These are the early headlines and other things that will impact the market as trading begins on Thursday. As we share this collection of market drivers, US stock futures point to a mixed start to the trading day.
1. Iranian forces attacked US military infrastructure in neighboring Gulf states on Thursday following US strikes on Iran’s southern coastal and eastern provinces, further straining a three-week-old ceasefire agreement… Oil prices, which had soared amid concerns about the impact of renewed attacks on global supplies, fell back on Thursday as investors weighed whether the outbreak was tactical and temporary or could herald an outright collapse in the country Armistice. (Reuters)
The stock market appears to be shrugging off renewed attacks after President Trump said Iran “urgently” wants to reach a deal to end escalating hostilities in the Middle East. Trump also said the US would “win very quickly” if the war resumed.
Based on what we’ve seen over the past few months, there’s plenty of room for saber-rattling and head-faking. For us that means tracking the duration of future attacks, but the real trigger we believe will be the volume of traffic through the Strait of Hormuz…
2. Traffic through the Strait of Hormuz came to a near standstill on Thursday after the US attacked Iran for a second straight day, as a fragile ceasefire between the two sides increasingly faltered. The traffic slowdown came after Iranian attacks on ships led to US attacks, while President Donald Trump declared that the ceasefire with Iran was over. Around 20 cargo ships crossed the strait in both directions on Wednesday, creating one of the thinnest traffic flows since the interim peace deal in mid-June, new data from Kpler shows. It’s a marked departure from recent daily activity in the strait. In the three weeks since the U.S. and Iran agreed to a tentative deal to reopen Hormuz, the average daily transit number of goods ships has been 34, with a peak of 59 on June 24, Kpler data shows. (Bloomberg)
As we consider whether the recent U.S.-Iran clashes represent just the latest flare-up in protracted peace talks or the collapse of those talks, we will remain focused on the volume of ships passing through the Strait. Tracking these volumes will tell us how quickly, or not, oil prices will return to levels seen at the end of last year and how supply chain pressures will sustainably ease. These findings will influence our expectations for inflation pressures and the Fed’s monetary policy actions.
3. The looming second-quarter earnings season — amid a decline in big tech stocks, a resurgence in global geopolitical risks and the specter of renewed inflation — is keeping investors on tenterhooks… Total S&P 500 earnings are expected to rise more than 24% year-over-year to nearly $700 billion, according to LSEG data. That’s slightly slower than the nearly 30% rise seen in the first three months of the year, but would deliver the best first-half profit performance since 2020.Barrons)
Quarterly results today, tomorrow and early next week will set the tone for Q2 2026 earnings season, but we believe the real fireworks won’t begin until we see results and updated guidance from Alphabet (GOOGL), Amazon (AMZN), Meta (META) and Microsoft (MSFT). However, PepsiCo (PEP) reported mixed quarterly results this morning, with CEO Ramon Laguarta saying, “Results were muted in the quarter as U.S. food and beverage category performance weakened and consumer budgets tightened due to increasing inflationary pressures…” The company’s North American grocery business reported flat volume for the quarter, and its North American beverage division reported a 4% volume decline.
Still…
4. Costco’s June sales were mixed. While the highest monthly sales of the year so far were reported in June, same-store sales grew year-over-year to their lowest level since February. Membership Warehouse Club reported that June net sales rose 10.6% year-over-year to $29.24 billion, well below May’s 14.5% gain. According to the company, the better-performing departments included the grocery, confectionery and frozen food departments, as well as the bakery and meat departments. Among Costco’s ancillary businesses, gas, pharmaceuticals and hearing aids were the top performers. (Barrons)
Whenever we examine monthly data, be it sales figures from Costco (COST) and Taiwan Semi (TSM) or inflation or retail sales, we must keep context in mind. In Costco’s case, that means taking a look not only at the reported adjusted sales numbers for a given month, but also at how they compare to the same period last year. For June 2026, Costco reported total adjusted company sales of 7.0%, with the closely watched U.S. figure at 7.6%.
The naysayers will say that this is a decline of 8.0% and 8.7% respectively compared to May 2026. However, this does not take into account the June 2026 figures, which are in addition to the company’s overall adjusted retail sales of 6.2% in June 2025 and 5.5% for the US. And those June 2025 numbers were higher than those from May 2025. Once again, context shows a fuller picture of what’s really going on.
The other part that few pick up on is that Costco exited in June 2026 with 933 warehouse locations, up from 907 in the year-ago quarter. This bodes well for continued growth in membership and the corresponding revenue stream from high-margin membership fees. We still have some wiggle room in our COST position size and will add it to our potential shopping list.
5. Shares of SK Hynix rose on Thursday ahead of the South Korean company’s listing of American depositary receipts. The storage giant will launch an ADR listing on Nasdaq on Friday under the ticker symbol SKHY. The underwriters are offering 177.9 million new shares and pricing will be announced later on Thursday, with allocation taking place later in the day. The U.S. listing of (Barron’s) SK Hynix Inc. is more than seven times oversubscribed, according to people familiar with the matter, underscoring strong investor interest despite recent volatility in the Korean memory chip maker’s shares. (Bloomberg)
After SpaceX (SPCX) and Cerebras (CBRS) fell below their respective IPO prices, this offering from SK Hynix is the next high-profile IPO we can watch. We know memory demand is high and supply is tight, which puts SK in a good position alongside Micron (MU), which is in our EPS All-Stars basket. However, with Samsung (SSNLF) reportedly looking to increase the average selling price of its memory chips by up to 20% for the third quarter of 2026, this is another reason to believe that memory sales will rise again in the second half of 2026.
The downside is that higher storage costs will compound existing headwinds to demand for smartphones, PCs and other connected devices.
6. Starbucks Corp. is developing internal tools using artificial intelligence that could replace some software applications it currently offers from companies like Microsoft Corp. and International Business Machines Corp. buys. The coffee chain is developing alternatives to a Microsoft system that tracks inventory and an IBM tool that manages maintenance, according to an internal presentation reviewed by Bloomberg News. Some of the software Starbucks is developing could hit the market by the end of next year, pending test results. (Bloomberg)
When we think about how individuals are using AI to increase productivity, the fact that companies are working more with AI internally to improve and streamline their businesses should come as no surprise. This includes software application exchanges, and chances are Starbucks (SBUX) isn’t the only one. This will add to the concerns we are seeing with software companies like Salesforce (CRM), Oracle (ORCL), ServiceNow (NOW), and others.
7. Economic data today according to TipRanks: Initial and continuing jobless claims (weekly), existing home sales (June), change in EIA natural gas inventories (weekly).
8. Companies reporting on TipRanks today: AM – PepsiCo (PEP), Simply Good Foods (SMPL). PM – WD40 (WDFC).
Table of Contents
Additional Pro portfolio:
At the time of publication, TheStreet Pro has long been AMZN, COST, GOOGL, META, MSFT and MU.
https://pro.thestreet.com/portfolio/starbucks-software-warning-shot-8-key-items-shaping-the-stock-market-thursday
