| | | Market Snapshot
| Dow | 42865.77 | -1.10 | (0.00%) | | Nasdaq | 19615.85 | -99.11 | (-0.50%) | | SP 500 | 6022.24 | -16.57 | (-0.27%) | | 10-yr Note | +14/32 | 4.412 |
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| | NYSE | Adv 1251 | Dec 1436 | Vol 1.08 bln | | Nasdaq | Adv 1889 | Dec 2506 | Vol 10.3 bln |
Industry Watch
| Strong: Energy, Utilities |
| | Weak: Materials, Consumer Discretionary, Technology, Communication Services, Real Estate |
Moving the Market
-- U.S. and China reach framework agreement; President Trump says deal is done and is pending final approval from President Xi and him
-- Commerce Secretary Lutnick says China tariff rate (55%) won't be changing
-- May CPI report better than expected; eases concerns about tariff-induced inflation pressures
-- Sell-the-news response
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Stocks dip despite cool CPI
11-Jun-25 16:15 ET
Dow -1.10 at 42865.77, Nasdaq -99.11 at 19615.85, S&P -16.57 at 6022.24
[BRIEFING.COM] The stock market finished Wednesday on a lower note after an early push to levels not seen since late February gave way to midday profit taking. The S&P 500 (-0.3%) narrowed this week's gain to 0.4% while the Nasdaq (-0.5%) underperformed, trimming its week-to-date gain to 0.4%. The Dow (unch) outperformed today after lagging earlier this week, which leaves it up 0.2% since last Friday.
Equities climbed out of the gate, emboldened by the May CPI report, which was cooler than expected at the headline (0.1%; Briefing.com consensus 0.2%) and core (0.1%; Briefing.com consensus 0.3%) levels. However, even with the positive month-over-month surprise, year-over-year CPI accelerated to 2.4% from 2.3% in April while Core CPI remained at 2.8% for the third month in a row.
The post-CPI boost overshadowed an underwhelming update from U.S. China talks, which did not result in any groundbreaking agreements. Instead, the two sides agreed to implement what was already agreed upon during a mid-May meeting in Switzerland. In other trade-related news:
- Commerce Secretary Lutnick said that the 55% tariff rate on imports from China will not change.
- U.S. Court of Appeals upheld President Trump's tariffs ahead of a full hearing that will be held this summer.
- The U.S. and India might announce an interim trade deal by the end of the month, according to Reuters.
- A trade deal between the U.S. and the European Union could be made after the July 9 deadline, according to Bloomberg.
- The U.S. is nearing a deal with Mexico to reduce steel tariffs and cap imports, according to Bloomberg.
- The U.S. and Canada have begun exchanging terms on a deal pertaining to trade and security, according to The Globe and Mail.
Seven sectors finished the day in negative territory, but only two lost more than 0.6%. The consumer discretionary sector (-1.0%) ended at the bottom of the leaderboard, weighed down by the reduced likelihood of a change to the tariff rate on imports from China, while the materials sector (-1.0%) also lagged with Nucor (NUE 117.13, -7.55, -6.1%) and Steel Dynamics (STLD 130.03, -3.78, -2.8%) falling sharply amid reports of a likely reduction to tariffs on steel imports from Mexico.
Top-weighted technology (-0.3%) outperformed in early trade before catching down to the broader market during afternoon profit taking. Apple (AAPL 198.78, -3.89, -1.9%) lagged from the start while NVIDIA (NVDA 142.83, -1.12, -0.8%) reversed from early strength.
Quantum computing stocks like Rigetti Computing (RGTI 12.52, +1.28, +11.4%) and Quantum Computing (QUBT 18.97, +3.84, +25.4%) also met some late profit taking, though they held onto the bulk of their big gains that followed comments from NVIDIA CEO Huang, who said that the quantum industry is at an inflection point.
On the upside, the energy sector (+1.5%) continued its strong week (+3.5%), and an equally impressive start to June (+5.8%) amid signs of rising tensions in the Middle East, resulting from an AP report that nonessential personnel at the U.S. Embassy in Baghdad received clearance to leave voluntarily. Crude oil soared $3.25, or 5.0%, to $68.21/bbl on the news, with some assistance from a bullish inventory report.
