Stocks Pressured as Bond Yields Climb

Market Overview - The S&P 500 Index is down -0.25%, the Dow Jones Industrials Index is down -0.26%, and the Nasdaq 100 Index is down -0.13% [1] - Stock indexes turned lower due to an increase in bond yields, with the 10-year T-note yield rising +5 basis points to 4.49% [2] - Initial gains in stocks were seen, with the S&P 500 and Dow Jones reaching one-week highs, and the Nasdaq 100 hitting a three-month high [2] Economic Indicators - US MBA mortgage applications fell -1.2% for the week ending May 23, with the purchase mortgage sub-index up +2.7% and the refinancing sub-index down -7.1% [4] - The average 30-year fixed mortgage rate increased by +6 basis points to 6.98% [4] - The May Richmond Fed manufacturing survey rose by +4 to -9, aligning with expectations [4] - The market is currently discounting a 2% chance of a -25 basis point rate cut at the next FOMC meeting on June 17-18 [4] Earnings and Corporate Performance - Over 90% of S&P 500 companies have reported Q1 earnings, with 77% beating estimates, marking the highest percentage since Q2 2024 [6] - Q1 earnings growth is at +13.1%, surpassing the expected +6.6% [6] - Full-year 2025 corporate profits for the S&P 500 are projected to rise +9.4%, down from an earlier forecast of +12.5% [6] Company-Specific Movements - Okta is down more than -12% after forecasting Q2 performance obligations below consensus [12] - Galaxy Digital is down more than -12% following an underwritten offering announcement [12] - PDD Holdings is down more than -3% after a double downgrade by UOB [12] - Elevance Health is up more than +1% after reaffirming its full-year profit forecast [14] - Fair Isaac is up more than +7% after an upgrade by Baird [14] - Abercrombie & Fitch is up more than +25% after reporting Q1 net sales above consensus and raising its full-year sales forecast [15] - Box Inc is up more than +17% after increasing its full-year revenue forecast [15] - Vail Resorts is up more than +12% after reaffirming fiscal guidance and CEO reappointment [16]