Market Snapshot
| Dow | 42967.62 | +101.85 | (0.24%) | | Nasdaq | 19662.48 | +46.61 | (0.24%) | | SP 500 | 6045.26 | +23.02 | (0.38%) | | 10-yr Note | +12/32 | 4.357 |
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| | NYSE | Adv 1528 | Dec 1180 | Vol 1.00 bln | | Nasdaq | Adv 2037 | Dec 2330 | Vol 1.63 bln |
Industry Watch
| Strong: Utilities, Information Technology, Health Care, Materials |
| | Weak: Industrials, Communication Services, Financials, Consumer Discretionary, Consumer Staples |
Moving the Market
-- Lingering uncertainty about path of trade relationships/tariff increases, as President Trump reignites possibility of imposing unilateral tariffs
-- Oracle (ORCL) impresses with earnings report and outlook
-- Boeing (BA) sinks following Air India crash
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Trade uncertainty offset by rate-cut friendly data
12-Jun-25 16:10 ET
Dow +101.85 at 42967.62, Nasdaq +46.61 at 19662.48, S&P +23.02 at 6045.26
[BRIEFING.COM] The S&P 500 (+0.4%) finished Thursday with a modest gain, slightly outpacing the Nasdaq (+0.2%) and the Dow (+0.2%) while small caps lagged, sending the Russell 2000 lower by 0.4%.
The modestly higher finish in the large cap indices was a reflection of continued resilience to selling efforts, as participants remained fearful of missing out on further gains after a big rally off the April low.
Equities saw some early pressure stemming from President Trump's toughening stance on trade and some renewed geopolitical concerns surrounding the Middle East, but that was offset by rate-cut friendly economic data.
President Trump said that letters with trade term offers will be sent to different countries. These offers will not leave much room for negotiation since he added that they will come with a "take it or leave it" caveat.
There was also some focus on the growing tensions in the Middle East after yesterday's report that U.S. Embassy staff in Baghdad received authorization to leave their post. President Trump confirmed the report last evening, and today, ABC News reported that Israel is considering military action against Iran with logistical support from the U.S.
Economic data released today included a cooler-than-expected PPI report for May (0.1%; Briefing.com consensus 0.2%) and a jobless claims report, which showed a big jump in Continuing Claims (+54,000 to 1.956 million) to levels not seen since late 2021.
Today's data strengthened the market's rate cut expectations for September, and it played a part in the market's opening rise off lows. Eight sectors finished the day in positive territory with top-weighted technology (+1.0%) finishing only behind the lightly-weighted utilities sector (+1.3%).
The technology sector received daylong support from fifth-largest component Oracle (ORCL 199.85, +23.47, +13.3%), which soared to a fresh record after the company beat Q3 expectations and issued in-line guidance for Q4. Chipmakers were among the outperformers in early trade, but the PHLX Semiconductor Index (+0.3%) gave back the bulk of its early gain, finishing behind the broader market.
On the downside, the communication services sector (-0.6%) was the worst performer, though it is still one this month's leaders, having climbed 3.2% since the end of May versus a 2.3% month-to-date gain in the S&P 500. Industrials (-0.2%) also lagged with Boeing (BA 203.75, -10.25, -4.8%) weighing the group down after an Air India 787 crashed shortly after take-off in Ahmedabad.
Treasuries ended with solid gains, as the 10-yr note and shorter tenors essentially finished where they started while the long bond outperformed with help from today's strong $22 bln 30-yr bond sale. The 10-yr yield fell six basis points to 4.36%, ending just below its 50-day moving average (4.369%).
Reviewing today's economic data:
- The Producer Price Index for final demand increased 0.1% month-over-month in May (Briefing.com consensus 0.2%) after decreasing a revised 0.2% (from -0.5%) in April. The Producer Price Index for final demand, less foods and energy, also increased 0.1% month-over-month (Briefing.com consensus 0.3%), while the April reading was revised up to -0.2% from -0.4%. On a year-over-year basis, the index for final demand was up 2.6%, versus an upwardly revised 2.5% in April (from 2.4%), while the index for final demand, less foods and energy, was up 3.0%, versus an upwardly revised 3.2% (from 3.1%) in April.
- The key takeaway from the report is that the positive impact of a cooler-than-expected reading is largely being offset by upward revisions to readings from April. That said, the year-over-year Core PPI rate decelerated to 3.0% from 3.2%, which is a positive development.
