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Investors are pricing in a potential Federal Reserve rate increase as soon as December 2026, marking a sharp shift from expectations for further easing after a run of stronger-than-expected U.S. inflation data.

CME Group’s FedWatch tool shows futures markets assigning nearly a 51% probability to a rate hike by December 2026. The odds rise to about 60% for January 2027 and exceed 71% by March 2027. The repricing follows data showing consumer and wholesale inflation at multiyear highs, while import and export prices have climbed back toward levels seen during the prior inflation surge.

The Survey of Professional Forecasters released May 15, 2026, showed economists now expect second-quarter U.S. inflation could reach as high as 6%. The Fed held rates steady at its latest FOMC meeting, though three officials dissented over guidance suggesting the next move could lean toward a cut. The U.S. Senate confirmed Kevin Warsh as the next Fed chair on May 13, 2026, in a 54-45 vote.

Ulta Beauty (NASDAQ: ULTA) shares fell 1.9% in afternoon trading after April CPI rose 3.8%, the highest reading in nearly three years, reinforcing concerns that tariffs and higher oil prices are lifting consumer costs and pressuring discretionary retail spending.

Higher inflation limits the Federal Reserve’s room to cut rates, keeping household borrowing costs elevated. Retailers may see near-term sales support from consumers buying ahead of tariff-driven price increases, but that demand could weaken in later quarters. Oil near $107 a barrel adds further pressure through higher fuel costs.

Ulta shares are down 18% in 2026 and recently traded at $508.72, 28% below their 52-week high of $706.82 set in February 2026. The stock rose 3.3% on April 24, 2026, after Jefferies upgraded Ulta to Buy from Hold and raised its price target to $700 from $635, citing stronger cosmetics demand and higher consumer engagement.

Amentum Holdings (NYSE: AMTM) reported flat first-quarter 2026 revenue of $3.48 billion, in line with Wall Street expectations, while GAAP earnings of $0.22 a share missed consensus by 15.3%. Shares rose to $24.70 from $23.95 before the earnings release.

The government engineering services provider guided full-year 2026 revenue to $14.13 billion at the midpoint, broadly in line with analyst estimates. Management cited operating margin expansion from cost synergies, disciplined contract execution and a shift toward higher-margin work.

CEO John Heller pointed to stronger net bookings and backlog growth, including wins in defense and commercial digital infrastructure. CFO Travis Johnson said the company is progressing toward its leverage target, which could increase flexibility for future capital deployment. Investors will watch backlog conversion, U.S. defense budget trends and whether margin gains can be sustained.

Perella Weinberg Partners shares fell 4.6% in afternoon trading on May 16, 2026, after April CPI rose 3.8% from a year earlier, pushing the 10-year Treasury yield to 4.43% and pressuring sentiment toward investment banks.

Higher rates can weigh on leveraged buyout financing and reduce IPO valuations for high-growth issuers, creating a headwind for advisory and underwriting revenue. That offsets a stronger first-quarter backdrop for investment banking, including higher year-over-year investment banking revenue at Goldman Sachs and increased U.S. IPO deal count.

Perella Weinberg shares were flat for 2026 at $17.48, trading 28.2% below their 52-week high of $24.34 reached in February 2026. The stock has been volatile, with 21 moves of more than 5% over the past year. Six months earlier, shares fell 8% after third-quarter 2025 revenue dropped 40.8% year over year to $164.6 million, below analyst estimates of $179.8 million, while adjusted EPS of $0.13 missed the $0.15 consensus.

DigitalOcean Holdings Inc. (NYSE: DOCN) shares fell 5.6% in afternoon trading on May 15, 2026, after April consumer inflation data came in above expectations, reducing investor confidence in near-term Federal Reserve rate cuts.

The Consumer Price Index rose 3.8% from a year earlier in April, exceeding economists’ forecasts. Persistent inflation raised expectations that interest rates could remain higher for longer, weighing on growth-oriented technology and software stocks by reducing the present value of future earnings.

The move followed a 33.7% gain seven days earlier after DigitalOcean reported first-quarter 2026 adjusted earnings of $0.44 a share, 67.7% above consensus estimates, on revenue of $257.9 million, up 22.4% year over year. The company also issued second-quarter revenue guidance 4.8% above analyst expectations and raised its full-year revenue and adjusted earnings outlook. DigitalOcean shares remain up 211% year to date at $152.17, near their 52-week high of $163.95 reached in May 2026.

