Market Snapshot
| Dow | 42866.87 | +105.11 | (0.25%) | | Nasdaq | 19714.96 | +123.75 | (0.63%) | | SP 500 | 6038.81 | +32.93 | (0.55%) | | 10-yr Note | +3/32 | 4.474 |
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| | NYSE | Adv 1738 | Dec 960 | Vol 1.02 bln | | Nasdaq | Adv 2638 | Dec 1723 | Vol 11.2 bln |
Industry Watch
| Strong: Energy, Communication Services, Real Estate, Health Care, Consumer Discretionary |
| | Weak: Industrials |
Moving the Market
-- Waiting on details from U.S.-China trade talks
-- NFIB Small Business Optimism increases to 98.8 in May from 95.8 in April
-- Treasury yields moving lower
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Waiting game continues
10-Jun-25 16:10 ET
Dow +105.11 at 42866.87, Nasdaq +123.75 at 19714.96, S&P +32.93 at 6038.81
[BRIEFING.COM] The stock market climbed on Tuesday, buoyed by ongoing hope for a positive outcome of trade talks between officials from the U.S. and China. The S&P 500 (+0.6%) finished just behind the Nasdaq (+0.6%) while the Dow (+0.3%) continued this month's underperformance.
The trading day was largely uneventful, though it is worth noting that the market resisted selling efforts that knocked the major averages from highs on two occasions, only to be followed by a push to fresh highs for the day. President Trump's acknowledgement that Iran is becoming "much more aggressive" in nuclear talks with the U.S. was met with a brief mid-morning dip that was reversed quickly. Later in the day, Commerce Secretary Lutnick said that talks with China are going very well and could continue into tomorrow.
Ten sectors finished the day with gains, led by energy (+1.8%) even though crude oil could not sustain its morning gain, ending the pit session lower by 0.5% at $64.96/bbl. Energy was followed by the consumer discretionary sector (+1.2%), which received strong support from an extension of yesterday's bounce in Tesla (TSLA 326.09, +17.51, +5.7%).
Top-weighted technology (+0.5%) kept pace with the broader market, masking strength among chipmakers that helped the PHLX Semiconductor Index (+2.1%) extend this month's gain to 10.2% with Intel (INTC 22.11, +1.63, +8.0%) showing relative strength amid growing optimism surrounding its new fabrication technology.
The industrials sector (-0.4%) was the weakest performer throughout the day due to profit taking among defense stocks after their recent strength. Transport stocks, however, had a strong showing, sending the Dow Jones Transportation Average (+1.3%) back to its May high after Norfolk Southern (NSC 252.92, +2.35, +0.9%) said that its carload growth is up 5% quarter-to-date.
Treasuries finished the day with slim gains in longer tenors and modest losses up front ahead of tomorrow's release of May CPI (Briefing.com consensus 0.2%). The U.S. Treasury sold $58 bln in 3-yr notes to soft demand while tomorrow's session will feature a $39 bln 10-yr note reopening.
Today's economic data was limited to the NFIB Small Business Optimism Index for May, which rose to 98.8 from 95.8 in April.
Tomorrow, the market will receive the weekly MBA Mortgage Index (prior -3.9%) at 7:00 ET, followed by May CPI (Briefing.com consensus 0.2%; prior 0.2%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) at 8:30 ET, and May Treasury Budget (prior $258.4 bln) at 14:00 ET.
- S&P 500 +2.7% YTD
- Nasdaq Composite +2.1% YTD
- Dow Jones Industrial Average +0.8% YTD
- S&P Midcap 400 -1.8% YTD
- Russell 2000 -3.4% YTD
Fresh high set
10-Jun-25 15:25 ET
Dow +100.75 at 42862.51, Nasdaq +120.71 at 19711.92, S&P +31.22 at 6037.10
[BRIEFING.COM] The S&P 500 (+0.5%) has rallied to a fresh high with 30 minutes remaining in today's session.
The top-weighted technology sector (+0.5%) is keeping pace with the broader market, but that is masking relative strength among chipmakers. The PHLX Semiconductor Index (+2.2%) trades well ahead of the tech sector and the broader market with all but two of its components holding gains. Intel (INTC 22.24, +1.76, +8.6%) is the best performer of the bunch, rallying past its 50-day (20.57) and 200-day (21.62) moving averages, amid growing optimism surrounding the company's new fabrication technology.
Software stocks are offsetting the strength among chipmakers with Microsoft (MSFT 470.29, -2.46, -0.5%) giving back yesterday's gain while the iShares Expanded Tech-Software Sector ETF (IGV 105.91, -0.22, -0.2%) holds a modest loss.
Energy ahead
10-Jun-25 14:55 ET
Dow +46.55 at 42808.31, Nasdaq +76.35 at 19667.56, S&P +21.07 at 6026.95
[BRIEFING.COM] The S&P 500 (+0.4%) hovers just below its best level of the session with seven sectors trading higher.
