial Average, and S&P 500 hitting new all-time highs as oil prices fall (initially) on rising optimism about a deal between the U.S. and Iran coming soon following upbeat commentary, with hopes the Strait of Hormuz reopens, lowering inflation fears as Treasury yields ease a second day after surging the last few weeks. Gold on track for second weekly loss as the US dollar trades near 6-week highs. Good bounce in beaten up software names as WDAY and ZM report better earnings/guidance overnight. Iran’s foreign minister met Pakistan’s interior minister on Friday to discuss proposals to end the U.S.-Israeli war, Iranian media reported. Tehran and Washington remain at odds over Tehran’s uranium stockpile and controls on the Strait of Hormuz. With the US and Iran both still committed to end the war via diplomacy, oil prices continue to trade well below this week’s highs set on Monday. Oil has since bounced, now up on the day after tumbling Thursday, but major US averages remain buoyed by tech as XLK +1% among leaders with Healthcare (XLV +1.35), but 10 of 11 S&P sectors higher. Just higher for longer for stocks while sentiment data comes in weak and inflation expectations rise.

• University of Michigan surveys of consumers 1-year inflation outlook final May 4.8% vs prelim 4.5% and final April 4.7%. University of Michigan surveys of consumers 5-year inflation outlook final May 3.9% vs prelim 3.4% and final April 3.5%.

• In Restaurants: SG was upgraded to Overweight from Neutral at JP Morgan and raise tgt to $13 from $8 following an encouraging meeting with management saying under new management, Sweetgreen has been aggressive at adopting new products people actually want to eat, like wraps. CAVA was upgraded to Buy at Argus after earnings noting restaurant traffic is improving and the stock trend has turned bullish, gaining 18% the last 3 months compared to a gain of 8% for the S&P 500.
• Quantum stocks RGTI extend gains a day after media reports The Trump administration is awarding $2B in grants to nine Quantum-computing companies, including U.S. government equity stakes. IBM will receive $1B of the package, with GlobalFoundries (GFS) getting $375M. D-Wave Quantum (QBTS), Rigetti Computing (RGTI), and Infleqtion (INFQ) are also expected to be awarded funds. Under the terms of the deals, which still need to be finalized, the government will receive a minority equity stake in each Quantum company. Shares of other quantum names IONQ, QMCO, QUBT BTQ also seeing recent momentum.

• EL +12%; after the company and Spanish beauty group Puig (PUBGY) said they have terminated discussions of a potential business combination. Following the termination of negotiations, Estée Lauder reaffirmed its focus on its “Beauty Reimagined” strategy, emphasizing continued execution as an independent company.
• IMAX +16%; after reports the company has approached other entertainment companies as potential buyers and the sale process is still in the early stages, The Journal reported, citing people familiar with the situation. https://tinyurl.com/5n6pat6y
• MRK +4%; said its antibody-drug conjugate developed by China’s Kelun-Biotech was dramatically more potent than Keytruda alone in a Phase 3 lung cancer study. Sacituzumab tirumotecan, licensed by Merck, cut the risk of tumor progression by 65% in patients with newly diagnosed non-small cell lung cancer with PD-L1 expression when it was combined with Keytruda, compared to Keytruda alone.
• ROST +7%; shares rallied on results as reported an earnings beat, driven by comps of up 17% and raised its annual comparable sales and profit forecast; raises FY2026 EPS guidance to $7.50-$7.74 (up about 13%-17%) and sees FY2026 same‑store sales growth about 6%-7%.
• SG +8%; was upgraded to Overweight from Neutral at JP Morgan and raise tgt to $13 from $8 following an encouraging meeting with management saying under new management, Sweetgreen has been aggressive at adopting new products people actually want to eat.
• WDAY +5%; reported upside to consensus estimates on both revenue and operating Income, with sales better while the company left FY27 subscription guidance unchanged at 12-13% but tweaked operating margin higher by 50 bps to 30.5%; one negative was Q2 cRPO guide 13.5-14.5% vs 14.4% consensus.
• ZM +11%; delivered a Q1 beat and raise, with revenue, operating Income, PF EPS, and FCF all ahead of expectations and the company guided FY27 revenue and EPS higher; Q1 revs +5.5% y/y (4.6% in CC) above the +4.2% consensus and FY27 revenue guide was raised by $15M (~same as beat) to +4.4% growth.

• DNLI -3%; shares slide after the company and partner BIIB said they will discontinue development of their Parkinson’s drug after it failed to meet the main goal in a mid-stage study; they said the drug, BIIB122, did not slow disease progression compared with placebo.
• FUTU -27%; along with TIGR after being penalized by Chinese securities regulators for operating on the mainland without a license. The China Securities Regulatory Commission said it intends to confiscate all “illegal gains” from both the domestic and overseas entities of the firms and will impose severe penalties.
• INSP -4%; downgraded from Neutral to Underperform at Bank America and cut tgt to $39 from $53 saying without a smooth and consistent coding pathway for Centers, sees higher risk to estimates and does not see the stock working until there’s more clarity on coding as firm lowers estimates.
• SMMT -4%; on competition concerns as MRK and partner Sichuan Kelun-Biotech said their experimental cancer treatment combined with Merck’s Keytruda met the main goal of a late-stage study, reducing the risk of lung cancer progression or death by about 65% (SMMT is developing a lung cancer treatment called ivonescimab)