Technology and software stocks fell in afternoon trading after April CPI rose 3.8% from a year earlier, above economists’ forecasts, reducing expectations for near-term Federal Reserve rate cuts.

Higher-for-longer interest rates weighed on growth valuations, pressuring shares including SoundHound AI (SOUN), HubSpot (HUBS), Asana (ASAN), Zoom (ZM) and Akamai (AKAM). Investors reassessed future earnings assumptions across software and AI-linked names as inflation remained above the Fed’s target.

SoundHound AI was also under pressure after recent first-quarter results showed revenue rose 51.7% year over year to $44.2 million, topping estimates, while its GAAP loss of 11 cents a share was wider than the expected 10-cent loss. The company reported quarterly cash burn of $26.73 million and an operating margin of minus 51.3%. SoundHound shares were down 25.1% year to date at $7.94, 62.9% below their 52-week high of $21.40.

Comfort Systems (FIX) shares fell 3.5% in May 15, 2026, afternoon trading after April CPI rose 3.8% from a year earlier, lifting the 10-year Treasury yield to 4.43% and pressuring rate-sensitive construction demand.

The move came as the 30-year fixed mortgage rate stood at 6.45% earlier in the week, while existing-home sales growth missed analyst expectations. The median existing-home price reached a record $417,700 in April, further weighing on housing affordability.

Higher Treasury yields typically feed into mortgage rates, reducing buyer eligibility and demand for new construction. Persistent inflation also raises costs for inputs such as asphalt, plastics, lumber and fuel. Comfort Systems remains up 95.1% year to date at $1,958, near its 52-week high of $2,033. The stock had gained 4.6% about two weeks earlier after KeyBanc upgraded it to Overweight and set a $2,004 price target.

Concrete Pumping (BBCP) and APi Group (APG) traded lower after April CPI rose 3.8% from a year earlier, pushing the 10-year Treasury yield to 4.43% and reinforcing expectations for higher mortgage rates.

The move pressured construction-related stocks as the 30-year fixed mortgage rate stood at 6.45% earlier in the week and existing home sales growth missed analyst expectations. The median existing home price reached a record $417,700, further straining affordability.

Concrete Pumping shares were at $7.47, up 7.9% year to date and near a 52-week high of $8.08. The stock has posted 13 moves of more than 5% over the past year. Its largest recent decline came 11 months earlier, when shares fell 15.6% after first-quarter fiscal 2025 revenue, operating profit and earnings missed estimates, with sales down 12%.

Sterling Infrastructure, Construction Partners, FTAI Infrastructure, MasTec and Ameresco traded lower in the May 15, 2026, afternoon session after April CPI rose 3.8% year over year, pushing the 10-year Treasury yield to 4.43% and pressuring rate-sensitive construction and housing stocks.

The inflation data reinforced expectations for higher-for-longer borrowing costs. The 30-year fixed mortgage rate stood at 6.45% earlier in the week, while existing home sales growth missed analyst expectations and the median existing home price reached a record $417,700.

Ameresco shares remained down 6.6% year to date at $28.64, 33.8% below their 52-week high of $43.23 set in October 2025. The stock has been volatile, with 40 moves of more than 5% over the past year. Its largest move came nine months earlier, when shares rose 39.4% after second-quarter revenue increased 8% to $472.3 million and adjusted EPS of $0.27 beat expectations.

Restaurant stocks traded mixed on May 15, 2026, after April CPI rose 3.8% from a year earlier and Brent crude climbed to about $107 a barrel, intensifying concerns that inflation and fuel costs are squeezing dining demand.

National gasoline prices remained above $4.50 a gallon, more than 50% higher since late February. Restaurant industry traffic fell 2.3% year over year in March, with Applebee’s and Domino’s reporting softer sales while McDonald’s posted 3.7% growth as consumers shifted to lower-cost options.

Kura Sushi USA Inc. (KRUS) was among the affected names. The stock was down 2.5% year to date at $52.86, 44.8% below its 52-week high of $95.83 set in July 2025. Its prior notable move came on April 21, 2026, when shares rose 4.7% after Iran reopened the Strait of Hormuz, sending crude prices lower and easing margin concerns for restaurant operators.