The energy sector (+1.6%) has maintained its lead even though crude oil failed to hold onto its gain, ending the pit session lower by $0.33, or 0.5%, at $64.96/bbl. Oil marked a session high just north of $66.00/bbl, touching its best level since early April, before reversing in mid-morning trade. Energy, meanwhile, is hanging onto the bulk of today's gain, making for a continuation of a strong start to the month. The sector is already up 4.0% in June, but it is still the worst performer of Q2, having given up 10.0% since the end of March.
Treasuries are on course to finish the day with slim gains in longer tenors, sending the 10-yr yield lower by a basis point to 4.47% while the 2-yr yield is up one basis point at 4.01% after today's soft 3-yr note sale.
S&P 500 edges higher led by Intel and Warner Bros.; Amentum slips on BofA coverage
10-Jun-25 14:25 ET
Dow -0.31 at 42761.45, Nasdaq +36.10 at 19627.31, S&P +12.80 at 6018.68
[BRIEFING.COM] The S&P 500 (+0.21%) is in first place on Tuesday afternoon, up about 12 points.
Briefly, S&P 500 constituents Intel (INTC 22.04, +1.56, +7.62%), Warner Bros. Discovery (WBD 10.01, +0.48, +5.04%), and Aptiv (APTV 70.18, +2.99, +4.45%) pepper the top of the standings. APTV is higher today amid favorable sell side commentary from JPMorgan.
Meanwhile, Amentum Holdings (AMTM 22.08, -1.05, -4.54%) is one of today's worst-performing constituents, slipping after BofA Securities started coverage on the stock with a Neutral, tgt $24.
Gold slips as traders eye inflation data, U.S./China talks
10-Jun-25 14:00 ET
Dow +53.64 at 42815.40, Nasdaq +38.29 at 19629.50, S&P +16.82 at 6022.70
[BRIEFING.COM] With about two hours to go on Tuesday afternoon, the tech-heavy Nasdaq Composite (+0.20%) sits in second place.
Gold futures settled $11.50 lower (-0.3%) at $3,343.40/oz, as a stronger U.S. dollar and cautious sentiment with an eye on U.S./China trade talks in London. Traders also stayed on the sidelines ahead of this week's U.S. inflation data, which could influence the Fed's next policy steps.
Meanwhile, the U.S. Dollar Index is little changed at $99.04.
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.
Casey's General makes a big move after closing out FY25 on a high note (CASY)
Casey's General (CASY +14%) is making a huge move after the gas station/convenience store company closed out FY25 on a robust note. It reported its largest EPS upside in seven quarters with its Q4 (Apr) report last night. Revenue rose a healthy 10.9% yr/yr to $3.99 bln, a bit better than expected. CASY posted back-to-back double-digit revenue increases in Q3-Q4 for the first time in many quarters.
- CASY also raised its quarterly dividend by 14% to $0.57 per share and it provided healthy FY26 guidance, including a 10-12% increase in EBITDA and good comp guidance. Specifically, CASY expects FY26 inside same-store sales to increase +2-5% with inside margin of approximately 41%. CASY also expects same-store fuel gallons sold to be -1% to +1%. It also expects to open at least 80 stores in FY26, through a mix of M&A and new store construction.
- CASY describes its Q4 results as "outstanding" as total inside sales rose 12.4% yr/yr to over $1.4 bln, with an average margin of 41.2%. Inside same-store sales were up +1.7%. CASY said traffic in the quarter was a touch negative, but that's all because of weather in February, but then it got progressively better in both the March and April.
- A key metric is same store prepared food and dispensed beverage sales, they were up +1.5%. Hot sandwiches and bakery performed well in the quarter. Same store grocery and general merchandise sales were up +1.8%. Sales were particularly strong in non-alcoholic beverages, specifically energy drinks. Retail fuel sales benefitted from a 17.8% increase in the total gallons sold to $819 mln, which was partially offset by a 9% decline in average retail price to $2.98 per gallon this year.
- In terms of the macro, CASY says the consumer is really hanging in there and continues to visit its stores as frequently as they have historically. CASY is seeing good strength from higher income consumers. Even on the low end, CASY is seeing traffic hang in there but they are modifying some some purchasing behavior.
Investors are clearly impressed with how CASY closed out FY25 with the huge EPS beat and solid inside comps. What is interesting about CASY is that it makes most of its margin with inside sales. Gasoline drives traffic, but those are low margin sales. The key is to get customers who buy gas to come inside and spend. Casey's has done a good job with that. Its pizza is very popular with consumers, but it also offers a broad menu of hot and prepared foods. It also helps tht CASY has low exposure to tariffs with less than 5% of inside sales being imported.