- Initial jobless claims for the week ending June 7 hit 248,000 (Briefing.com consensus 250,000), unchanged from the prior week's upwardly revised level (from 247,000). Continuing jobless claims for the week ending May 31 increased by 54,000 to 1.956 million from last week's downwardly revised 1.902 million (from 1.904 million).
- The key takeaway from the report is that continuing claims reached a level not seen since late 2021, which will invite some questions about the strength of the labor market since laid-off workers are having an increasingly difficult time finding new jobs quickly.
Tomorrow's data will be limited to the 10:00 ET release of the preliminary reading of the University of Michigan's Consumer Sentiment Index for June (Briefing.com consensus 53.0; prior 52.2).
- S&P 500 +2.8% YTD
- Nasdaq Composite +1.8% YTD
- Dow Jones Industrial Average +1.0% YTD
- S&P Midcap 400 -2.2% YTD
- Russell 2000 -4.1% YTD
More data ahead next week
12-Jun-25 15:25 ET
Dow +75.74 at 42941.51, Nasdaq +49.43 at 19665.28, S&P +20.22 at 6042.46
[BRIEFING.COM] The S&P 500 (+0.3%) holds a modest gain going into the final 30 minutes of today's session.
The market received some noteworthy economic data this week, headlined by May CPI (0.1%; Briefing.com consensus 0.2%) and May PPI (0.1%; Briefing.com consensus 0.2%). Next week will also bring a sizable data slate with May Retail Sales (prior 0.1%) and May Industrial Production (prior 0.0%) scheduled for a Tuesday release, followed by May Housing Starts (prior 1.361 million) on Wednesday. The FOMC will release its latest policy statement on Wednesday, though the market has no expectations for a rate cut to be announced at this time.
Modest gain maintained
12-Jun-25 14:55 ET
Dow +79.24 at 42945.01, Nasdaq +36.46 at 19652.31, S&P +17.46 at 6039.70
[BRIEFING.COM] The stock market continues hanging onto a modest gain with the S&P 500 (+0.3%) currently up 0.7% for the week.
Seven sectors display gains at this juncture with technology (+0.9%) maintaining its strength, though it now trades behind the lightly-weighted utilities sector (+1.2%). Health care (+0.7%) is also among today's outperformers while the downside has been limited. The communication services sector (-0.5%) is the worst performer, trading behind the consumer discretionary sector (-0.4%), and industrials (-0.3%).
Treasuries are on course to finish the day in the green with the 10-yr yield down five basis points at 4.36%.
S&P 500 leads majors as gold, defense stocks shine; COIN slides on crypto weakness
12-Jun-25 14:30 ET
Dow +64.10 at 42929.87, Nasdaq +37.23 at 19653.08, S&P +16.16 at 6038.40
[BRIEFING.COM] The S&P 500 (+0.27%) is atop the major averages, just a hair off HoDs.
Briefly, S&P 500 constituents Newmont Corporation (NEM 55.43, +2.12, +3.98%), Cencora (COR 294.07, +7.43, +2.59%), and Lockheed Martin (LMT 466.97, +10.37, +2.27%) dot the top of the standings. NEM is higher amid rising gold futures, while LMT rallies despite F-35 cut headlines, as investors view the risk as low given strong congressional support, broad economic impact, and early-stage budget uncertainty.
Meanwhile, Coinbase Global (COIN 240.97, -9.71, -3.87%) is one of today's worst-performing constituents, slipping amid falling crypto prices.
Gold soars $59 to $3,402 on dovish Fed bets, weak dollar, and geopolitical jitters
12-Jun-25 14:00 ET
Dow +77.66 at 42943.43, Nasdaq +50.53 at 19666.38, S&P +18.78 at 6041.02
[BRIEFING.COM] With about two hours to go on Thursday the tech-heavy Nasdaq Composite (+0.26%) sits in second place, up about 50 points.
Gold futures settled $58.70 higher (+1.8%) at $3,402.40/oz, as traders scrambled into the yellow metal amidst a convergence of risk factors and dovish macro signals. A softer-than-expected U.S. inflation print rekindled expectations of Federal Reserve rate cuts, while the U.S. dollar slid to multi-week lows, amplifying gold's appeal. Rising geopolitical uncertainty -- from Middle East tensions to ongoing U.S./China trade negotiations -- further fueled safe-haven demand. Technical momentum also added fuel, with bulls eyeing a potential breakout beyond the April all-time high near $3,425.