Soros Fund Management initiated a Berkshire Hathaway stake in the first quarter, buying 133,277 shares valued at about $63.9 million as of March 31, 2026, according to a 13F filing cited by MarketWatch.

The filing showed the fund’s equity portfolio rose 5.7% to $9.12 billion during the quarter, despite a 4.6% decline in the S&P 500. The Berkshire purchase followed Warren Buffett’s planned retirement at the end of 2025 and Greg Abel’s succession as CEO. Berkshire shares had fallen 4.7% in the fourth quarter amid weakness in its insurance business.

Soros Fund also increased Nvidia holdings by 61.2% to 1,073,206 shares, Apple by 20.3% to 500,534 shares and Taiwan Semiconductor Manufacturing by 49.3% to 522,318 shares. It opened a small Micron position of 2,824 shares. The fund cut Amazon by 17.5% to 1,945,789 shares, Alphabet by 10.2% to 573,929 shares, Microsoft by 19.4% to 211,966 shares and Tesla by 6.3% to 53,093 shares.

SpaceX plans to list on Nasdaq as early as June 12, 2026, under the ticker SPCX, Reuters reported, citing people familiar with the matter. The Elon Musk-led rocket and satellite company has accelerated its IPO timetable after faster-than-expected SEC review of its filing.

The company aims to publish its prospectus as early as May 20, 2026, begin its roadshow on June 04, 2026, and price shares as soon as June 11, 2026, the report said. The schedule moves the listing ahead of an earlier target near late June.

SpaceX is seeking to raise about $75 billion at a valuation of up to $1.75 trillion, which would make it the largest equity fundraising on record. Morgan Stanley, Bank of America, Citigroup, JPMorgan and Goldman Sachs are leading the offering, with 16 additional banks involved in institutional, retail and international distribution.

Alphabet’s YouTube and Snap settled a lawsuit with a rural Kentucky school district before a scheduled June 12, 2026, trial in California federal court, according to court filings. The case alleged social media platforms used addictive algorithms and product designs that harmed students’ attention and mental health, forcing schools to spend more on related crises.

Terms of the settlement were not disclosed. Meta Platforms and TikTok remain defendants in the case, which investors are watching as a potential benchmark for more than 1,200 similar school district lawsuits nationwide. Bloomberg Intelligence estimates the litigation wave could create theoretical legal exposure approaching $400 billion for major technology companies.

Legal pressure is widening for social media firms. Earlier in 2026, juries found Meta and Google liable in cases tied to alleged addictive platform designs, while Meta was ordered to pay $375 million in a New Mexico child-safety case. Meta also faces a separate lawsuit from dozens of state attorneys general in August 2026, with potential remedies that could affect social features and recommendation algorithms.

AECOM (NYSE: ACM) fell after reporting flat year-over-year revenue of $3.80 billion for the first quarter of calendar 2026, missing Wall Street expectations, even as adjusted earnings of $1.59 a share topped consensus by 3.5%.

Management cited slower project ramp-ups in the Middle East and delayed customer activity in some international markets. Chief Financial and Operations Officer Gaurav Kapoor said the Middle East created a 100-basis-point revenue headwind, though profit impact was limited by local joint venture structures.

AECOM raised its full-year profit outlook, pointing to a record backlog, growth in the Americas and expected recovery in the Middle East. The company also said proprietary artificial intelligence tools are supporting project delivery, proposals and recent energy-sector contract wins. Shares traded at $70.23 after the results, down from $79.50 before the report.

Oracle Corp. shares fell 5% in afternoon trading on May 16, 2026, after April consumer inflation data came in above expectations, reducing investor confidence that the Federal Reserve will cut interest rates soon.

The April Consumer Price Index rose 3.8% from a year earlier, topping economists’ forecasts. Persistent inflation typically weighs on growth-oriented technology and software stocks because higher rates reduce the present value of future earnings.

Oracle (NYSE: ORCL) has been volatile, with 29 moves of more than 5% over the past year. The stock is down 6.7% year to date and recently traded at $182.56, or 44.4% below its 52-week high of $328.33 reached in September 2025. The decline follows a 5.2% gain 11 days earlier, when upbeat earnings and forecasts from software peers including Atlassian, Salesforce, ServiceNow and Twilio lifted sentiment across the sector.