Qualcomm bolsters data center ambitions with $2.4 bln acquisition of Alphawave (QCOM)
Before the open, Qualcomm (QCOM) announced a $2.4 bln acquisition of Alphawave IP Group, a UK-based semiconductor company, with the transaction expected to close in 1Q26. Alphawave specializes in high-speed wired connectivity and compute technologies, delivering intellectual property, custom silicon, connectivity products, and chiplets that enable faster, more reliable data transfer with high performance and low power consumption. Its serializer/deserializer technology, critical for AI-driven data processing, supports high-speed data movement in data centers, networking, and storage applications, underpinning the custom chip businesses of companies like Broadcom (AVGO) and Marvell Technology (MRVL).
- Alphawave's capabilities complement QCOM’s portfolio, particularly its Oryon CPU and Hexagon NPU processors, enhancing its ability to deliver power-efficient, high-performance computing solutions for AI and data center workloads.
- QCOM's pivot to diversify revenue streams beyond the seasonal and volatile handset market has been a cornerstone of its recent growth, as evidenced by its strong 2Q25 results announced on April 30, where Automotive revenue surged 59% yr/yr and IoT revenue grew 27% yr/yr. The acquisition of Alphawave represents a continuation of this strategy, following moves like the 2021 acquisition of Nuvia to bolster custom ARM-based CPU designs.
- By integrating Alphawave’s connectivity IP, QCOM strengthens its technological foundation in high-growth sectors like data centers and AI, reducing reliance on smartphone chips - a market facing low single-digit growth projections through 2029 - and challenges like Apple’s (AAPL) shift to in-house modems. This diversification aligns with QCOM’s broader push into automotive, IoT, and AI-enabled PCs.
- The acquisition significantly expands QCOM’s footprint in the data center market, an area where it previously had limited exposure after exiting in 2018 due to challenges competing with Intel (INTC). The explosive growth in AI-driven workloads has fueled robust demand for data center processors, as demonstrated by NVDA’s dominance in AI GPUs and AMD’s strong growth in EPYC server CPUs, with both companies capitalizing on a data center CPU total addressable market projected to grow at a 10% CAGR and an AI inference market expanding at over 20% CAGR through 2027.
- Alphawave’s high-speed connectivity IP enhances QCOM’s ability to deliver integrated solutions for AI infrastructure, complementing its Nuvia-derived CPU capabilities. While this positions QCOM to compete in the data center space, it poses limited immediate competitive risk to NVDA, AMD, or INTC. NVDA's strength lies in its GPU-centric AI ecosystem, while AMD and INTC dominate server CPUs. QCOM’s focus on connectivity and custom silicon targets a complementary niche, potentially enabling partnerships rather than direct competition.
- Financially, the acquisition is unlikely to provide a material near-term boost to QCOM’s performance, given Alphawave’s ~$300 mln in 2024 revenue compared to QCOM’s $24 bln from mobile chips alone in FY24. However, long-term benefits are more significant. Alphawave’s IP and custom silicon capabilities enhance QCOM’s ability to capture a share of the $39 bln data center TAM by 2027, while synergies from combining Alphawave’s connectivity with QCOM’s processors could improve margins and accelerate growth in AI and data center markets.
QCOM’s $2.4 bln acquisition of Alphawave is a strategic move to bolster its data center and AI capabilities, aligning with its diversification strategy to reduce handset market dependence. While near-term financial impacts are modest, the long-term potential to capture high-growth data center markets and enhance technological competitiveness justifies the investment, positioning QCOM as a stronger player in AI infrastructure.
Warner Bros. Discovery higher on separation news as WBD navigates a changing media landscape (WBD)
Warner Bros. Discovery (WBD +8%) is trading nicely higher today as investors cheer the struggling media company's decision to separate the company into two publicly traded companies.
- On the one hand will be its Streaming & Studios company, which will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their film and television libraries. David Zaslav, currently CEO of Warner Bros. Discovery, will serve as CEO of Streaming & Studios.
- On the other hand will be Global Networks, which will include CNN, TNT Sports in the US, and Discovery, top free-to-air channels across Europe, and digital products such as the Discovery+ streaming service and Bleacher Report (B/R). Gunnar Wiedenfels, CFO of Warner Bros. Discovery, will serve as CEO of Global Networks.
- WBD believes that, by operating as two distinct companies, each will be able to focus on their individual goals and strategies. This will also allow each company to pursue important investment opportunities. WBD feels a separation will allow each company to act faster and be more aggressive in terms of pursuing opportunities. Also, the separation will allow investors to assign different multiples to each company.
This a trend we are seeing in legacy media as it deals with increasing competition from streaming and as consumers move away from traditional cable/linear tv. This WBD separation is very similar to what Comcast (CMCSA) is doing in terms of spinning out its cable networks, to be called Versant, from NBCUniversal by year end. Also, Lions Gate Entertainment (LGF.A) recently completed the separation of its Studio and STARZ businesses into two publicly-traded companies.
Investors are clearly pleased to see this separation even though it was pretty much expected. One of the benefits of the separation would be to allow its streaming operations to boost content while not being weighed down by the slower-growth legacy cable business, which is seeing a decline in viewers. The cable channels still throw off decent good cash flow, but are struggling with high debt and declining subscribers as more consumers cut the cord.
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