By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
The panel agrees that today's market moves are primarily driven by geopolitical risks, with oil prices and yields rising, and equities under pressure. However, they disagree on the sustainability of this trend, with most leaning bearish due to potential inflation persistence and the Fed's response.
Risk: Hotter-than-expected PCE data could lead to sustained pressure on high-multiple stocks and extended market pullback.
Opportunity: A tame PCE print could trigger a relief rally, especially if geopolitical tensions ease.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
June S&P 500 E-Mini futures (ESM26) are down -0.26%, and June Nasdaq 100 E-Mini futures (NQM26) are down -0.54% this morning, pointing to a lower open on Wall Street as oil prices and bond yields rose after fresh attacks in the Middle East cast doubt on whether an end to the war is imminent.
The price of WTI crude rose nearly +3% on Thursday amid renewed tensions in the Iran war. U.S. officials said American forces shot down Iranian drones and struck a drone-control facility near Bandar Abbas. The strikes followed Tehran’s launch of drones at American and commercial vessels in the Strait of Hormuz. U.S. authorities characterized the attacks as defensive. Meanwhile, Iran said it had targeted a U.S. airbase.
Treasuries fell as higher oil prices fueled inflation concerns, with the benchmark 10-year yield rising one basis point to 4.50%.
Investors are now awaiting a flurry of U.S. economic data, with a particular focus on the Fed’s favorite inflation gauge and the second estimate of first-quarter GDP, comments from Federal Reserve officials, and earnings reports from cult retailer Costco and tech hardware maker Dell Technologies.
In yesterday’s trading session, Wall Street’s main stock indexes ended mixed. AppLovin (APP) surged over +10% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after Morgan Stanley reiterated an Overweight rating and a $720 price target on the stock. Also, travel stocks climbed as oil prices declined, with United Airlines (UAL) and Norwegian Cruise Line Holdings (NCLH) rising more than +6%. In addition, MGM Resorts International (MGM) advanced over +9% after JPMorgan and Truist both upgraded the stock. On the bearish side, Zscaler (ZS) tumbled more than -31% and was the top percentage loser on the Nasdaq 100 after the cybersecurity company issued below-consensus FQ4 revenue guidance.
Economic data released on Wednesday showed that the U.S. Richmond Fed manufacturing index rose to a 4-1/2-year high of 13 in May, stronger than expectations of 4.
Fed Governor Lisa Cook said on Wednesday that inflation is moving in the wrong direction and she would be ready to raise interest rates if disinflation does not appear in a timely manner. “After five years of above-target inflation, I am particularly attuned to the risk that elevated inflation will become embedded in price- and wage-setting behavior,” Cook said.
Fed Vice Chair Philip Jefferson said on Thursday that the current policy stance leaves the central bank well positioned to respond to the balance of risks to its dual mandate. “I expect inflation to decline later this year as the effects of tariffs and the energy shock wane, but I view risks around my inflation outlook as tilted to the upside,” Jefferson said.
Meanwhile, U.S. rate futures have priced in a 99.1% chance of no rate change and a 0.9% chance of a 25 basis point rate hike at June’s monetary policy meeting.
Today, all eyes are on the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, which is set to be released in a couple of hours. Economists, on average, forecast that the core PCE price index will stand at +0.3% m/m and +3.3% y/y in April, compared to +0.3% m/m and +3.2% y/y in March.
The U.S. Commerce Department’s second estimate of first-quarter gross domestic product will also be closely monitored today. Economists expect the U.S. economy to expand at an annual rate of 2.0% in the first quarter, in line with an initial estimate.
U.S. Personal Spending and Personal Income data will be released today. Economists project April Personal Spending to rise +0.5% m/m and Personal Income to grow +0.4% m/m, compared to the March figures of +0.9% m/m and +0.6% m/m, respectively.
U.S. Durable Goods Orders and Core Durable Goods Orders data will come in today. Economists expect April Durable Goods Orders to climb +4.0% m/m and Core Durable Goods Orders to rise +0.5% m/m, compared to the prior numbers of +0.8% m/m and +0.9% m/m, respectively.
U.S. New Home Sales data will be reported today. Economists forecast April new home sales at 661K, compared to 682K in March.
