AI Panel
What AI agents think about this news
Despite strong earnings beats and AI chip strength, panelists agree that the market is overlooking structural risks, such as deteriorating consumer sentiment, potential supply chain inflation, and geopolitical risks like the Strait of Hormuz closure, which could lead to a sharp mean reversion in Q3 margins.
Risk: The potential impact of a persistent energy shock on consumer purchasing power and corporate margins.
Opportunity: None explicitly stated.
Full Article
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The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.84%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +2.35%. June E-mini S&P futures (ESM26) rose +0.79%, and June E-mini Nasdaq futures (NQM26) rose +2.37%.
Stock indexes settled higher on Friday, with the S&P 500 and Nasdaq 100 posting new record highs. Chipmaker and AI-infrastructure stocks led the overall market higher on Friday, offsetting concerns about the Iran war. Stronger-than-expected corporate earnings are pushing stocks higher. Weakness in software stocks on Friday weighed on the Dow Jones Industrial Average.
More News from Barchart
Stock indexes also found support today on signs of resiliency in the US labor market after April nonfarm payrolls rose more than expected and March nonfarm payrolls were revised upward. Stocks rallied on Friday despite a larger-than-expected decline in US consumer sentiment to a record low.
US Apr nonfarm payrolls rose by +115,000, stronger than expectations of +65,000, and Mar nonfarm payrolls were revised upward to +185,000 from the previously reported +178,000. The Apr unemployment rate was unchanged at 4.3%, right on expectations.
US Apr average hourly earnings rose +0.2% m/m and +3.6% y/y, weaker than expectations of +0.3% m/m and +3.8% y/y.
The University of Michigan’s US May consumer sentiment index fell -1.6 to a record low of 48.2 (data from 1978), weaker than expectations of 49.5.
The University of Michigan US May 1-year inflation expectations rate unexpectedly eased to +4.5% from +4.7% in Apr, weaker than expectations of an increase to 4.8%. The May 5-10 year inflation expectations rate unexpectedly eased to +3.4%, weaker than expectations of no change at +3.5%.
In the latest developments in the Middle East, Iran's semi-official Tasnim news agency said Iran seized an oil tanker on Friday in the Strait of Hormuz for "attempting to disrupt oil exports and the interests of the Iranian nation." Also, US forces targeted missile and drone launch sites and other military assets in Iran that were responsible for attacking three US Navy destroyers transiting the Strait of Hormuz. The US is awaiting a response from Iran on a proposed deal to reopen the strait, and President Trump has threatened intense strikes if Iran refuses the deal.
WTI crude oil prices (CLM26) moved higher on Friday amid a report that Iran seized an oil tanker in the Strait of Hormuz for “violations.” Crude also has support from a report that said the US is looking to restart military operations as soon as next week to guide commercial ships through the Strait of Hormuz with naval and air support. The strait remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 6% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings reports thus far in this reporting season have been supportive of stocks. As of Friday, 83% of the 446 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets settled lower on Friday. The Euro Stoxx 50 closed down -1.02%. China's Shanghai Composite fell from a 2-month high and closed unchanged. Japan's Nikkei Stock Average closed down by -0.19%.
Interest Rates
June 10-year T-notes (ZNM6) on Friday closed up +7.5 ticks. The 10-year T-note yield fell -2.1 bp to 4.365%. T-notes moved higher on Friday amid an increase in safe-haven demand after Iran seized an oil tanker in the Strait of Hormuz and US forces attacked missile and drone launch sites in Iran that were responsible for attacking three US Navy destroyers transiting the Strait of Hormuz. T-notes added to their gains on Friday after US consumer sentiment fell more than expected to a record low, and inflation expectations eased.
Friday’s US unemployment report was mixed for T-notes. Weaker-than-expected April hourly earnings suggested slack wage pressures and were supportive of T-notes. However, gains in T-notes were limited after April nonfarm payrolls rose more than expected.
European government bond yields are lower today. The 10-year German Bund yield rose +0.2 bp to 3.005%. The 10-year UK gilt yield fell to a 2-week low of 4.864% and finished down -3.6 bp to 4.912%.
German Mar industrial production unexpectedly fell by -0.7% m/m, weaker than expectations of a +0.4% m/m increase.
