EB Daily Market Report - Tuesday, May 12, 2026
Good afternoon!
A couple quick items before I get to the market.....
Later today, we'll be hosting our monthly Max Pain event, which starts at 5:00pm ET. It's an interesting month as we've seen tremendous strength over the past 6 weeks in many stocks that are heavily traded in options. The semiconductors immediately come to mind, so it's no surprise that the Dow Jones U.S. Semiconductor Index ($DJUSSC) is down over 3% today. Room instructions for today's event were sent out in a separate email.
Then, mark your calendar as we will be hosting a very important LiveStream event this Saturday, May 16th, "5-Step Process to Trade with More Confidence". This will represent an in-depth look into our "War Room", which is our process in identifying candidates for our Portfolios. It's a great lesson for everyone in searching for the ideal trading and/or investing candidates. This event will begin promptly at 10:00am ET and I look forward to seeing you there!
On to today's market action....
The April CPI was released this morning and while the headline CPI number matched Wall Street expectations at a 0.6% rise, the Core CPI came in a bit hotter than expected, rising 0.4%, slightly ahead of the +0.3% consensus estimate. That can be a problem for interest-rate-sensitive areas and for growth stocks and all of the above are struggling today.
The NASDAQ 100, the hottest index over the past 6 weeks, is down 1.7%, more than the other key indices. Technology (XLK, -2.57%) is easily the weakest sector, though consumer discretionary (XLY, -1.26%) is also down considerably.
Autos ($DJUSAU, -3.25%) and home construction ($DJUSHB, -1.34%) are lagging on the session, with the latter likely down as a result of a rising 10-year treasury yield ($TNX), which is up 5 basis points to 4.46%. If the TNX closes there, it would be the highest close since July 2025. That could spook growth stocks further, on top of the weakness seen in growth stocks today.
The rally off today's earlier low has been more skewed to value-oriented areas. Health care (XLV, +2.13%) and consumer staples (XLP, +1.64%), in particular, are having very solid days.
The Volatility Index ($VIX, -0.92%) is down today, a big surprise given the size of technology losses. In my opinion, that's a pretty good indication that any selling is not likely to last and may simply be contained within max pain week. This is a good sign for the bulls.
Finally, there's an interesting stock that will be reporting this afternoon in the renewable energy space ($DWCREE, -2.09%). Nextpower, Inc. (NXT, -1.83%) has been consolidating in an ascending triangle, which is a bullish continuation pattern. It needs to execute, but earnings tonight could be the catalyst.....or not. If NXT posts revenue and EPS ahead of estimates and the stock opens tomorrow above 130.42, then I'd expect to see its pattern measurement of 160 reached in the not-too-distant future. It's a big gamble to hold any stock into its earnings report, because the reaction can be dramatic in either direction. Still, the pattern is bullish and intriguing, so I just wanted to pass it along.
Happy trading!
Tom