Stocks Fall on Doubts About an Imminent US-Iran Peace DealMay 7, 2026
The S&P 500 Index ($SPX) (SPY) on Thursday closed down -0.38%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.63%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.12%. June E-mini S&P futures (ESM26) fell -0.42%, and June E-mini Nasdaq futures (NQM26) fell -0.18%.
Stock indexes gave up early gains on Thursday and settled lower amid doubts about an imminent US-Iran peace deal. Stocks retreated as crude oil prices recovered from sharp losses and pushed bond yields higher on a report that said the Trump administration is looking to restart its plan to guide stranded ships through the Strait of Hormuz after pausing it earlier this week.Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Stocks initially moved higher on Thursday, with the S&P 500 and Nasdaq 100 posting new all-time highs, and the Dow Jones Industrial Average posting a 2.75-month high. Better-than-expected corporate earnings results lifted stocks, powered by tech earnings and high expectations for artificial intelligence. Strength in software stocks boosted the broader market after Datadog surged by more than 30% on blowout earnings. However, chipmakers and AI-infrastructure stocks turned lower on Thursday afternoon and weighed on the overall market.
Stocks also found support from Thursday’s better-than-expected US economic news on weekly jobless claims, Q1 productivity and labor costs, construction spending, and consumer credit.
US weekly initial unemployment claims rose +10,000 to 200,00, showing a stronger labor market than expectations of 205,000. Weekly continuing claims unexpectedly fell -10,000 to a 2.25-year low of 1.766 million, showing a stronger labor market than expectations of an increase to 1.800 million.
US Q1 nonfarm productivity rose +0.8%, stronger than expectations of +0.6%. Q1 unit labor costs rose by +2.3%, weaker than expectations of +2.5%.
US Mar construction spending rose +0.6% m/m, stronger than expectations of +0.3% m/m.
US Mar consumer credit rose by +$24.855 billion, stronger than expectations of +$13.720 billion and the largest increase in 3.25 years.
Fed comments on Thursday were slightly hawkish and negative for stocks and bonds. Boston Fed President Susan Collins said interest rates should stay at current "mildly restrictive" levels, but “if the inflation trajectory looked like it was significantly moving in the wrong direction," policymakers would "need to reassess what the appropriate policy would be." Also, Cleveland Fed President Beth Hammack said the FOMC's signal that the next rate move will be a cut is misleading, and her baseline is that interest rates will be on hold for a long period.
The markets are awaiting further updates after the US presented a proposal to Iran that would gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports. Negotiations over Iran's nuclear program would come later in the process. Iran is expected to respond via Pakistan in the next few days.
WTI crude oil prices (CLM26) recovered from a -4% decline on Thursday and settled little changed. Crude prices found support on a report that said the US is looking to restart military operations as soon as next week to guide commercial ships with naval and air support through the Strait of Hormuz. The Wall Street Journal reported that Saudi Arabia and Kuwait have lifted restrictions on the US military's use of their bases and airspace when Iran launched missiles and drones at the UAE in response to the US effort to open the strait. Saudi Arabia and Kuwait had blocked the US military's use of their bases and airspace after senior US officials downplayed Iranian attacks on the Persian Gulf in reaction to opening the strait. The strait remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 4% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings results thus far in this reporting season have been supportive of stocks. As of Thursday, 84% of the 425 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 fell from a 2.5-week high and closed down -0.90%. China's Shanghai Composite rallied to a 2-month high and closed up +0.08%. Japan's Nikkei Stock Average soared to a record high, finishing sharply higher by +5.58%.
Interest Rates
June 10-year T-notes (ZNM6) on Thursday closed down -9 ticks. The 10-year T-note yield rose +4.0 bp to 4.389%. Jun T-notes fell from a 1-week high on Thursday and settled lower, and the 10-year T-note yield recovered from a 1.5-week low of 4.319% and moved higher. T-notes fell as crude oil prices rebounded following a report that the US is seeking to resume military operations to open the Strait of Hormuz. Also, Thursday’s better-than-expected US economic news on weekly jobless claims shows strength in the US labor market, which is a hawkish factor for Fed policy. In addition, hawkish Fed comments today weighed on T-note prices after Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack said they favored keeping interest rates on hold.
