SG Morning Brief | Dow Hits Record on Iran Peace Draft, Walmart Drops 7% on Fuel Cost Warning

US Overnight

The Dow Jones posted a record close of 50,285.66 (+0.55%), its first since February, after a report that a final draft of a US-Iran peace agreement had been reached with Pakistani mediation. The S&P 500 inched up 0.17% to 7,445.72 and the Nasdaq edged 0.09% higher to 26,293.10. The Russell 2000 outperformed, gaining 0.93% to 2,843.45. Markets opened lower on rising oil and yields after Iran's Supreme Leader issued a directive to retain enriched uranium, but reversed sharply in the afternoon on the Iran peace headline. Oil and longer-end Treasury yields pulled back on the news. The VIX fell 3.9% to 16.76. Intuit plunged 20% to $307.07 after issuing guidance well below expectations amid IRS free-filing headwinds. The session was a tale of two halves: the morning traded the inflation-and-war narrative, the afternoon traded the peace-and-disinflation narrative. The Dow's record close suggests the market is pricing in a deal, even though Iran has rejected prior frameworks twice.

Key Movers

Walmart (WMT) -7% — Walmart fell 7.27% to $121.34 after issuing cautious profit guidance that overshadowed solid Q1 results. Revenue of $177.8 billion beat the $174.83 billion consensus (+7.3% YoY), with e-commerce surging 26%. But operating income was hit by 250 basis points from higher fuel costs. CFO John David Rainey warned consumers will feel more pressure from fuel in Q2. Full-year guidance was left unchanged, disappointing a Street that had priced in a raise.

Arm Holdings (ARM) +16% — ARM surged 16% to a new all-time high, pushing its market cap above $300 billion for the first time. The catalyst was Nvidia's earnings call, where CFO Colette Kress said Nvidia aims to become the "world's leading CPU supplier" via its Arm-based Vera CPU, opening a "$200 billion addressable market" with $20 billion in CPU revenue expected this year. Since ARM collects royalties on every Vera chip shipped, the revenue visibility translates directly into an expanded royalty outlook.

IBM (IBM) +12% — IBM surged 12.43% to $252.97 after the Trump administration announced $2 billion in equity stakes across nine quantum computing companies, with IBM receiving $1 billion to build America's first purpose-built quantum chip foundry (named Anderon) in Albany, NY. D-Wave Quantum jumped 33.4% and Rigetti Computing rose 30.6% on $100 million allocations each.

SGX Preview

The STI was trading near 5,004 on Monday. DBS was at S$57.70, UOB at S$38.54. The Iran peace draft is the most significant development for Singapore markets this week: if confirmed, oil drops further below $100 and the inflationary headwind that has weighed on Singapore's trade-dependent economy begins to ease. Banks remain well-positioned under higher-for-longer rates. Walmart's warning about fuel-driven consumer pressure is a data point worth watching for local retailers.

Asia Pre-Market

Gold is at $4,544 (+0.20%), Bitcoin at $77,686 (+0.38%), and Brent crude at $104.88 (-0.13%). The VIX at 16.76 is the lowest in a week. The Dow's record close and Iran peace news set up a constructive backdrop for Asian markets today, though the Intuit after-hours plunge may weigh on tech sentiment at the margin. The key question: does the Iran deal actually close, or is this another false start?

Today's US Earnings and Economic Calendar

No major SG-relevant earnings today. SpaceX IPO is confirmed for June 12 at a $1.75 trillion valuation, with Goldman Sachs as lead underwriter.

Data Spotlight: S&P Global Flash PMI — The May flash PMI provides the first read on business activity this month. Manufacturing has been in contraction due to elevated input costs, while services has held up. A rebound would signal the oil-driven cost squeeze is easing. A further decline reinforces stagflation fears.

One More Thing

The Dow at a record and Walmart down 7% on the same day tells you everything about this market. The index is being carried by financials and industrials, while the consumer is buckling under $4.50 gasoline. Walmart's CFO essentially told investors that the lower-income consumer is running out of buffer. That is not a recession signal — revenue still grew 7% — but it is a margin signal. If the Iran deal closes and oil drops to $80, this problem solves itself. If it doesn't, the gap between the Dow's record and the consumer's reality widens.

This briefing is for informational purposes only and does not constitute investment advice.