Starbucks’ Software Warning Shot: 8 Key Items Shaping the Stock Market Thursday

These are the early headlines and other items poised to influence the market at the start of trading Thursday. As we share this collection of market drivers, U.S. equity futures point to a mixed start to the trading day.

1. Iranian armed forces targeted U.S. military infrastructure in neighbouring Gulf states on Thursday following U.S. strikes on Iran’s southern coastal and eastern provinces, putting further strain on a three-week-old ceasefire agreement… Oil prices, which had spiked amid concerns over the impact of the renewed attacks on global supplies, fell back on Thursday as investors weighed whether the flare-up was tactical and temporary or might augur a complete collapse in the ceasefire. (Reuters)

The stock market appears to be shaking off renewed attacks following President Trump saying that Iran “badly” wants to make a deal to cease escalating hostilities in the Middle East. Trump also said that if the war resumed, the U.S. would “win it very quickly.”

Based on what we’ve seen over the last few months, there is ample room for both saber rattling and head fakes. To us that means, tracking the duration of future attacks, but the real tell, we think, 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 struck Iran for a second straight day, as a fragile truce between the two sides looked increasingly shaky… The traffic slowdown comes after Iranian attacks on vessels prompted US strikes, while President Donald Trump declared that the ceasefire with Iran was over. Some 20 commodity carriers crossed the strait in either direction on Wednesday, fresh data from Kpler show, making it one of the thinnest traffic flows since the interim peace deal in mid-June. It’s a stark shift from recent daily activity in the strait. In the three weeks since the US and Iran agreed to an interim deal to reopen Hormuz, average daily transits of commodity vessels was at 34, with a peak of 59 on June 24, Kpler data show. (Bloomberg)

While we look to see if the recently traded blows between the U.S. and Iran are just the latest flare-up in protracted peace talks or the unraveling of those conversations, we will continue to focus on the volume of ships moving through the Strait. Tracking those volumes will tell us how quickly, or not, oil prices will return to levels from late last year and supply chain pressures ease on a sustained basis. Those learnings will shape our expectations for inflation pressures and Fed monetary policy action.

3. The looming second-quarter earnings season—set against the pullback in big tech stocks, the resurgence of global geopolitical risks, and the specter of renewed inflation —has investors on edge… Collective S&P 500 earnings are expected to rise more than 24% from last year to just under $700 billion, according to LSEG data. That’s modestly slower than the nearly 30% advance recorded over the first three months of the year, but would deliver the best first-half profit performance since 2020. (Barron’s)

Quarterly results today, tomorrow, and early next week will set the tone for the Q2 2026 earnings season, but we’d argue the real fireworks won’t begin until we see results and updated guidance from Alphabet (GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT). That said, this morning, PepsiCo (PEP) reported mixed quarterly results with CEO Ramon Laguarta saying “Results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures…” The company’s North American food business reported flat volume for the quarter, and its North American beverage division saw volume drop 4%.

Yet…

4. Costco’s June sales were a mixed bag. While it reported its highest monthly sales of the year so far in June, same-store sales grew at their lowest rate since February on a year-over-year basis. The membership warehouse club reported that net sales rose 10.6% year over year in June to $29.24 billion, well below May’s 14.5% gain. Better performing departments included food, candy and frozen foods, the company said, along with bakery and meat. Among Costco ancillary businesses, gas, pharmacy, and hearing aids were top performers. (Barron’s)

Whenever we examine monthly data, be it from sales figures from Costco (COST) and Taiwan Semi (TSM), or inflation or retail sales, we have to keep in mind the context. In the case of Costco, that means taking a look not only at the reported adjusted sales figures for a certain month but how they stack up against the year-ago period. For June 2026, Costco reported total company adjusted comp sales of 7.0% with the closely tracked U.S. figure clocking in at 7.6%.

The naysayers will say that is down from 8.0% and 8.7%, respectively, compared to May 2026. However, it doesn’t take into account the June 2026 figures stand on top of the 6.2% total company adjusted retail sales of 6.2% in June 2025 and 5.5% for the U.S. And those June 2025 figures were higher than those for May 2025. Once again, context paints a fuller picture of what is really going on.

The other part that few are picking up on is Costco exited June 2026 with 933 warehouse locations, up from 907 in the year-ago quarter. That bodes well for another step up in membership and the corresponding high margin membership fee revenue stream. We have some room in our COST position size and will add them to our potential shopping list.

5. SK Hynix shares rose on Thursday ahead of the South Korean company’s listing of American depositary receipts… The memory giant is launching an ADR listing on the Nasdaq under the ticker symbol SKHY on Friday. The underwriters are offering 177.9 million new shares and pricing will be announced later on Thursday with allocations given later in the day. (Barron’s) SK Hynix Inc.’s US listing is more than seven times oversubscribed, according to people familiar with the matter, underscoring strong investor appetite despite recent volatility in the Korean memory chipmaker’s shares. (Bloomberg)

Following SpaceX (SPCX) and Cerebras (CBRS) falling below their respective IPO prices, this offering from SK Hynix is the next high-profile IPO for us to track. We know memory demand is high and supply is tight, which puts SK in a nice position alongside Micron (MU), which is in our EPS All-Stars basket. However, with Samsung (SSNLF) reportedly looking to raise the average selling price for its memory chips by up to 20% for Q3 2026, it’s another reason to think memory revenue will step up again in the back half of 2026.

The flip side of that is that higher memory costs will strengthen the existing headwind for smartphone, PC, and other connected device unit demand.

6. Starbucks Corp. is developing in-house tools with the help of artificial intelligence that could replace some software applications it now buys from companies such as Microsoft Corp. and International Business Machines Corp. The coffee chain is building 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 Starbucks-developed software could roll out by the end of next year, pending the results of testing. (Bloomberg)

When we contemplate how individuals are using AI to drive productivity, the fact that companies are doing more internally with AI to improve and streamline their businesses should not come as a surprise. That includes replacing software applications, and odds are Starbucks (SBUX) isn’t the only one. This will foster the concern we’ve seen for software companies such as Salesforce (CRM), Oracle (ORCL), ServiceNow (NOW) and others.

7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), Existing Home Sales (June), EIA Natural Gas Stocks Change (Weekly).

8. Companies reporting today per TipRanks: AM – PepsiCo (PEP), Simply Good Foods (SMPL). PM – WD40 (WDFC).

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At the time of publication, TheStreet Pro was long AMZN, COST, GOOGL, META, MSFT, and MU.