T-notes initially moved higher on Thursday after crude oil prices retreated, which eased inflation expectations. Also, Thursday’s reports showing Q1 nonfarm productivity was better than expected, and Q1 labor costs were weaker than expected, were supportive of T-notes.
European government bond yields finished higher on Thursday. The 10-year German Bund yield rebounded from a 2-week low of 2.957% and finished up +0.3 bp to 3.003%. The 10-year UK gilt yield rebounded from a 2-week low of 4.886% and finished up +0.8 bp to 4.948%.
Eurozone Mar retail sales fell -0.1% m/m, a smaller decline than expectations of -0.3% m/m.
German Mar factory orders rose +5.0% m/m, stronger than expectations of +1.0% m/m.
Swaps are discounting an 80% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
ARM Holdings Plc (ARM) closed down more than -10% to lead chipmakers and AI-infrastructure stocks lower after reporting Q4 royalty revenue of $671 million, below the consensus of $693.3 million. Also, Marvell Technology (MRVL) closed down more than -7%, and Sandisk (SNDK), Applied Materials (AMAT), and NXP Semiconductors NV (NXPI) closed down more than -4%. In addition, Advanced Micro Devices (AMD), Lam Research (LRCX), Western Digital (WDC), Broadcom (AVGO), and Intel (INTC) closed down more than -3%. Finally, KLA Corp (KLAC), Micron Technology (MU), and Seagate Technology Holdings Plc (STX) closed down more than -2%.
Datadog (DDOG) closed up more than +31% to lead software stocks higher and gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $1.01 billion, better than the consensus of $957.8 million, and raising its full-year revenue estimate to $4.30 billion to $4.34 billion from a previous estimate of $4.06 billion to $4.10 billion, well above the consensus of $4.09 billion. Also, Workday (WDAY) closed up more than +6%, and ServiceNow (NOW) closed up more than +5%. In addition, Atlassian (TEAM) and Intuit (INTU) closed up more than +4%, and Autodesk (ADSK) closed up by more than +3%. In addition, Salesforce (CRM) closed up more than +2% to lead gainers in the Dow Jones industrials, and Adobe (ADBE) closed up more than +2%.
Fortinet (FTNT) closed up more than +20% to lead cybersecurity stocks higher after reporting Q1 billings of $2.09 billion, well above the consensus of $1.82 billion, and raising its full-year billings forecast to $8.80 billion to $9.10 billion from a previous forecast of $8.40 billion to $8.60 billion, stronger than the consensus of $8.49 billion. Also, Zscaler (ZS) closed up more than +10%, and CrowdStrike Holdings (CRWD) closed up more than +8%. In addition, Palo Alto Networks (PANW) closed up +7%, Okta (OKTA) closed up more than +4%, and Cloudflare (NET) closed up more than +3%.
Insmed (INSM) is down more than -23% to lead losers in the Nasdaq 100 after forecasting full-year product revenue of $1.0 billion, below the consensus of $1.3 billion.
Zoetis (ZTS) is down more than -21% to lead losers in the S&P 500 after reporting Q1 revenue of $2.26 billion, weaker than the consensus of $2.30 billion.
Whirlpool (WHR) closed down more than -11% after reporting Q1 net sales of $3.27 billion, weaker than the consensus of $3.42 billion, and cutting its full-year revenue forecast to $15.0 billion from a previous forecast of $15.3-$15.6 billion, below the consensus of $15.21 billion.
Coherent Corp (COHR) closed down more than -7% after reporting a Q3 adjusted EPS of $1.41, right on expectations.
US Foods Holding (USFD) closed down more than -5% after reporting Q1 net sales of $9.61 billion, below the consensus of $9.66 billion.
Axon Enterprises (AXON) closed up more than +10% after reporting Q1 net sales of $807 million, above the consensus of $779.2 million.
Ormat Technologies (ORA) closed up more than +6% after reporting Q1 adjusted EPS of $1.30, stronger than the consensus of 92 cents.
Howmet Aerospace (HWM) closed up more than +6% after reporting Q1 adjusted EPS of $1.22, above the consensus of $1.11, and raising its full-year adjusted EPS forecast to $4.88-$5.00 from a previous forecast of $4.35-$4.55, stronger than the consensus of $4.63.