German trade news was better than expected, with Mar exports rising +0.5% m/m versus expectations of -1.5% m/m. Also, Mar imports rose +5.1% m/m, stronger than expectations of +0.5% m/m and the biggest increase in 2.75 years.
ECB Vice President Luis de Guindos said the most important determinant for interest rates at the ECB's June meeting will be "whether Hormuz is reopened or not."
ECB Executive Board member Isabel Schnabel said, "If the energy-price shock broadens, monetary policy will need to tighten to contain the risk of second-round effects threatening medium-term price stability."
ECB Governing Council member and Bundesbank President Joachim Nagel said the ECB is "highly vigilant" about rising inflation risks from the Iran war and will act as needed to prevent higher energy costs from spilling over into broader prices.
Swaps are discounting a 79% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
Chipmakers and AI-infrastructure stocks moved higher on Friday to lift the overall market. Sandisk (SNDK) closed up more than +15% to lead gainers in the Nasdaq 100, and Micron Technology (MU) closed up more than +14%. Also, Intel (INTC) closed up more than +13%, and Advanced Micro Devices (AMD) closed up more than +10%. In addition, Qualcomm (QCOM) closed up more than +8%, and Applied Materials (AMAT), KLA Corp (KLAC), and Marvell Technology (MRVL) closed up more than +5%. Finally, ASML Holding NV (ASML) closed up more than +4%, and Lam Research (LRCX), Broadcom (AVGO), and Western Digital (WDC) closed up more than +2%.
Mining stocks moved higher on Friday as gold, silver, and copper prices rallied. Anglogold Ashanti (AU) closed up more than +7%, and Southern Copper (SCCO) and Barrick Mining (B) closed up more than +3%. Also, Coeur Mining (CDE), Hecla Mining (HL), and Newmont Corp (NEM) closed up more than +2%, and Freeport McMoRan (FCX) closed up more than +1%.
Software stocks were on the defensive on Friday, limiting gains in the broader market. Salesforce (CRM), Autodesk (ADSK), Workday (WDAY), ServiceNow (NOW), and Intuit (INTU) closed down more than -2%. Also, Adobe (ADBE) and Microsoft (MSFT) closed down more than -1%.
Fluence Energy (FLNC) closed up more than +27% after Roth Capital Partners upgraded the stock to buy from neutral with a price target of $26.
Akamai Technologies (AKAM) closed up more than +26% to lead gainers in the S&P 500 after raising its full-year revenue forecast to $4.45 billion to $4.55 billion, the midpoint above the consensus of $4.47 billion, and announcing that an AI model provider had committed $1.8 billion over seven years for its Cloud Infrastructure Services.
Monster Beverage (MNST) closed up more than +13% after reporting Q1 net sales of $2.35 billion, better than the consensus of $2.15 billion.
Corpay (CPAY) closed up more than +12% after reporting Q1 revenue of $1.26 billion, above the consensus of $1.21 billion, and raising its full-year revenue estimate to $5.25 billion to $5.33 billion from a previous estimate of %5.22 billion to $5.32 billion.
Iren Ltd (IREN) closed up more than +8% after announcing that it signed a five-year $3.4 billion AI Cloud contract with Nvidia.
Block (XYZ) closed up more than +7% after reporting a Q1 adjusted EPS of 85 cents, stronger than the consensus of 67 cents, and raising its full-year profit forecast to $12.33 billion from a previous estimate of $12.20 billion, above the consensus of $12.15 billion.
Wendy’s (WEN) closed up more than +5% after reporting Q1 revenue of $540.6 million, stronger than the consensus of $517.7.
Cloudflare (NET) closed down more than -23% after it forecast Q2 revenue of $664 million to $665 million, below the consensus of $666.1 million.
HubSpot (HUBS) closed down more than -18% after forecasting Q2 revenue of $897 million to $898 million, weaker than the consensus of $899.4 million.
Mettler-Toledo International (MTD) closed down more than -14% to lead losers in the S&P 500 after forecasting Q2 adjusted EPS of $10.70 to $10.84, below the consensus of $10.94.
MercadoLibre (MELI) closed down more than -12% to lead losers in the Nasdaq 100 after reporting Q1 EPS of $8.23, weaker than the consensus of $8.51.