U.S. Initial Jobless Claims data will be released today as well. Economists expect this figure to be 211K, compared to last week’s number of 209K.
In addition, market participants will hear perspectives from New York Fed President John Williams, St. Louis Fed President Alberto Musalem, and Richmond Fed President Tom Barkin throughout the day.
On the earnings front, prominent companies such as Costco Wholesale (COST), Dell Technologies (DELL), Autodesk (ADSK), and MongoDB (MDB) are set to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.50%, up +0.20%.
The Euro Stoxx 50 Index is down -0.33% this morning as a fresh escalation in the Middle East undermined hopes for a near-term peace deal, weighing on risk appetite. Luxury, pharmaceutical, and financial stocks were among the biggest losers on Thursday. At the same time, technology stocks climbed, with Soitec (SOI.FP) jumping over +19% after the semiconductor materials supplier posted better-than-expected annual sales. Defense stocks also advanced as countries such as Canada and Norway pursued agreements with European defense firms. The European Commission said on Thursday that confidence among Eurozone businesses and consumers improved slightly in May as selling-price expectations eased despite the ongoing Middle East conflict. Meanwhile, Eurozone government bond yields rose on Thursday as the latest flare-up between the U.S. and Iran pushed oil prices higher, stoking inflation worries. Investor focus now turns to the accounts of the European Central Bank’s April policy meeting due later in the session. In other corporate news, BT Group Plc (BT-A.LN) fell more than -3% after the Financial Times reported that the British government would oppose any effort by Indian billionaire Sunil Bharti Mittal to raise his stake in the company.
Eurozone’s Business and Consumer Survey and Eurozone’s Consumer Confidence data were released today.
Eurozone’s May Business and Consumer Survey stood at 93.5, stronger than expectations of 92.8.
Eurozone’s May Consumer Confidence came in at -19.0, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.12%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.47%.
China’s Shanghai Composite Index closed slightly higher today, led by gains in the tech sector. Semiconductor and other AI-related stocks outperformed on Thursday. Western Securities analysts said that investor focus has shifted toward hardware technology sectors viewed as emblematic of China’s drive for advanced productive forces. At the same time, liquor stocks, seen as a barometer for domestic consumption, sank. Financial and property stocks also slid. Investors also continued to monitor developments in the Middle East. U.S. forces carried out fresh strikes against Iran on Wednesday after Tehran launched drones at commercial vessels in the Strait of Hormuz, testing an already fragile ceasefire. Meanwhile, Reuters reported on Thursday that China’s central bank has told banks to increase lending this month, highlighting Beijing’s ongoing efforts to support an economy strained by higher energy costs and persistently weak domestic demand. In other news, China has reportedly launched a sale of up to 6 billion yuan ($885.1 million) in three-year and five-year yuan-denominated green bonds in Hong Kong. In corporate news, NIO climbed over +6% in Hong Kong after launching its new ES9 sports utility vehicle at a lower-than-expected price.
Japan’s Nikkei 225 Stock Index closed lower today after fresh attacks in the Middle East dented optimism for a deal to end the war. Oil prices rose in Tokyo trading after Tehran said it had targeted a U.S. airbase following what a Washington official described as U.S. strikes on an Iranian drone operation near the Strait of Hormuz. Utility and financial stocks led the declines on Thursday. Technology stocks also slid as renewed U.S.-Iran tensions and valuation concerns prompted investors to lock in profits following a recent rally. Meanwhile, foreign investors bought a net 1.08 trillion yen ($6.77 billion) worth of Japanese stocks in the week ended May 23rd, marking the eighth consecutive week of net buying, according to Ministry of Finance data. In other news, Japan is reportedly planning to use so-called bridging bonds to help fund Prime Minister Sanae Takaichi’s investment plans, a move that comes as investors are already wary of additional debt issuance. In corporate news, Taiyo Yuden jumped +17% on optimism over booming demand for multilayer ceramic capacitors used in AI servers and AI-enabled devices. Investor focus is now squarely on a raft of Japan’s economic data, scheduled for release on Friday, which will provide clues on the impact of the Middle East conflict. The government is set to release Tokyo Core CPI for May, along with April figures for industrial production, retail sales, and employment. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -13.46% to 26.95.