AppLovin (APP) closed up more than +6% after reporting Q1 revenue of $1.84 billion, better than the consensus of $1.77 billion, and forecasting Q2 revenue of $1.92 billion to $1.95 billion, stronger than the consensus of $1.89 billion.
Albemarle (ALB) closed up more than +2% after reporting Q1 net sales of $1.43 billion, above the consensus of $1.34 billion.
MKS Inc. (MKSI) closed up more than +2% after reporting Q1 net revenue of $1.08 billion, better than the consensus of $1.04 billion.
Earnings Reports(5/8/2026)
Anglogold Ashanti Plc (AU), Brookfield Asset Management Ltd (BAM), EchoStar Corp (SATS), Fidelity National Information (FIS), Janus Henderson Group PLC (JHG), Madison Square Garden Sports Corp (MSGS), Oshkosh Corp (OSK), PPL Corp (PPL), QXO Inc (QXO), Starwood Property Trust Inc (STWD), Trump Media & Technology Group (DJT), Ubiquiti Inc (UI), Wendy's Co/The (WEN). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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Stocks Fall on Doubts About an Imminent US-Iran Peace DealMay 7, 2026
The S&P 500 Index ($SPX) (SPY) on Thursday closed down -0.38%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.63%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.12%. June E-mini S&P futures (ESM26) fell -0.42%, and June E-mini Nasdaq futures (NQM26) fell -0.18%.
Stock indexes gave up early gains on Thursday and settled lower amid doubts about an imminent US-Iran peace deal. Stocks retreated as crude oil prices recovered from sharp losses and pushed bond yields higher on a report that said the Trump administration is looking to restart its plan to guide stranded ships through the Strait of Hormuz after pausing it earlier this week.
More News from Barchart
S&P 500 Reverses After Hitting Record High as Oil Prices Bounce Back 218,000 Reasons to Sell Tesla Stock in May Don’t Trust This Top-Heavy Stock Market, Hedge It. Here’s Your Roadmap. Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.
Stocks initially moved higher on Thursday, with the S&P 500 and Nasdaq 100 posting new all-time highs, and the Dow Jones Industrial Average posting a 2.75-month high. Better-than-expected corporate earnings results lifted stocks, powered by tech earnings and high expectations for artificial intelligence. Strength in software stocks boosted the broader market after Datadog surged by more than 30% on blowout earnings. However, chipmakers and AI-infrastructure stocks turned lower on Thursday afternoon and weighed on the overall market.
Stocks also found support from Thursday’s better-than-expected US economic news on weekly jobless claims, Q1 productivity and labor costs, construction spending, and consumer credit.
US weekly initial unemployment claims rose +10,000 to 200,00, showing a stronger labor market than expectations of 205,000. Weekly continuing claims unexpectedly fell -10,000 to a 2.25-year low of 1.766 million, showing a stronger labor market than expectations of an increase to 1.800 million.
US Q1 nonfarm productivity rose +0.8%, stronger than expectations of +0.6%. Q1 unit labor costs rose by +2.3%, weaker than expectations of +2.5%.
US Mar construction spending rose +0.6% m/m, stronger than expectations of +0.3% m/m.
US Mar consumer credit rose by +$24.855 billion, stronger than expectations of +$13.720 billion and the largest increase in 3.25 years.
Fed comments on Thursday were slightly hawkish and negative for stocks and bonds. Boston Fed President Susan Collins said interest rates should stay at current "mildly restrictive" levels, but “if the inflation trajectory looked like it was significantly moving in the wrong direction," policymakers would "need to reassess what the appropriate policy would be." Also, Cleveland Fed President Beth Hammack said the FOMC's signal that the next rate move will be a cut is misleading, and her baseline is that interest rates will be on hold for a long period.
Story Continues
The markets are awaiting further updates after the US presented a proposal to Iran that would gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports. Negotiations over Iran's nuclear program would come later in the process. Iran is expected to respond via Pakistan in the next few days.