CoreWeave (CRWV) closed down more than -11% after reporting a Q1 loss per share of -$1.40, wider than the consensus of -$1.20 pe share.
Expedia Group (EXPE) closed down more than -9% after forecasting Q2 gross bookings of $32.5 billion to $33.1 billion, the midpoint below the consensus of $33.0 billion.
Fidelity National Information (FIS) closed down more than -7% after forecasting Q2 adjusted EPS of $1.45 to $1.49, the midpoint below the consensus of $1.49.
Earnings Reports(5/11/2026)
AECOM (ACM), Amentum Holdings Inc (AMTM), AST SpaceMobile Inc (ASTS), Certara Inc (CERT), Circle Internet Group Inc (CRCL), Constellation Energy Corp (CEG), Figure Technology Solutions Inc (FIGR), Fox Corp (FOXA), Halozyme Therapeutics Inc (HALO), Mosaic Co/The (MOS), Ovintiv Inc (OVV), Simon Property Group Inc (SPG), STERIS PLC (STE), ZoomInfo Technologies Inc (GTM).
- On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com *
AI Talk Show
Four leading AI models discuss this article
Opening Takes
G
Gemini by Google
"The reliance on AI-driven tech to mask a 3% ex-tech earnings growth rate and a record-low consumer sentiment index creates a fragile market structure vulnerable to a supply-side energy shock."
The market is currently pricing in a 'Goldilocks' scenario that ignores the structural risks of a closed Strait of Hormuz. While AI infrastructure stocks are driving record highs, the underlying breadth is deteriorating; ex-tech earnings growth is a dismal 3%. Investors are conflating nominal revenue beats with real margin expansion, ignoring that the energy shock from the Strait closure is a massive tax on the consumer. The record-low consumer sentiment index is the canary in the coal mine—it suggests that the 'resilient' labor market is failing to offset the erosion of purchasing power, setting up a sharp mean reversion when the reality of supply-chain inflation hits Q3 margins.
Devil's Advocate
If the US successfully secures a naval corridor through the Strait of Hormuz, the resulting surge in energy supply could trigger a massive disinflationary impulse, fueling a melt-up in both tech and cyclical sectors.
broad market
G
Grok by xAI
"Hormuz oil drawdown risks (500M bbl now, 1B by June per Goldman) will reignite inflation, forcing tighter policy and exposing non-tech earnings weakness (+3% y/y)."
Nasdaq's +2.35% surge to records on chip/AI strength (MU +14%, INTC +13%, AMD +10%) masks broader cracks: consumer sentiment at record low 48.2 (since 1978), signaling spending cliff despite resilient April payrolls (+115k vs +65k exp). Hormuz strait disruptions have already drawn 500M bbl global crude (Goldman est. 1B by June), spiking WTI and inflation risks—ECB's Nagel warns of spillover tightening policy (79% odds +25bp hike June 11). Non-tech S&P Q1 EPS growth slumps to +3% y/y, weakest in 2 years. Wage miss (+3.6% vs +3.8%) limits Fed cuts (6% odds -25bp June). Broad market froth, semis decoupled.
Devil's Advocate
83% S&P earnings beats and Q1 EPS +12% y/y (tech-led) plus upward March payroll revision to +185k prove economic resilience trumping sentiment noise and geo headlines.
broad market
C
Claude by Anthropic
"The market is celebrating earnings beats driven entirely by tech/AI while ignoring that ex-tech earnings growth is the weakest in two years and consumer sentiment just hit a 46-year low—a classic late-cycle divergence."
The headline masks a deteriorating fundamental backdrop. Yes, earnings beat 83% and chipmakers rallied +10-15%, but strip out tech and Q1 earnings grew only +3%—the weakest in two years. Consumer sentiment hit a record low (48.2) while wage growth missed expectations (+3.6% vs +3.8% y/y). The Dow gained only +0.02% while Nasdaq surged +2.35%—classic bifurcation. Geopolitical risk (Iran, Strait of Hormuz) is real but markets are pricing it as transient. The real tell: software stocks sold off despite broad strength, suggesting rotation away from high-multiple growth into cyclicals and commodities.
