Stock market today: Dow, S&P 500, Nasdaq advance despite US-Iran uncertainty as strong earnings season wraps

Consumers’ pessimism about the US economy deepened in May as high gas prices, which are rapidly approaching $5 per gallon on average, weighed on Americans’ finances.

The University of Michigan’s Index of Consumer Sentiment fell to 44.8, a record low just below the 2022 trough.

“The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month,” the survey’s director Joanne Hsu said. “Lower-income consumers and those without college degrees posted particularly strong sentiment declines; these groups are more sensitive to increases in the cost of gas and other essentials.

Year-ahead inflation expectations inched up to 4.8% from 4.7% last month. They are well above the 3.4% reading seen in February 2026, prior to the start of the Iran conflict.

Long-run inflation expectations climbed to 3.9% in May from 3.5% in April.

Stocks climbed to start the trading session as investors cautiously awaited news on a breakthrough in the US-Iran conflict and Treasury yields eased.

The Dow Jones Industrial Average (^DJI) rose 0.5% to add to its record-high close on Thursday. The blue-chip index crossed 50,500 on Friday morning.

The S&P 500 (^GSPC) added 0.63% and was on track for its longest weekly winning streak in three years. The tech-heavy Nasdaq Composite (^IXIC) rose 0.7%.

Helping to lift stocks was an easing in oil prices and bond yields. Brent (BZ=F) crude futures, the international benchmark, hovered around $102 per barrel, while West Texas Intermediate (CL=F) crude prices, the US benchmark, traded at $95 per barrel.

The 10-year yield (^TNX) eased back to 4.5%, and the 30-year yield (^TYX) retreated to just above 5%.

Yahoo Finance’s Brian Sozzi reports:

Shares of the maker of Rao’s pasta sauce, Snyder’s pretzels, Goldfish crackers, and Campbell’s chicken noodle soup are now hovering at 30-year lows. The stock is down about 19% since the company reported earnings in March.

Only General Mills (GIS), Conagra (CAG), and McCormick (MKC) have performed worse since The Campbell Company’s last earnings report: They have declined 21%, 24%, and 26%, respectively.

Campbell’s had a dreadful quarter. Net sales dropped 5% year over year to $2.56 billion, under estimates of $2.64 billion. Consumers pulled back on discretionary snack purchases. The core Meals & Beverages segment grappled with lower demand for traditional condensed soups.

Read more here.

Booz Allen Hamilton (BAH) stock jumped 5% after adjusted earnings of $1.78 per share exceeded Wall Street’s expectations for earnings of $1.32 per share.

However, the contractor’s revenue of $2.78 billion fell short of Street forecasts.

Investors were looking for Booz Allen stock to bottom out after it lost 9% year to date, as concerns grew about its relationship with the Trump administration. In January, the Treasury Department canceled all 31 separate contracts with Booz Allen, amounting to $21 million, citing a failure “to implement adequate safeguards to protect sensitive data.”

In late April, Treasury Secretary Scott Bessent told Senate lawmakers that Treasury officials “no longer have confidence” in the company.

IBM’s (IBM) 11% stock rally on Thursday, following a landmark announcement by the US Commerce Department to award $2 billion in grants to fund domestic quantum computing firms, created a windfall for the company. And the stock rose another 3% on Friday morning.

The move added about $26 billion to IBM’s market cap, bringing it to $237.8 billion, Yahoo Finance’s Brian Sozzi reported. He writes:

IBM secured the single-largest allocation in the program — a $1 billion government grant — which the tech giant will match with $1 billion of its own capital to construct “Anderon” in Albany, New York. It’s being billed as America’s first pure-play, dedicated 300mm quantum chip manufacturing foundry.

The hype around this deal reflects a transition in IBM’s quantum roadmap from a long-term research and development project into a critical national-level manufacturing platform. In turn, the company is viewed as the primary infrastructure and foundry provider for its own hardware and that of its competitors.

Most analysts on Wall Street have come out in favor of the news.

Read more here.

Estée Lauder (EL) stock jumped 10% after late-stage merger talks with Spanish beauty group Puig (B1B.F) ended. Puig’s stock fell 13%.

Bloomberg reported that Charlotte Tilbury’s compensation demands for the deal were a sticking point in the negotiations. Charlotte Tilbury sold her makeup brand to Puig in 2020.

Estée Lauder, which owns cosmetics brands including Clinique and Mac, said the company remains focused on executing its turnaround strategy.

“Today, we are reiterating our confidence in the power of our incredible brands, our talented teams, and our strength as a standalone company,” CEO Stéphane de La Faverie said. “We are more optimistic than ever about our ability to unlock significant long-term value through Beauty Reimagined, and we remain focused on accelerating that progress.

Bloomberg reports:

Oil rose after three days of declines, as statements by Iran on uranium and the Strait of Hormuz pared earlier optimism over progress in the negotiations with the US.

Brent (BZ=F) climbed toward $105 a barrel, but is still down more than 4% this week. West Texas Intermediate (CL=F) was near $98. Iran said the latest proposal from the US partly bridged the gap between the warring sides, but comments from the Islamic Republic’s Supreme Leader about keeping Tehran’s uranium stockpile and a dispute over tolls in the Strait of Hormuz clouded the outlook for a breakthrough.

The conflicting statements on key issues left it unclear if the two sides were any closer to a deal after renewed threats of escalation in recent days, buffeting oil prices as traders try to gauge when energy flows through the strait will fully resume. The war and the curtailment in supplies has seen global stockpiles of crude oil and products being drawn down at a record pace, according to Goldman Sachs Group Inc.

Read more here