Treasuries finished the day on their highs with the 10-yr yield falling six basis points to 4.41% thanks to the cool May CPI.
Reviewing today's economic data:
- Total CPI was up 0.1% month-over-month in May (Briefing.com consensus 0.2%) after increasing 0.2% in April. Core CPI, which excludes food and energy, was up 0.1% month-over-month (Briefing.com consensus 0.3%) after increasing 0.2% in April. On a year-over-year basis, total CPI was up 2.4%, versus 2.3% in April. Core CPI was up 2.8% year-over-year, versus 2.8% in April.
- The key takeaway from the report is that both headline and core CPI were lower than expected on a month-over-month basis. While these readings may not give a big boost to near-term rate cut expectations, they should also not cause the market to think that the next cut will be delayed.
- The Treasury Budget for May showed a deficit of $316.0 billion compared to a deficit of $347.1 billion in the same period a year ago. The May deficit resulted from outlays ($687.2 billion) exceeding receipts ($371.2 billion). The Treasury Budget data are not seasonally adjusted so the May deficit cannot be compared to the April surplus of $258.4 billion.
- The key takeaway from the report is that the year-to-date deficit is still up a sizable 13.6% year-over-year, though it is down from 22.0% in April, 23.0% in March, and 38.5% in February.
Tomorrow, the market will receive May PPI (Briefing.com consensus 0.2%; prior -0.5%), Core PPI (Briefing.com consensus 0.3%: prior -0.4%), weekly Initial Claims (Briefing.com consensus 250,000; prior 247,000), and Continuing Claims (prior 1.904 mln) at 8:30 ET.
- S&P 500 +2.4% YTD
- Nasdaq Composite +1.6% YTD
- Dow Jones Industrial Average +0.8% YTD
- S&P Midcap 400 -2.2% YTD
- Russell 2000 -3.7% YTD
Three-day streak in jeopardy
11-Jun-25 15:25 ET
Dow -5.13 at 42861.74, Nasdaq -105.19 at 19609.77, S&P -19.33 at 6019.48
[BRIEFING.COM] The S&P 500 is lower by 0.4% with 30 minutes remaining in today's session.
Barring a late bounce, the S&P 500 will record its first loss over the past four days after touching its best level since late February in morning trade. The consumer discretionary sector (-1.1%) has been at the forefront of this afternoon's profit taking with most of its components now trading in the red. Cruise operators Norwegian Cruise Line (NCLH 19.03, -0.71, -3.6%) and Carnival (CCL 23.87, -0.64, -2.6%) are among the weakest performers while top component Amazon (AMZN 213.19, -4.42, -2.0%) also lags, falling from its best level since late February.
Treasuries finished the day on their highs, sending the 10-yr yield lower by six basis points to 4.41%.
Energy takes lead
11-Jun-25 15:00 ET
Dow -16.11 at 42850.76, Nasdaq -116.13 at 19598.83, S&P -22.14 at 6016.67
[BRIEFING.COM] The S&P 500 (-0.2%) hovers a bit above its low after giving back its modest early gain.
Six sectors now trade lower while four of the five advancers show gains of no more than 0.1%. Meanwhile, the energy sector (+1.3%) is a clear standout to the upside, benefitting from a sharp rally in the price of oil. WTI crude jumped $3.25, or 5.0%, to $68.21/bbl, approaching its 200-day moving average (68.74) after AP reported that the U.S. government will tell all nonessential personnel to evacuate the U.S. Embassy in Baghdad. The market also received a bullish inventory report from the EIA, but the potential for rising tensions in the Middle East has been more impactful.
With today's gain, the energy sector is now up 3.3% for the week and up 5.5% in June.