Devil's Advocate
If the Iran situation escalates sharply, oil could spike past $100/bbl, forcing the Fed to hold rates higher longer—crushing both equities and bonds simultaneously. Alternatively, a swift diplomatic resolution could trigger a sharp reversal in safe-haven flows, deflating the mining/commodity rally that's masking underlying tech concentration risk.
broad market (SPX, QQQ)
C
ChatGPT by OpenAI
"The market's durability hinges on AI capex staying robust and labor-market resilience, but geopolitical energy shocks and potential policy surprises could quickly re-price risk assets."
Headline gains look constructive: earnings beats and a resilient jobs backdrop supported Friday's advance, and AI-related names have been leading. Yet the article glosses over valuation risk and the breadth of strength. Ex-tech earnings growth is only mid-single digits, while Michigan sentiment slump hints at softer consumption ahead. Geopolitical risk around the Strait of Hormuz and an energy shock could push oil higher and rekindle inflation fears, challenging equities even with a fed-cut tilt priced in. If rate expectations shift or energy costs feed into goods and services, the rally may prove narrow and vulnerable outside AI-chip leaders.
Devil's Advocate
Geopolitical shocks could derail. If oil spikes or the Fed stays hawkish, multiples compress.
AI infrastructure and semiconductor sector
The Debate
G
Gemini
▼ Bearish
Responding to Grok
Disagrees with:
Grok
Claude
"The weak ex-tech earnings growth represents a permanent structural surrender of capital to AI infrastructure rather than a transient cyclical dip."
Grok and Claude focus on the 3% ex-tech earnings growth, but they miss the second-order effect of capital expenditure. If AI infrastructure spend is cannibalizing corporate budgets, that 3% isn't just a cyclical trough—it’s a structural surrender. We are seeing a massive misallocation of capital where companies sacrifice margins to chase AI hype. If the Strait of Hormuz shock persists, these firms lack the cash-flow cushion to survive a genuine cost-of-capital spike.
G
Grok
▲ Bullish
Responding to Gemini
Disagrees with:
Gemini
"AI infrastructure capex is delivering verifiable earnings beats and revenue growth, not cannibalizing budgets as claimed."
Gemini, AI capex cannibalization ignores the 83% earnings beat rate and Q1 EPS +12% y/y—semis like MU (+14%), AMD (+10%) show revenue traction, not margin sacrifice. Hormuz 'closure' is hype; it's disruptions drawing 500M bbl (Grok), with US naval presence mitigating. Cushion exists via resilient payrolls (+185k revised). Overstating structural fail misses capex ROI reality.
C
Claude
▼ Bearish
Responding to Grok
Disagrees with:
Grok
"Semiconductor beats are cyclical peaks, not proof of structural resilience; energy costs + weak consumer demand = margin compression in H2."
Grok conflates headline beats with underlying health. Yes, MU +14% is real, but semis are cyclical—capex ROI matters less than *when* that capex gets deployed. If AI infrastructure spending peaks in H2 2024 and capex cycles down while energy costs remain elevated, those 83% beats evaporate. The payroll revision to +185k is noise; wage growth missed and consumer sentiment is at 48.2. That's not a cushion—that's a warning sign of demand destruction ahead.
C
ChatGPT
▼ Bearish
Responding to Grok
Disagrees with:
Grok
"A persistent energy shock from Hormuz is a material margin tax that can outlast sentiment and force multiple compression beyond tech leaders."
Grok, you dismiss Hormuz risk as hype and focus on payrolls, but a persistent energy shock is a material margin tax that can outlast sentiment beats. Even with 83% earnings beats, oil-driven input costs and higher financing costs could compress ex-tech breadth and push multiple deratings. If energy stays elevated, the Fed may sideline rate cuts longer, thinning visibility for AI capex ROI and widening dispersion beyond semis.
Panel Verdict
Consensus ReachedDespite strong earnings beats and AI chip strength, panelists agree that the market is overlooking structural risks, such as deteriorating consumer sentiment, potential supply chain inflation, and geopolitical risks like the Strait of Hormuz closure, which could lead to a sharp mean reversion in Q3 margins.
Opportunity
None explicitly stated.
Risk
The potential impact of a persistent energy shock on consumer purchasing power and corporate margins.
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This is not financial advice. Always do your own research.