Mid-Morning Look: May 26, 2026

Mid-Morning Look

Tuesday, May 26, 2026

New record highs to kick off the week on Wall Street as U.S. stocks surge, with investors returning from the three day holiday weekend in a buying mood with big gains again in technology stocks/sectors as the Philly semi index (SOX) hits another record high (up 20% MTD and 78% YTD after +40% returns last year) alongside a big jump in power stocks, data center plays on several headlines this morning (MOD, NNE, OKLO, WULF – see below). The chase continues as FOMO alive and well on Wall Street since the end of March. Even though peak Q1 earnings is over, still a busy week ahead with many large retailers, Canadian banks, and software/tech set to report (SNPS, DELL, MRVL, CRM, SNOW, CRDO). Momentum just incredible the last 2 months, with the SPY up 9 straight weeks, IWM up 9 of last 10 weeks, the QQQ up 8 of last 9 weeks and the Dow up 7 of last 9 weeks all hitting new highs along the way in an astound bull market run on Ai demand optimism. Today no different as Technology (XLK) up another 2% (+28% YTD) and Industrials (XLI) +12% YTD big winners on AI/power plays. Defensive Energy, Healthcare, Staples down to start

Optimism on Wall Street as oil prices fell on reports the United States and Iran were moving closer to a peace deal that would reopen the Strait of Hormuz, even though Washington and Tehran played down hopes for an imminent breakthrough. Brent crude settled down close to 6% on Monday’s holiday-thinned session yesterday (US Memorial Day) as a US-Iran draft memorandum of understanding firmed up around a 60-day ceasefire extension, the demining and reopening of the Strait of Hormuz, removal of the US naval blockade and a sanctions waiver framework permitting Iranian crude sales. Despite renewed US military action against Iranian forces in the south of the country, markets remain optimistic of an imminent deal to end the Middle East conflict.  US forces targeted Iranian mine-laying boats and missile launchers, but the market reaction is not so dramatic.

Busy week of economic data with GDP and PCE inflation data on Thursday, but higher inflation, rising Treasury yields, and no official accord reached in the Middle East has not weighed on investor minds with Wall Street hedge fund managers trying to still play catch up with stock market returns in what has been one massive stock market chase for nine weeks now.

• In Automation: JP Morgan upgraded shares of ALNT, CGNX, and TKR to Overweight, and reiterating Overweight on RRX, HLIO, and GTES, reflecting its conviction in both robust short-cycle recovery and structural tailwinds from data Centers, Robotics, and humanoids. JPM continues to see its Automation sub-sector outperform the broader market, as “mother machines” signal a clear cyclical inflection and accelerating structural growth. Industry data show a durable rebound in industrial activity, with broad based order strength.
• In Airlines: UBS said they believe any potential conflict resolution in the Middle East can act as a meaningful catalyst for airline stocks. UAL is UBS’s top pick in the space followed by DAL, ALK, AAL and LUV noting JETS has declined -3.5% YTD vs S&P 500 at around +10% and has created a solid opportunity, as the firm updated estimates imply around 50% EPS growth for 2027 for several airlines.
• Semiconductors: Record highs continue daily for the SOX index, up another 4.5% today topping 12,775 with gains in power names, analog, memory, GPU names, CPU names – it hasn’t mattered as the group up 8-% this year already alone (5 months). Huge moves MU, SNDK, WDC, STX yet again.
• In Oil majors: BP shares fall as removes Chairman Albert Manifold with immediate effect; says removal follows serious concerns raised to board related to important governance standards, oversight and conduct. In research, OXY was upgraded to Overweight at Barclays with higher tgt of $72 saying at higher oil prices, the company should reach its debt target and prefunding of the Berkshire preferred stake by the second half of 2027. EXE was downgrade to Equal Weight, at Barclays and lowered PT to $110 (from $127) which reflects the tempered gas outlook and less visible near-term catalyst path despite the discounted valuation.

• MOD +22%; as entered a long-term capacity agreement with one of its data-center customers to supply it with more than $4 billion worth of its cooling products between 2027 and 2029; noted it received a $165 million upfront cash payment from the undisclosed customer.
• MU +14%; lifting memory stocks again after UBS raised its price tgt to $1,625 from $535 saying with LTAs now firmly in place across most of the industry, UBS is again raising C2027 2029 estimates and expect EPS to remain comfortably >$100 throughout the period, with MU generating over $400B in FCF across the same timeframe.
• OKLO +6%; after saying it has been selected by US energy department for advanced talks on using cold war-era plutonium for Nuclear reactor fuel.
• VICR +10%; after raised its Q2 revenue view to $142M from $126M prior and above consensus $125.47M in view of rising product rev and royalties from additional licensee to its power system tech.
• WULF +10%; acquired the “Muskie Data Campus” in Eastern Kentucky, targeting more than 1 GW of AI and HPC data center capacity. The initial 500 MW phase is expected to begin ramping in 2H 2028, with another 500 MW targeted for 2H 2030

• BP -4%; as removes Chairman Albert Manifold with immediate effect; says removal follows serious concerns raised to board related to important governance standards, oversight and conduct.
• EDIT -17%; shares tumbled after 55.6M share Secondary priced at $2.25.
• RACE -4%; revealed its first electric vehicle, the Luce, a $640,000 four-door EV designed with input from former Apple design chief Jony Ive; produces over 1,000 horsepower with a 122 kWh battery and more than 330 miles of range; features a large iPad-style touchscreen while keeping some physical controls.