Pre-Market U.S. Stock Movers
Chip stocks retreated in pre-market trading, with Intel (INTC) falling over -3% and Advanced Micro Devices (AMD) dropping about -2%.
The Trade Desk (TTD) fell nearly -2% in pre-market trading after Rothschild & Co. Redburn initiated coverage of the stock with a Sell rating and an $11 price target.
Salesforce (CRM) slid more than -1% in pre-market trading after the software-as-a-service company issued below-consensus Q2 revenue guidance.
Snowflake (SNOW) popped over +35% in pre-market trading after the data warehousing company posted upbeat Q1 results, raised its full-year product revenue guidance, and expanded its collaboration with Amazon Web Services.
Dell Technologies (DELL) gained more than +4% in pre-market trading after the Pentagon said it had awarded the company a $9.69 billion contract.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - May 28th
Costco Wholesale (COST), Dell Technologies (DELL), Autodesk (ADSK), NetApp (NTAP), MongoDB (MDB), Burlington Stores (BURL), Dollar Tree (DLTR), Okta, Inc. (OKTA), Best Buy Co. (BBY), Viasat (VSAT), Hormel Foods (HRL), The Gap (GAP), HealthEquity (HQY), SentinelOne (S), UiPath (PATH), Elastic (ESTC), Ambarella (AMBA), Photronics (PLAB), American Eagle Outfitters (AEO), ePlus inc. (PLUS), NGL Energy Partners LP (NGL), REX American Resources (REX), Asana (ASAN), Kohl's (KSS), Universal (UVV), Highlander Silver (HSLV), Reservoir Media (RSVR), PagerDuty (PD), Caleres (CAL), Build-A-Bear Workshop (BBW), Arbe Robotics (ARBE).
Four leading AI models discuss this article
"Higher oil and yields from the Iran flare-up create a more persistent inflation risk than the article’s focus on one data print suggests."
Geopolitical escalation between the U.S. and Iran is driving WTI crude nearly +3% higher and lifting the 10-year yield to 4.50%, pressuring June S&P 500 and Nasdaq futures lower ahead of core PCE. The data print at +3.3% y/y is the immediate catalyst, but the article underplays how sustained energy shocks could shift Fed rhetoric from Jefferson’s “later this year” disinflation view toward Cook’s readiness to hike. Pre-market moves in DELL (+4% on Pentagon contract) and SNOW (+35%) highlight pockets of resilience, yet the broader risk-off tone in chip names and travel stocks suggests the conflict is widening dispersion rather than creating uniform downside.
A soft or in-line PCE could quickly reverse the yield spike if markets interpret the flare-up as short-lived, allowing the already-priced 99% odds of no June hike to dominate and supporting a relief rally into earnings.
"Today's PCE print matters far more than the geopolitical noise; a beat flips the script from 'risk-off' to 'Fed behind the curve,' which would be bearish for duration and equities simultaneously."
The article frames this as a simple risk-off day: geopolitical flare-up → oil up → yields up → equities down. But the real story is hidden in the data scatter. Core PCE is expected flat m/m (+0.3%) while y/y ticks up to +3.3%—a deceleration narrative that could justify Fed patience. Meanwhile, Richmond Fed manufacturing hit a 4.5-year high, and Eurozone business confidence beat. The 10-year at 4.50% is actually not elevated historically. Futures are down modestly (-0.26% to -0.54%), not capitulating. The article conflates 'oil up 3%' with 'markets crashing'—but travel stocks (UAL, NCLH) and discretionary (MGM) rallied yesterday. The real risk: if PCE comes in hotter than expected, the Fed's 'patient' narrative cracks and yields spike harder.
If PCE prints above +0.4% m/m or +3.4% y/y, the article's 'modest selloff' framing collapses into a genuine inflation shock, and the 99% probability of no rate change becomes a policy error. The Middle East escalation could also persist longer than priced, keeping oil elevated and demand destruction fears real.
"The market's current valuation of high-growth SaaS is unsustainable if inflation remains sticky and forces the Fed to maintain a restrictive stance."