Meanwhile, the U.S. Dollar Index slips about -0.7% to $97.94.
Lovesac shares reclining sharply lower as reaffirmed FY26 outlook disappoints (LOVE)
Despite delivering upside 1Q26 EPS of $(0.73), Lovesac (LOVE) is plunging lower reflecting investor disappointment with the company’s reaffirmed FY26 guidance rather than an upward revision. The reaffirmed outlook -- EPS of $0.80-$1.36 and net sales of $700-$750 mln -- was still in-line with the FactSet consensus estimates, but investors were anticipating a more optimistic revision, particularly given the EPS beat, signaling caution amid persistent category headwinds in the home furnishings sector that remains highly promotional.
- LOVE's s Q1 EPS outperformance was driven by disciplined cost management and operational leverage, as the company began to realize returns on prior investments in its omni-channel “infinity flywheel” and product innovation capabilities. Operating expenses were effectively leveraged, with SG&A as a percentage of net sales declining to 48.5% from 51.6% a year earlier due to efficiencies in infrastructure, rent, and marketing spend.
- However, gross margin contracted by 60 bps to 53.7%, primarily due to a 230 bps decline in product margin driven by increased promotional discounting to counter category softness. This was partially offset by cost savings, including a 130 bps reduction in inbound transportation costs and a 40 bps decrease in outbound transportation and warehousing expenses, reflecting supply chain optimizations.
- A bright spot was LOVE's omni-channel comparable net sales growth of 2.8%, a key metric signaling market share gains against a furniture category that declined by high single digits. Product innovation, particularly the launch of the EverCouch platform and strong reception of the Sactionals Reclining Seat, drove customer engagement, with quotes for large setups rising significantly, though conversion rates were tempered by cautious consumer spending. The company’s focus on its Designed for Life philosophy and enhanced CRM tools further supported omni-channel performance.
- The company's Q2 revenue guidance of $157-$167 mln aligns closely with analyst expectations, while its reaffirmed FY26 guidance indicates a cautious outlook amid mixed tailwinds and headwinds. Tailwinds include continued showroom expansion, product innovation ( EverCouch and recliner launches), and supply chain diversification, with only about 10% of sourcing from China, mitigating tariff exposure. However, headwinds such as sluggish consumer spending, exacerbated by high interest rates and inflation, and potential tariff pressures on imports from Malaysia and Vietnam, where LOVE sources heavily, pose risks.
LOVE’s steep sell-off reflects investor frustration with its conservative Q2 EPS guidance and reaffirmed FY26 outlook. However, the company’s 2.8% omni-channel comparable net sales growth underscores its ability to capture market share through showroom expansion and product innovation.
Boeing shares sink as Air India 787 crash reignites safety concerns (BA)
Air India Flight AI-171, a Boeing (BA) 787-8 Dreamliner en route from Ahmedabad, India, to London Gatwick, crashed shortly after takeoff, killing all 242 passengers and crew and causing additional casualties on the ground in the Meghani Nagar residential area. This tragic event, the first fatal crash involving a Boeing 787 since its commercial debut in 2011, has triggered significant market repercussions, with BA’s shares plunging and GE Aerospace (GE), the manufacturer of the aircraft’s GEnx engines, seeing a drop as well.
While the cause of the crash remains under investigation by India’s Directorate General of Civil Aviation (DGCA) and the U.S. Federal Aviation Administration (FAA), with flight data recorders recovered and expert speculation pointing to a potential loss of thrust or lift, definitive answers are likely weeks away, leaving investors grappling with uncertainty as BA faces renewed scrutiny.
- BA's history of safety and quality control challenges has been thrust back into the spotlight with this disaster. The company has been haunted by the 2018 Lion Air Flight 610 and 2019 Ethiopian Airlines Flight 302 crashes, both involving the 737-MAX, which killed 346 people and led to a global grounding of the model for nearly two years. Additional incidents, such as the January 2024 Alaska Airlines 737-MAX 9 door plug blowout and the December 2024 Jeju Air 737-800 crash in South Korea, further eroded confidence.