Stocks slip as May treasury deficit narrows 9% on tariff-driven customs surge
11-Jun-25 14:30 ET
Dow -44.74 at 42822.13, Nasdaq -112.99 at 19601.97, S&P -19.64 at 6019.17
[BRIEFING.COM] Stocks have continued their downward trajectory over the last half hour following the release of the May Treasury Budget which hit at the bottom of the hour. Currently, the S&P 500 (-0.33%) is in second place, shedding about 20 points.
The Treasury Budget for May showed a deficit of $316 billion compared to a deficit of $347.1 billion in the same period a year ago. The May deficit resulted from outlays ($687.2 billion) exceeding receipts ($371.2 billion). The Treasury Budget data are not seasonally adjusted so the May deficit cannot be compared to the April surplus of $258.4 billion.
The key takeaway from the report is that the deficit narrowed in May by 9% compared to last year, driven largely by a surge in customs receipts -- up nearly fourfold to a record $23 billion -- thanks to President Trump's sweeping import tariffs. Adjusted for timing shifts, the deficit fell 17%, while interest payments on public debt also declined, offering rare fiscal relief.
Gold edges higher as U.S./China trade uncertainty and softer dollar support safe-haven demand
11-Jun-25 14:00 ET
Dow +154.55 at 43021.42, Nasdaq -37.71 at 19677.25, S&P -1.20 at 6037.61
[BRIEFING.COM] The Nasdaq Composite (-0.19%) is approaching lows of the session, down now about 38 points.
Gold futures settled $0.30 higher (flat) at $3,343.70/oz, as market participants weighed mixed signals on U.S./China trade progress and braced for key U.S. inflation data. Momentum was underpinned by lingering uncertainty around a tentative U.S./China trade framework -- particularly on rare-earth export concessions -- keeping safe-haven demand intact.
Meanwhile, the U.S. Dollar Index is now down about -0.5% to $98.58.
Dave & Buster's having some fun today as shares soar on improving comp trend (PLAY)
Dave & Buster's (PLAY) 1Q26 earnings report underscores the company's ongoing struggles as it navigates a challenging turnaround under interim CEO Kevin Sheehan, who took the helm from former CEO Chris Morris last December. The entertainment and dining company missed EPS estimates -- a common occurrence over the past few years -- while comparable store sales plunged by 8.3% yr/yr, marking another quarter of contraction. Despite the weak results, the stock is posting big gains, driven by signs of sequential improvement in comp trends and low expectations heading into the report.
The market’s reaction suggests investors were bracing for worse, and the improving monthly comps, coupled with Sheehan’s “back-to-basics” strategy, are fueling optimism for a potential recovery.
- The sequential improvement in comparable store sales is a critical bright spot, though the overall Q1 comp decline of 8.3% was dragged down by a particularly weak February at -11.9%. March and April showed notable recovery, with comps down 8.4% and 4.3%, respectively, and the first five weeks of Q2 further improved to a 2.2% decline, signaling a positive trajectory.
- Key drivers of this improvement include increased traffic, particularly on weekends, and stronger food and beverage (F&B) performance, with the "Eat & Play Combo" promotion achieving double-digit opt-in rates. This initiative, which bundles dining and gaming, has driven higher F&B check growth without relying on price increases. Reduced discounting and a focus on peak-hour operations, including faster service and server-suggested upselling, are also contributing to the uptick.
- Sheehan’s “back-to-basics” strategy aims to reverse operational missteps that “overwhelmed customers and operators.” Key elements include simplifying the menu to streamline operations, reducing promotional complexity, and reintroducing proven offerings like the aforementioned Eat & Play Combo. The strategy also emphasizes smarter marketing, with a shift toward digital and TV ads to boost brand visibility, and new game introductions like the “Human Crane” to enhance the entertainment experience.
- Profitability remains a significant challenge, with Q1 adjusted EPS dropping 32.1% yr/yr to $0.76, reflecting persistent revenue and comp declines. Ongoing macroeconomic headwinds, including reduced spending by price-sensitive low-income consumers, have pressured top-line growth. Additionally, elevated pre-opening expenses tied to new store openings and relocations, coupled with increases in capital expenditures, have weighed on margins.