WTI crude oil prices (CLM26) recovered from a -4% decline on Thursday and settled little changed. Crude prices found support on a report that said the US is looking to restart military operations as soon as next week to guide commercial ships with naval and air support through the Strait of Hormuz. The Wall Street Journal reported that Saudi Arabia and Kuwait have lifted restrictions on the US military's use of their bases and airspace when Iran launched missiles and drones at the UAE in response to the US effort to open the strait. Saudi Arabia and Kuwait had blocked the US military's use of their bases and airspace after senior US officials downplayed Iranian attacks on the Persian Gulf in reaction to opening the strait. The strait remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 4% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings results thus far in this reporting season have been supportive of stocks. As of Thursday, 84% of the 425 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 fell from a 2.5-week high and closed down -0.90%. China's Shanghai Composite rallied to a 2-month high and closed up +0.08%. Japan's Nikkei Stock Average soared to a record high, finishing sharply higher by +5.58%.
Interest Rates
June 10-year T-notes (ZNM6) on Thursday closed down -9 ticks. The 10-year T-note yield rose +4.0 bp to 4.389%. Jun T-notes fell from a 1-week high on Thursday and settled lower, and the 10-year T-note yield recovered from a 1.5-week low of 4.319% and moved higher. T-notes fell as crude oil prices rebounded following a report that the US is seeking to resume military operations to open the Strait of Hormuz. Also, Thursday’s better-than-expected US economic news on weekly jobless claims shows strength in the US labor market, which is a hawkish factor for Fed policy. In addition, hawkish Fed comments today weighed on T-note prices after Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack said they favored keeping interest rates on hold.
T-notes initially moved higher on Thursday after crude oil prices retreated, which eased inflation expectations. Also, Thursday’s reports showing Q1 nonfarm productivity was better than expected, and Q1 labor costs were weaker than expected, were supportive of T-notes.
European government bond yields finished higher on Thursday. The 10-year German Bund yield rebounded from a 2-week low of 2.957% and finished up +0.3 bp to 3.003%. The 10-year UK gilt yield rebounded from a 2-week low of 4.886% and finished up +0.8 bp to 4.948%.
Eurozone Mar retail sales fell -0.1% m/m, a smaller decline than expectations of -0.3% m/m.
German Mar factory orders rose +5.0% m/m, stronger than expectations of +1.0% m/m.
Swaps are discounting an 80% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
ARM Holdings Plc (ARM) closed down more than -10% to lead chipmakers and AI-infrastructure stocks lower after reporting Q4 royalty revenue of $671 million, below the consensus of $693.3 million. Also, Marvell Technology (MRVL) closed down more than -7%, and Sandisk (SNDK), Applied Materials (AMAT), and NXP Semiconductors NV (NXPI) closed down more than -4%. In addition, Advanced Micro Devices (AMD), Lam Research (LRCX), Western Digital (WDC), Broadcom (AVGO), and Intel (INTC) closed down more than -3%. Finally, KLA Corp (KLAC), Micron Technology (MU), and Seagate Technology Holdings Plc (STX) closed down more than -2%.
Datadog (DDOG) closed up more than +31% to lead software stocks higher and gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $1.01 billion, better than the consensus of $957.8 million, and raising its full-year revenue estimate to $4.30 billion to $4.34 billion from a previous estimate of $4.06 billion to $4.10 billion, well above the consensus of $4.09 billion. Also, Workday (WDAY) closed up more than +6%, and ServiceNow (NOW) closed up more than +5%. In addition, Atlassian (TEAM) and Intuit (INTU) closed up more than +4%, and Autodesk (ADSK) closed up by more than +3%. In addition, Salesforce (CRM) closed up more than +2% to lead gainers in the Dow Jones industrials, and Adobe (ADBE) closed up more than +2%.
Fortinet (FTNT) closed up more than +20% to lead cybersecurity stocks higher after reporting Q1 billings of $2.09 billion, well above the consensus of $1.82 billion, and raising its full-year billings forecast to $8.80 billion to $9.10 billion from a previous forecast of $8.40 billion to $8.60 billion, stronger than the consensus of $8.49 billion. Also, Zscaler (ZS) closed up more than +10%, and CrowdStrike Holdings (CRWD) closed up more than +8%. In addition, Palo Alto Networks (PANW) closed up +7%, Okta (OKTA) closed up more than +4%, and Cloudflare (NET) closed up more than +3%.
