Markets Brace for Earnings, Inflation Data Hits 4.2%

Macro Takes the Wheel

US inflation jumped to 4.2% in May — a three-year high. The spike follows an energy shock tied to Middle East tensions. That puts the Federal Reserve in a difficult spot. Rate cut expectations are being scaled back fast.

Crude oil gained 3% today. Iran-linked headlines continue to drive energy volatility. The backdrop is adding pressure to consumer-facing stocks already struggling with weak demand signals.

Tech Earnings in the Spotlight

ORCL reports Q4 2026 results today after the close. Options traders are clustered around near-term expiries — June 12, 17, and 18. Short interest sits at just 2.1% of free float. A beat could spark a sharp move higher. ADBE follows on Wednesday, with AI monetisation progress the key watch.

Cybersecurity shorts are covering hard. Short interest in CIBR plunged 63% in a single day to 0.37% of float — a 73-week low. The cybersecurity ETF BUG saw shorts fall 29.6% in one week.

Earnings Reactions

Cracker Barrel beat Q3 estimates. Analysts raised forecasts following the print. Academy Sports moved the other way — analysts slashed targets after Q1 disappointed.

Jazz Pharmaceuticals drew analyst attention today. A new cancer drug is seen driving a $1.3 billion market opportunity.

Europe Watch

ASML's cost to borrow surged 167% in one week to 1.83%. Short-covering is accelerating in the chip equipment giant. This mirrors the broader semiconductor upgrade theme, with KLAC and AMAT both seeing raised analyst targets on strong chip equipment demand.

BT.A releases full-year 2026 results Wednesday. Investors will assess progress on the UK telco's cost-cutting drive.