- Sheehan’s focus on high-return locations for remodeling, targeting mid-to-high single-digit hurdle rates compared to the mid-teens under Morris’s aggressive 44-store remodel program since 2023, aims to alleviate capex pressure. This disciplined approach, alongside cost management and share repurchases ($23.9 mln in Q1), supports cash flow generation ($95.8 mln in Q1), but profitability headwinds persist until comps turn positive and revenue stabilizes.
Despite another challenging quarter, PLAY is rallying, reflecting market optimism driven by improving comp trends since February’s -11.9% low, with Q2’s -2.2% comps suggesting a potential inflection point. However, sustained positive comps over multiple quarters and stronger profitability are needed to confirm the turnaround’s success, making PLAY a speculative investment requiring further evidence of recovery.
GitLab pulls back on smaller-than-usual EPS upside and some customer add metrics (GTLB)
GitLab (GTLB -7%) is under pressure today despite reporting EPS upside with its Q1 (Apr) report last night. This provider of software development tools, also known as DevOps Platforms, also reported healthy revenue growth of +26.8% yr/yr to $214.5 mln, which was above analyst expectations. GitLab also guided Q2 (Jul) EPS and revs in-line. GitLab did raise FY26 EPS guidance and reaffirmed revs.
- A few things stand out to us. This was GitLab's smallest EPS upside since its IPO in October 2021. Also, while it did report upside revenue, the beat was notably smaller than what we have seen in recent quarters. Some analysts did make note of this skinnier-than-normal beat during the Q&A part of the call, which tells us it was an issue for them.
- Drilling down a bit more, customers with more than $5,000 of ARR reached 10,104, an increase of 13% yr/yr. That was a bit of a deceleration from +15% yr/yr in Q4 (Jan). Customers with more than $100,000 of ARR reached 1,288, an increase of 26% yr/yr, which was also down from +29% in Q4. Total RPO grew a healthy 40% yr/yr to $955.1 mln, while cRPO grew 34% to $584.8 mln. These last two metrics were roughly in-line with Q4's +40% and +35%, respectively.
- GitLab was asked about the slight customer growth deceleration. The company said it is seeing some price sensitivity at the low end of the market, mostly SMB, but it's not impacting the financials. That is impacting the new customer add metrics. But GitLab was not concerned.
- GitLab mentioned two issues to explain the customer metrics: 1) there was a mix that favored SaaS. From a revenue recognition perspective, GitLab recognizes more upfront on SaaS. 2) Linearity was a little bit more backend-weighted. From a macro perspective, customers remains cautious. However, people are still buying its offerings. GitLab has not really seen too much difference from a macroeconomic perspective. On a final note, Federal had a great quarter, exceeding internal expectations.
Overall, two things seem to be weighing on shares today: the smaller-than-usual upside and the new customer metrics decelerated a bit from Q4. Whenever a company that has a history of robust beats reports just modest upside, that can be a concern for investors. Perhaps investors need to reset expectations for future quarters. We will watch Q2 results to see if GitLab goes back to its historical beats. The customer metrics are a bit of a concern as well. It's important to keep adding new customers at a good clip to fuel future growth.
SailPoint sails higher after delivering beat-and-raise Q1 report fueled by rising ARR growth (SAIL)
Identity security company and recent IPO SailPoint (SAIL) delivered a strong 1Q26 earnings report -- its second since its February IPO -- sparking a surge in its stock as investors cheer its beat-and-raise performance. The company generated 30% yr/yr Total ARR growth, accelerating from 29% in 4Q25, while raising its FY26 guidance for EPS, revenue, and Total ARR. The upward Total ARR revision, reflecting 25-26% growth, contrasts with the initial FY26 ARR growth guidance of 23-24% provided in 4Q25, which had disappointed some investors due to the growth slowdown from FY25’s 29%.
- Total ARR and SaaS ARR remain critical metrics for SAIL, as they reflect the predictable, recurring revenue streams that underpin its valuation in the subscription-driven cybersecurity market. In addition to the modest upswing in Total ARR growth, SaaS ARR sustained its impressive 39% growth rate, reaching $574 mln. This robust growth is driven by enterprises increasingly prioritizing identity security solutions amid rising cyber threats, with 50-70% of breaches tied to identity-related vulnerabilities.