Insmed (INSM) is down more than -23% to lead losers in the Nasdaq 100 after forecasting full-year product revenue of $1.0 billion, below the consensus of $1.3 billion.
Zoetis (ZTS) is down more than -21% to lead losers in the S&P 500 after reporting Q1 revenue of $2.26 billion, weaker than the consensus of $2.30 billion.
Whirlpool (WHR) closed down more than -11% after reporting Q1 net sales of $3.27 billion, weaker than the consensus of $3.42 billion, and cutting its full-year revenue forecast to $15.0 billion from a previous forecast of $15.3-$15.6 billion, below the consensus of $15.21 billion.
Coherent Corp (COHR) closed down more than -7% after reporting a Q3 adjusted EPS of $1.41, right on expectations.
US Foods Holding (USFD) closed down more than -5% after reporting Q1 net sales of $9.61 billion, below the consensus of $9.66 billion.
Axon Enterprises (AXON) closed up more than +10% after reporting Q1 net sales of $807 million, above the consensus of $779.2 million.
Ormat Technologies (ORA) closed up more than +6% after reporting Q1 adjusted EPS of $1.30, stronger than the consensus of 92 cents.
Howmet Aerospace (HWM) closed up more than +6% after reporting Q1 adjusted EPS of $1.22, above the consensus of $1.11, and raising its full-year adjusted EPS forecast to $4.88-$5.00 from a previous forecast of $4.35-$4.55, stronger than the consensus of $4.63.
AppLovin (APP) closed up more than +6% after reporting Q1 revenue of $1.84 billion, better than the consensus of $1.77 billion, and forecasting Q2 revenue of $1.92 billion to $1.95 billion, stronger than the consensus of $1.89 billion.
Albemarle (ALB) closed up more than +2% after reporting Q1 net sales of $1.43 billion, above the consensus of $1.34 billion.
MKS Inc. (MKSI) closed up more than +2% after reporting Q1 net revenue of $1.08 billion, better than the consensus of $1.04 billion.
Earnings Reports(5/8/2026)
Anglogold Ashanti Plc (AU), Brookfield Asset Management Ltd (BAM), EchoStar Corp (SATS), Fidelity National Information (FIS), Janus Henderson Group PLC (JHG), Madison Square Garden Sports Corp (MSGS), Oshkosh Corp (OSK), PPL Corp (PPL), QXO Inc (QXO), Starwood Property Trust Inc (STWD), Trump Media & Technology Group (DJT), Ubiquiti Inc (UI), Wendy's Co/The (WEN).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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Albemarle (ALB) Q1 2026 Earnings TranscriptMay 7, 2026
Image source: The Motley Fool.
DATE
Thursday, May 7, 2026 at 8 a.m. ET
CALL PARTICIPANTS
Chairman and Chief Executive Officer — Jerry Masters President, Lithium — Eric Norris Chief Financial Officer — Neal Sheorey
Full Conference Call Transcript
Jerry Masters: Thank you, Meredith. I'm pleased to report that Albemarle's performance is off to a strong start for 2026. For the first quarter, we reported net sales of $1.4 billion, up 33% year-over-year. We also delivered adjusted EBITDA of $664 million, more than double the same period last year, reflecting higher pricing and volume in both Energy Storage and Specialties, as well as cost and productivity improvements. We continue to see strong end market demand, which I will discuss in greater detail as we get into the presentation. Our business is well positioned in resilient end markets. We are maintaining our outlook for strong lithium market growth led by energy storage demand, which is up 117% year-over-year.
We remain focused on the areas within our control and made progress during the quarter, enhancing operational excellence, focusing on cost and productivity discipline and driving cash generation to enable long-term volume and earnings growth. In the first quarter, following the successful sales of our Eurecat joint venture and the controlling stake in Ketjen, we repaid $1.3 billion of debt, further strengthening our balance sheet and reducing interest expense. As Neal will share shortly, we are raising our 2026 outlook for Specialties net sales between $1.3 billion and $1.5 billion and adjusted EBITDA outlook between $225 million and $275 million, reflecting higher pricing and volumes in our Specialties business.
