Key Takeaways
- Macy’s (M) surpassed Q1 expectations with an adjusted EPS of $0.23 (vs. $0.13 est.) and raised its full-year sales and earnings guidance.
- Donald Trump claimed Iran has agreed to forgo nuclear weapons, a statement that has immediately impacted market sentiment and geopolitical risk premiums.
- Medtronic (MDT) reported a revenue beat of $9.81 billion but issued FY2027 earnings guidance slightly below analyst consensus.
- Citigroup significantly raised its price target for IBM (IBM) to $375, citing the company’s massive $10 billion investment in quantum computing.
- Geopolitical tensions remain high as Germany reports a shift in military momentum toward Ukraine, while Russia claims to have downed over 750 drones in 24 hours.
Retail Resilience: Macy’s Beats and Raises
Macy’s (M) delivered a strong start to 2026, reporting Q1 adjusted net income of $35 million, nearly triple the analyst estimate of $13.4 million. The retailer saw total revenue of $4.89 billion, driven by a 3.0% increase in comparable sales, marking its strongest first quarter in four years.
Management expressed confidence in its "Bold New Chapter" strategy, raising the full-year adjusted EPS outlook to $2.00–$2.20 from the previous $1.90–$2.10. Investors responded positively to the gross margin of 38.9%, which slightly beat expectations despite ongoing tariff pressures and supply chain shifts.
Mixed Outlook for Medtronic
Medtronic (MDT) reported Q4 revenue of $9.81 billion, exceeding the $9.64 billion estimate, supported by 6.6% organic revenue growth. While the company met adjusted EPS estimates of $1.55 and raised its quarterly dividend to $0.72 per share, its forward-looking guidance dampened some enthusiasm.
The medical device giant expects FY2027 adjusted EPS of $5.90 to $6.00, which falls short of the $6.06 analyst consensus. The lower-than-expected guidance suggests potential margin compression as the company navigates a shifting healthcare landscape.
Geopolitical Headlines Flip Market Sentiment
Global markets are reacting to a flurry of geopolitical developments, most notably a claim by Donald Trump that Iran has agreed to forgo nuclear weapons. This headline has introduced fresh volatility, as traders weigh the potential for a "big, beautiful peace deal" against the risk of sudden escalations.
In Europe, the German Defence Ministry noted a "sense of military momentum" on the Ukrainian side against Russia. Simultaneously, the Russian Defence Ministry claimed to have downed 754 drones over the last 24 hours. In the energy sector, President Putin has reportedly authorized TotalEnergies (TTE) to sell its 10% stake in the Arctic LNG 2 project, signaling a further decoupling of Western firms from Russian energy assets.
IBM’s Quantum Leap and Economic Data
Citigroup issued a major upgrade for IBM (IBM), raising its price target to $375 from $285. The bank highlighted IBM’s $10 billion five-year investment plan for quantum computing, suggesting the company is "underappreciated" and well-positioned to lead a market estimated to be worth $850 billion.
On the domestic front, US MBA Mortgage Applications fell 2.5% for the week ending May 29, even as the 30-year mortgage rate ticked down to 6.57%. Meanwhile, the IATA fuel leader warned of temporary fuel shortages at certain airports, noting that recent flight cancellations have led to a complex shift in global jet fuel demand.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.