- Additionally, SAIL's ability to expand its high-value customer base is a key factor, with a 62% yr/yr increase in customers contributing over $1.0 mln in ARR, reflecting strong adoption among Fortune 500 and Forbes Global 2000 companies. The company’s AI-driven platform, which automates access management, continues to resonate with organizations seeking to mitigate risks in complex, cloud-oriented environments.
- Profitability improvements further bolster the bullish case for SAIL with 1Q26 adjusted income from operations increasing 23% yr/yr to $23.6 mln, driven by operational efficiencies and a maturing business model. The transition to a subscription-based model, accelerated under Thoma Bravo’s ownership following the 2022 $6.9 bln take-private transaction, has been pivotal. This shift reduced reliance on perpetual licenses, enhancing revenue predictability and margins.
- Cost discipline, including optimized sales and marketing spend, and the integration of tuck-in acquisitions like Osirium and SecZetta, should continue to contribute to margin and profit expansion. In Q1, adjusted sales and marketing expense increased by about 24%, trailing its Total ARR growth.
SAIL's Q1 results and enhanced guidance highlight its leadership in the fast-growing identity security market, driven by robust ARR growth, expanding high-value customer relationships, and improving profitability.
J.M. Smucker posts Q4 EPS beat, but large impairment charge and weak FY26 guidance sink shares (SJM)
Packaged food company J.M. Smucker (SJM) reported mixed 4Q25 results, delivering upside EPS of $2.31 that demonstrated SJM's disciplined cost management and pricing strength. However, net sales of $2.14 bln fell just short of expectations, reflecting a 3% yr/yr decline, or a 1% drop when excluding the impact of divestitures and FX. Furthermore, a substantial non-cash impairment charge of $1.005 bln, tied to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, severely impacted GAAP profitability. The charge underscores integration challenges following the Hostess Brands acquisition and broader pressures in the sweet snacks category.
- For FY26, SJM issued guidance that disappointed investors, particularly on the earnings front. The company projects adjusted EPS of $8.50–$9.50, well below the consensus estimate, while revenue growth of 2–4% aligns with expectations. The lower EPS guidance is primarily driven by external headwinds, including the impact of tariffs, ongoing input cost inflation (notably in green coffee), and shifts in consumer behavior toward value-driven purchasing amid economic uncertainty. Additionally, SJM lowered its long-term revenue growth target to 3%, signaling a more cautious outlook.
- This guidance is particularly striking given the reemergence of the eat-at-home trend, which has bolstered demand for packaged foods. For instance, Campell Soup (CPB) has emerged as a clear beneficiary of the eat-at-home trend, as illustrated by its strong Q3 results on June 2. The inability of SJM to fully capitalize on this favorable industry dynamic, combined with tariff-related disruptions and persistent inflation, is adding to the disappointment.
- The U.S. Retail Coffee segment emerged as a standout performer, with net sales rising 11% to $738.6 mln, driven primarily by higher net price realization for key brands like Folgers and Café Bustelo. Volume/mix remained neutral, indicating stable demand despite elevated coffee prices, reflecting the segment’s resilience amid inflationary pressures. Similarly, the Uncrustables brand within the U.S. Retail Frozen Handheld and Spreads segment continued to demonstrate strength, contributing a 1 percentage point increase in volume/mix. This growth reflects Uncrustables’ strong consumer appeal and successful marketing and distribution initiatives, positioning it as a key growth driver with projected net sales exceeding $900 mln in FY25.
- In contrast, the U.S. Retail Pet Foods segment experienced significant weakness, with net sales declining 13% to approximately $400 mln. This downturn was primarily driven by an 11 percentage point reduction in volume/mix, reflecting lower demand for dog snacks, notably Milk-Bone, and reduced contract manufacturing sales following the divestiture of certain pet food brands.