Moreover, year-to-date, we've delivered $40 million in cost and productivity improvements and remain on track to hit our full year target of $100 million to $150 million. We're able to maintain our corporate outlook scenarios as these improvements offset supply chain disruptions. Now I'll turn it over to Neal to discuss recent results and outlook. I will then cover recent market trends and growth projects before we open the call for Q&A.
Neal Sheorey: Thank you, Kent, and good morning, everyone. I will begin with first quarter performance on Slide 5. First quarter net sales were $1.4 billion, up 33% year-over-year, driven by higher volumes and pricing in both segments. Energy Storage pricing increased 51%. Volumes for Energy Storage and Specialties were up 14% and 7%, respectively. Adjusted EBITDA for the quarter was $664 million, up $397 million year-over-year, reflecting higher volumes and price as well as ongoing cost and productivity improvements in both segments. Both segments also saw strong adjusted EBITDA growth with Energy Storage up 196% and Specialties up 30%.
Story Continues
Our adjusted EBITDA margin increased by more than 20 percentage points compared to the prior year quarter due to higher pricing and our continued focus on cost and productivity improvements. We reported diluted earnings of $2.34 per share. Turning to Slide 6. I'll go over the key drivers of our year-over-year EBITDA performance. Q1 adjusted EBITDA increased by 148%, primarily due to higher pricing and volume in both Energy Storage and Specialties segments. In addition, cost of goods sold benefited year-over-year from cost and productivity improvements in both segments. By segment, Specialties EBITDA increased 30% year-over-year due to higher pricing and favorable product mix. Energy Storage EBITDA increased 196%, driven by higher lithium market pricing and increased volumes.
Both segments' results were bolstered by cost and productivity improvements as well. The corporate EBITDA change reflects favorable foreign exchange impacts and the fully consolidated results of Ketjen prior to the divestiture. Turning to Slide 7 and our outlook. As usual, we provide total company outlook considerations based on recently observed lithium market pricing scenarios. We are maintaining our total company outlook for 2026 across all 3 price scenarios despite global supply chain disruptions related to the Middle East.
We estimate that the unmitigated full year cost impact of these supply chain disruptions would be approximately $70 million to $90 million, and expect it to be offset by the following: Reduced interest expense following our debt reduction actions in Q1, and stronger-than-expected pricing and volumes in the Specialties business, which gives us the confidence to increase our full year Specialties outlook, which I will cover on Slide 8. The Specialties segment had a stronger-than-expected quarter. Net sales increased 12% year-over-year and adjusted EBITDA increased 30%, primarily due to higher pricing, favorable product mix and cost and productivity improvements. For the second quarter, we expect net sales to increase sequentially due to higher pricing for bromine specialties.
EBITDA is also expected to increase modestly as favorable price and volume mix are partially offset by higher costs due to supply chain disruptions. Additionally, operations at the Jordan Bromine Company joint venture have fully recovered from the flooding event in late December 2025, and continue to operate despite geopolitical tensions and disruptions in the region. Looking ahead and taking all these factors into consideration, we are increasing the range of our full year outlook considerations for the Specialties segment. We are raising our guidance for net sales to $1.3 billion to $1.5 billion, and for adjusted EBITDA to $225 million to $275 million, and we now expect EBITDA margin in the high teens.
While outlooks for end markets such as petrochemicals and oil and gas remain volatile due to geopolitical tensions, this increase in outlook reflects bromine price and volume opportunities that we see, coupled with our strong operational execution and the success of our cost and productivity improvements. Moving to Energy Storage on Slide 9. First quarter sales volumes were 53,000 tons lithium carbonate equivalent, or LCE, with an average realized price of approximately $17 per kilogram. The gap between our average realized price and market price is primarily driven by 2 factors: the 1 quarter pricing lag in our long-term contracts and sales of spodumene, which dilute our realized price on an LCE basis.
First quarter net sales increased 70% year-over-year due to higher pricing and volumes. Adjusted EBITDA nearly tripled, supported by the same price and volume factors as well as the timing of consumption of spodumene inventories. For the second quarter, net sales and EBITDA are expected to be up sequentially, assuming flat lithium market pricing due to increased volumes and pricing lags in our long-term contracts. EBITDA margin is expected to decrease sequentially due to the timing of spodumene inventory consumption and higher costs due to supply chain disruptions related to the Middle East.