- However, BA appeared to be regaining its footing under new CEO Kelly Ortberg, with key developments including a settlement with the U.S. Department of Justice on June 4 to avoid criminal prosecution over the 737-MAX crashes (which is facing pushback from crash victims who are looking for more accountability), an FAA-approved action plan to address quality control lapses, and enhanced production discipline that bolstered investor sentiment.4
- Prior to the crash, BA’s stock was trading near 52-week highs, buoyed by a robust 1Q25 earnings report on April 23, 2025, which showcased a 75% revenue surge in the Commercial Airplanes segment, reflecting strong demand and operational recovery. Production of both the 737 and 787 programs has returned to healthier levels with BA delivering approximately 350 commercial aircraft in 2024, and the company has secured significant orders, such as Qatar Airways’ commitment for up to 210 jets, including 130 787 Dreamliners. Additionally, China’s recent decision to lift its ban on Boeing aircraft, with deliveries set to resume in July 2025, provided a critical catalyst, opening access to a key growth market.
- The Air India crash, however, threatens to derail this progress, particularly as it marks the first fatal incident involving the 787 Dreamliner, a cornerstone of BA’s widebody portfolio. This year, BA on pace to deliver about 60-70 Dreamliners per year at an average list price of $250-$300 mln per aircraft (though discounts are common).
- The 787 program, with approximately 1,190 aircraft in service globally, is critical to BA’s financial health, serving long-haul routes for major carriers like Air India, which operates nearly three dozen 787s. A temporary suspension of the 787 program, should regulators deem it necessary, could disrupt deliveries, delay billions in near-term revenue, and exacerbate BA’s $36+ bln in cumulative losses since 2019. Moreover, persistent quality concerns, including prior whistleblower allegations of improper fuselage fastening and uncompleted inspections, could intensify regulatory and public scrutiny, potentially impacting order flow and customer confidence.
Accurately assessing the full financial and reputational impact of the Air India disaster on BA is challenging, as the investigation will likely take weeks or months to pinpoint the cause, whether mechanical, human error, or external factors like a bird strike. Nevertheless, this tragedy represents another significant blow to BA’s reputation as it competes fiercely with Airbus (EADSY), which has outsold BA in aircraft orders for the past five years and could further erode investor and customer trust in the company’s ability to deliver safe, reliable aircraft.
Oracle surging following robust close to FY25; points to strong growth in coming years (ORCL)
Oracle (ORCL +13%) is trading sharply higher after wrapping up FY25 on a bullish note with its Q4 (May) earnings report last night. After missing on EPS in three of the prior four quarters, Oracle reported its largest EPS beat in two years. Revenue rose 11.3% yr/yr to $15.90 bln, which was its first double-digit growth quarter in two years. Oracle also provided in-line guidance for Q1 (Aug).
- The company noted on the call that, a few years ago, it said it would reach a tipping point in its cloud transition and expected revenue growth to accelerate. That time has come. Oracle noted it hit double-digit revenue growth in Q4 and made a strong statement: that it's only going up from here, even as the company gets bigger.
- RPO is a key metric, it grew 41% yr/yr to $138 bln, not quite the +62% growth we saw in Q3 (Feb), but Q3 was Oracle's strongest booking quarter ever by a huge margin. This RPO number was still very good and it grew 6% sequentially. And Oracle said the best is still yet to come.
- Oracle said it's still in a position where its supply is not meeting demand. Oracle is actually still waiving off customers or scheduling them out into the future until it has enough supply to meet demand. Oracle said this is a situation that it has never seen in its history.
- A key potential growth catalyst for Oracle is being a partner in the Stargate Project, a massive AI infrastructure initiative that also includes OpenAI, SoftBank, and MGX. The goal is to deploy a number of large data centers across the US to develop and deploy AI technology on a large scale. Oracle noted that, if Stargate turns out to be everything as advertised, then Oracle has understated its RPO growth.
Our takeaway from this Q4 report is that investors are pleased to see the large upside after some recent iffy quarters relative to consensus. Also, management stated that it now expects it will exceed the revenue growth target previously provided for FY27. And beyond FY27, it's even more confident in its ability to meet and likely exceed prior targets for FY29. Oracle is a large company and companies this size rarely talk about revenue growth accelerating two years out. This result bodes well for other tech names set to start reporting next month.
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.
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