- The Sweet Baked Snacks segment faced even steeper challenges, with net sales plummeting 26% to approximately $300 mln, partly due to the divestiture of the Voortman business and certain value brands in the prior year. Excluding these divestitures, net sales still declined by 14%, driven by reduced demand for snack cakes and donuts amid broader pressure on the snack food category. Consumers’ pullback on discretionary spending, coupled with integration challenges from the Hostess Brands acquisition, contributed to a 72% drop in segment profit and triggered the $1.005 bln impairment charge.
SJM's disappointing FY26 guidance, coupled with significant impairment charges and uneven segment performance, has triggered a sharp selloff in the stock. The market’s reaction reflects investor concerns over the company’s ability to navigate tariff-related disruptions, persistent inflation, and weakened performance in key segments like Sweet Baked Snacks and Pet Foods, despite bright spots in Coffee and Uncrustables.
Academy Sports + Outdoors posts another soft quarter, but improving comps spark some optimism (ASO)
Academy Sports + Outdoors (ASO) reported downside 1Q26 results, marking another quarter of underperformance as EPS and revenue misses have become a recurring theme lately. Revenue declined 0.9% yr/yr -- the fifth consecutive quarter of contraction -- driven by weak consumer spending particularly among lower-income customers who form a significant portion of ASO’s value-oriented customer base, and intensifying competitive pressures from Dick’s Sporting Goods (DKS), which has been gaining market share.
Despite the disappointing Q1 results and a downward revision to FY26 guidance, with comparable sales now expected to range from -4% to +1% (previously -2% to +1%) and adjusted EPS guidance lowered to $5.45-$6.25 from $5.75-$6.20, ASO’s stock is trading higher. This counterintuitive rally is likely driven by low expectations heading into the report, which cushioned the impact of the miss, and the company’s commentary on sequential improvement in comparable sales throughout the quarter, culminating in a positive comp in April. The widened comp sales guidance reflects caution due to potential tariff-related disruptions, but the market appears to be focusing on the improving monthly trends and the company’s proactive stance on managing external risks, fueling optimism that the worst may be behind it.
- Comparable sales in Q1 declined by 3.7%, slightly below analysts’ expectations, continuing a trend of negative comps, as macroeconomic headwinds continue to disproportionately impact ASO’s lower- to middle-income customer base. On a positive note, ASO reported strong traffic growth from higher-income consumers, suggesting its value proposition and product assortment continue to resonate with a more resilient demographic.
- Furthermore, by maintaining the high end of its FY26 comp sales guidance at +1%, ASO signaled confidence in its ability to potentially return to positive comps as its growth initiatives, including new store openings and brand expansions, gain traction.
- A significant highlight of the quarter was the launch of the Jordan Brand in 145 stores and online, described as the biggest brand launch in ASO’s history. This move enhances ASO’s appeal in the competitive athletic apparel and footwear market, particularly as DKS strengthens its footwear segment through the proposed acquisition of Foot Locker (FL), expected to close in 2H25.
- The Jordan Brand, with its strong cultural cachet and broad appeal across men’s, women’s, and kids’ categories, positions ASO to capture incremental market share and drive traffic, especially among younger and trend-conscious consumers. This launch could help ASO differentiate itself in a crowded market and counter competitive pressures from DKS’s, which is leveraging its scale and enhanced Nike (NKE) partnership post-acquisition to bolster its footwear dominance.
- Gross margin improved by 60 bps yr/yr to 34.0%, reflecting effective cost management and proactive tariff mitigation strategies. The company has reduced its direct import exposure to China to approximately 9% of its private label cost of goods sold, with plans to further decrease this to 6% by the end of FY26. Actions such as diversifying its supply chain to include trusted suppliers in other countries and pulling forward domestic inventory receipts of evergreen products at pre-tariff prices have helped mitigate the impact of tariffs.
ASO faced another challenging quarter marked by an EPS miss and continued revenue declines, driven by weak consumer spending and competitive pressures. However, the sequential improvement in comparable sales, culminating in a positive comp in April, and the strategic launch of the Jordan Brand signal potential for a turnaround, suggesting stronger results may be on the horizon.
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