U.S. stocks see midday swings as GameStop gains, Palo Alto Networks and Blackstone fall

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U.S. stocks midday swings

Highlights

GameStop jumps 6% after first-quarter revenue rises 14% to $835.3 million and board authorizes a $2 billion share repurchase.
Energy stocks outperform as West Texas Intermediate oil futures rise nearly 2% on Middle East tensions, boosting Exxon Mobil and Marathon Petroleum by 3%, APA Corp by 2%.
Private equity firms weaken with Blackstone and KKR falling over 4% after Partners Group caps withdrawals, as quantum and photonics stocks also decline following recent rallies.

Company updates drive divergent midday trading

As reported by CNBC, several individual stocks are making outsized midday moves as investors respond to quarterly results, guidance changes and analyst rating actions.

GameStop is up 6% after reporting first-quarter revenue of $835.3 million, up 14% from a year earlier, while its board also approves a $2 billion share repurchase authorization. Palo Alto Networks falls almost 6% even after issuing stronger-than-expected revenue guidance for the current quarter, raising its full-year revenue outlook and posting fiscal third-quarter adjusted earnings of 85 cents per share on $3 billion in revenue, ahead of analyst expectations compiled by LSEG.

GitLab loses 2% after guiding for adjusted earnings per share of 17 cents to 18 cents, below the 19 cents expected by analysts polled by LSEG. The software company also says it will cut about 14% of its full-time workforce, or 350 employees, exit 22 countries and take $30 million to $35 million in pretax restructuring charges.

Other notable movers include Medtronic, which rises almost 5% after reporting better-than-expected fiscal fourth-quarter revenue of $9.81 billion, and Yum Brands, which adds 2% after Morgan Stanley upgrades the stock to overweight from equal-weight. Ulta Beauty drops 4% despite lifting its full-year earnings guidance, while Shake Shack declines 3% after downgrades from Morgan Stanley and Raymond James.

Sector rotation highlights energy strength and pressure on momentum trades

Energy stocks are higher as oil prices rise, lifting the S&P 500 energy sector. West Texas Intermediate futures are up nearly 2% after Israeli Prime Minister Benjamin Netanyahu tells CNBC that Israel and the U.S. are ready to attack Iran again if necessary, helping lift Exxon Mobil and Marathon Petroleum by 3% and APA Corp by 2%.

Quantum computing names are retreating as investors take profits after the prior session's rally. Rigetti Computing is down 10%, D-Wave Quantum falls 7%, IonQ loses 4% and IBM drops more than 7% after its recent announcement of plans to invest more than $10 billion in quantum computing.

Photonics stocks are also under pressure after two straight winning sessions tied to artificial intelligence and data center optimism. Coherent, which rose 17% in the prior session, is down almost 3%, while Lumentum, after a nearly 14% gain a day earlier, is off more than 8%.

Private equity firms are weaker after Bloomberg News reports that Swiss-based Partners Group caps withdrawals from one of its private equity funds. Blackstone and KKR tumble more than 4%, while Blue Owl Capital is down 3%. Elsewhere, Marvell Technology gains almost 6% after its record 32% jump on Tuesday, and Cboe Global Markets rebounds 3% after a three-day slide amid concerns over how perpetual futures in the U.S. could affect traditional exchanges.

Our earlier analysis of GameStop’s Q1 earnings beat and $2 billion share repurchase plan outlined why the stock’s pop still came with mixed technical signals. We noted that while the report and buyback supported sentiment, GME remained weak on medium- and long-term trend measures, with oversold readings raising the risk of a short-lived rebound and keeping key resistance/support levels in focus.

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