Nasdaq ends slightly lower as Broadcom slides, Dow climbs to notch a record close
Crude oil is back on the rise on no news about Iran. Both sides are well aware of the clock ticking towards true shortages of petroleum products, but the brinkmanship continues. The market has been looking past the energy issue, as it typically is focused on at least 6-12 months ahead. One way or another, the Strait has to be reopened by then.
The market is much more focused on the incredibly strong earnings forecasts over the next year, with ’26 now expected to produce mid-20% growth for S&P 500 earnings, and further growth into ’27. The AI theme is generating massive spending, and the offsetting risk of job replacement by smart software is now being questioned by recent labor statistics.
This morning’s pullback is modest in the big picture, less than one percent on the heels of a series of recent new all-time highs. Momentum names are still rising, as one new semiconductor name after another is identified as having a critical technology to offer better data center performance. Quantum computing continues to draw interest, though the outlook for software remains volatile.
We are seeing material drawdowns in precious metals and crypto. Both remain well off their highs earlier in the year, with the exception of copper, needed for electronics and power generation. One explanation has been the upcoming massive IPOs, with SpaceX, the largest IPO of all time, raising $75B, due by mid-June. This will be followed by OpenAI raising an estimated $100B, and Anthropic, maybe more than $100B. Google just raised $80B. The thought is that investors will sell their underperforming assets to participate in this fundraising rather than sell other stocks.
The momentum is clearly positive, though some pundits are saying this record run of stocks has left little upside from here. But it’s hard to find sellers with earnings so strong and huge jumps in tech hardware names happening regularly.