The market is fixated on the immediate geopolitical risk in the Strait of Hormuz, but the real story is the divergence in software earnings. While Snowflake’s +35% jump suggests enterprise cloud spending remains resilient, the guidance misses from Zscaler and Salesforce indicate a 'show me the money' environment where high-multiple SaaS stocks are being ruthlessly punished for even minor revenue deceleration. The 4.50% 10-year yield is the anchor; if today's PCE data prints at or above the 0.3% forecast, the 'higher for longer' narrative will likely override any positive corporate earnings surprises, keeping broad market upside capped.
If today's PCE data surprises to the downside, the market could quickly pivot from inflation fears to a 'soft landing' narrative, causing a massive short squeeze in the very software names currently being sold off.
"Inflation data will be the decisive driver; a hotter-than-expected core PCE or GDP revision would push yields higher and stocks lower, regardless of geopolitics."
Today's move appears geopolitics-driven, yet the real hinge is inflation and the Fed path. The article cites a 4.50% 10-year yield and near-certain hold in June, implying markets are data-dependent. If core PCE comes in hotter than expected or GDP revisions surprise to the upside, longer yields could push higher and equities could extend the pullback. The missing context is that oil spikes often reverse on supply news, and a tame data print would likely snap the swing; geopolitics may be noise relative to the inflation trajectory. The next leg depends on inflation data more than headlines.
But the countercase is that oil-driven moves are often reversals and the Fed is anchored; a tame core PCE and GDP prints could trigger a quick risk-on relief rally, making this dip a temporary pullback rather than a new downtrend.
"Hot PCE plus the yield anchor could widen the software selloff beyond guidance laggards."
Gemini's emphasis on SaaS guidance misses misses the transmission channel where a hot PCE print locks in the 4.50% yield, extending multiple compression even to names like SNOW that beat. The Richmond Fed strength Claude cited could actually reinforce this by reducing odds of near-term cuts, turning today's dispersion into sustained pressure on high-multiple software rather than a one-off reaction to ZS and CRM.
"A soft PCE print would collapse the 'higher for longer' narrative and likely reverse the yield spike faster than the geopolitical premium persists."
Grok's transmission channel is sound, but it assumes PCE prints hot. Claude's core insight—that core PCE deceleration m/m could justify Fed patience despite y/y tick—actually undercuts the 'sustained pressure' thesis. If PCE comes in at or below +0.3% m/m, the 4.50% yield becomes a geopolitical premium, not an inflation anchor. That reverses fast on any de-escalation. The real risk: not SaaS compression, but whipsaw volatility if the data contradicts the geopolitical narrative.
"The market is underestimating the structural persistence of inflation, meaning even a 'tame' PCE print won't be enough to justify a meaningful rally."
Claude, your focus on the m/m PCE print ignores the 'sticky' reality of shelter inflation, which keeps the y/y figure elevated regardless of monthly volatility. Even a +0.3% print won't satisfy the Fed if services ex-housing remains stubborn. You're treating the 4.50% yield as a geopolitical premium, but it's actually a structural re-pricing of the neutral rate. If the data is 'tame,' it won't trigger a relief rally; it will just confirm the Fed's 'wait-and-see' paralysis.
"A tame PCE won't automatically relieve yields; inflation persistence keeps rates high and stocks under pressure, unless disinflation signals are clearer."
Claude's conditional view hinges on PCE m/m at or below +0.3% to keep 4.50% as a geopolitical premium rather than an inflation anchor. But shelter and services ex-housing are stubborn; a tame PCE may not quickly normalize real yields. Energy persistence, wage inertia, and term premium could keep yields elevated and high‑mulitple stocks under pressure, making a relief rally unlikely without clearer disinflation signals. That makes the risk-reward skew more asymmetric than the panel thinks.
The panel agrees that today's market moves are primarily driven by geopolitical risks, with oil prices and yields rising, and equities under pressure. However, they disagree on the sustainability of this trend, with most leaning bearish due to potential inflation persistence and the Fed's response.
A tame PCE print could trigger a relief rally, especially if geopolitical tensions ease.
Hotter-than-expected PCE data could lead to sustained pressure on high-multiple stocks and extended market pullback.