Morgan Stanley sharply raised its 2026-2028 AI optical transceiver shipment forecasts in a May 14, 2026, report, citing faster-than-expected demand from hyperscale data centers and extended capacity constraints across the supply chain.

The bank lifted its 2027 forecast for 1.6T transceivers to 79 million units from 24 million, a 233% increase. It expects capital spending by the top 11 global cloud providers to reach $735 billion to $795 billion in 2026, up about 60% from 2025, as Amazon, Google, Meta and others expand AI infrastructure. Morgan Stanley estimates the global AI optical transceiver market will grow to $102 billion in 2028 from $18 billion in 2025.

Morgan Stanley said shortages in lasers, memory and ASICs remain key bottlenecks but are accelerating adoption of silicon photonics, which it expects to overtake traditional technology in 2026. The bank said co-packaged optics are unlikely to materially disrupt pluggable modules until 2028 or later, leaving a two- to three-year window for incumbent suppliers.

Insight Enterprises (NASDAQ: NSIT) reported first-quarter 2026 revenue of $2.13 billion, up 1.2% from a year earlier and above Wall Street expectations, as cloud and AI-related services drove stronger profitability. Non-GAAP earnings were $2.88 a share, 17.9% ahead of consensus estimates.

Management cited double-digit gross profit growth in Cloud and Core Services, supported by mid-market demand for integrated technology projects across hardware, software and services. CEO Jack Azagury pointed to client wins in manufacturing and financial services involving Microsoft licensing, Snowflake data infrastructure and dedicated AI capabilities.

The company said it will pause M&A for the rest of 2026 to focus on integrating prior acquisitions and accelerating organic growth in AI, cloud and security. CFO James Morgado said supply chain complexity and weaker large-enterprise spending remain headwinds, though hardware backlog and expense controls should support execution. Shares recently traded at $87.13, up 26.3% from $69.01 before earnings.

Cadre Holdings Inc. (NYSE: CDRE) reported first-quarter 2026 revenue of $155.4 million, up 19.5% from a year earlier and in line with Wall Street estimates, while adjusted earnings of $0.18 a share topped consensus by 98.7%. Shares traded at $27.24 after the report, down from $31.42 before earnings.

The aerospace and defense supplier guided full-year revenue to $747 million at the midpoint, 0.9% above analysts’ estimates. Management cited recurring demand across law enforcement, military and nuclear safety products, along with a record orders backlog, including an $87 million blast attenuation seat contract.

Margin pressure weighed on results, with management pointing to unfavorable product mix in armor and nuclear products and softness in third-party discretionary distribution items. Cadre said 2026 growth will depend on backlog conversion, integration of TIER Tactical and Alien Gear Holsters, and demand tied to government defense and nuclear budgets.

Steris Corp. (NYSE: STE) reported first-quarter calendar 2026 revenue of $1.59 billion, up 7.3% from a year earlier and in line with Wall Street expectations, while adjusted earnings of $2.83 a share missed consensus estimates by 0.7%.

Management said growth was driven by stronger U.S. procedure volumes, service revenue, consumables and expansion in its Healthcare and Life Sciences segments. The company also cited improved performance in capital equipment, though inflation, tariffs and severe winter weather weighed on procedural volumes and service activity, particularly in its Applied Sterilization Technologies business.

Steris said it expects mid- to high-single-digit organic growth over the coming year, supported by service and consumables demand, automation and AI-related workflow investments, and recent tuck-in acquisitions. Shares traded at $207.19 after the report, up from $201.85 before the earnings release.

Stratasys Ltd. (NASDAQ: SSYS) reported first-quarter 2026 revenue above analyst expectations, though sales fell 2.5% from a year earlier to $132.7 million as customers delayed capital spending on 3D printers.

The company posted a non-GAAP loss of $0.01 per share, $0.01 better than consensus estimates. Full-year revenue guidance of $570 million at the midpoint was 1% above Wall Street expectations. Management cited recurring revenue from consumables and customer support as a stabilizing factor, while higher tariff costs and foreign exchange headwinds pressured margins.

Stratasys said growth in 2026 is expected to be supported by aerospace and defense demand, dental market expansion and new materials and software offerings. The company highlighted a defense pipeline and CE Class IIa certification for TrueDent Resin in Europe as key drivers. Shares traded at $8.46 after earnings, down from $9.25 before the report.