On a full year basis, we are maintaining our Energy Storage outlook scenario ranges even after including the impacts of cost increases due to geopolitical tensions in the Middle East. Our volume guidance also remains unchanged. Turning to Slide 10. We continue to be successful in driving productivity improvements and converting earnings to cash. We are on track to deliver our full year 2026 cost and productivity improvements of $100 million to $150 million. Year-to-date, we have achieved $40 million in savings, primarily related to manufacturing and supply chain, including debottlenecking projects such as increasing spodumene utilization at our lithium conversion facilities in China and ramping new assets to their full production capability.
We generated $346 million of operating cash flow and $248 million of free cash flow in the first quarter. Capital expenditures were $99 million in the quarter. We continue to expect full year CapEx of $550 million to $600 million. At the $20 per kilogram lithium price scenario, full year operating cash flow conversion is expected to be within our long-term target range of 60% to 70%. As previously noted, there are select headwinds to our cash metrics this year, including recognizing deferred revenue related to the customer prepayment we entered in 2025, which will benefit EBITDA, but not contribute cash, and cash costs related to idling Kemerton Train 1, of which approximately $25 million occurred in the first quarter.
Turning to Slide 11. We took advantage of our successful cash and portfolio management actions to pay down debt and further strengthen our balance sheet and financial flexibility. During the quarter, we repaid $1.3 billion of debt, reducing our weighted average interest rate to about 3.1% and lowering our annual interest expense by approximately $60 million. We ended the first quarter with a net debt-to-EBITDA leverage ratio of 1x. And from a debt profile standpoint, we have no major maturities due until late 2028. Together, these factors offer us substantial flexibility and resilience to navigate the current environment. I will now turn the call back over to Kent to detail our market outlook.
Jerry Masters: Thanks, Neal. Turning to Slide 12. Before we dive into the details of the lithium markets, I wanted to take a moment to look at the company more holistically. Our overall portfolio is well positioned in resilient end markets, and that gives us confidence in the long-term outlook for our business, even with the current geopolitical uncertainties. As a market leader with globally diverse operations, we can pivot to meet dynamic market needs. More than half of our net sales are in new energy end markets like electric vehicles and energy storage with strong secular growth trends. Both Energy Storage and the Specialties segment benefit from these trends.
Our Specialties segment end markets are diverse, including electronics, semiconductors, building and construction, and energy. AI demand strength continues to drive strong electronics demand, particularly in Asia and the Americas. Building and construction demand continues in line with our forecasts. While less than 5% of our net sales are in oil and gas markets, we anticipate near-term demand growth as investments shift away from the Middle East towards other regional markets. Now turning to Slide 13. Global lithium demand is tracking in line with our forecast. So far this year, lithium consumption is up 37%, towards the upper range of our 2026 forecast of 15% to 40%. We are holding our outlook steady due in part to geopolitical uncertainties.
That said, our early estimates suggest that lithium demand will be relatively resilient to the situation in the Middle East. For example, demand could be slightly up due to greater emphasis on energy storage or electric vehicles, or slightly down due to broader supply chain disruptions. Either of these scenarios falls within our 2026 forecast range. Importantly, lithium demand continues to diversify with 2 key end markets, energy storage and electric vehicles. Now turning to Slide 14. Strong growth in the energy storage sector more than compensated for weak EV sales volumes during the first quarter.
In China, seasonal weakness during the Lunar New Year and prebuying in December ahead of subsidy changes led to reduced EV sales in the first quarter. 2026 Chinese subsidies have shifted support to premium vehicle segments in Q1 leading to a 20% increase in average Chinese battery size and increased demand for lithium hydroxide. Due to the increased average battery size, global EV sales were up 3% year-over-year on a gigawatt hour basis despite a 6% drop in unit sales. In the United States, EV sales were lower year-over-year, largely attributed to reduced incentives. However, I'll note that the U.S. market now represents less than 10% of the global EV market.
Developing markets in other regions such as Brazil, India and Australia have collectively grown 74% year-over-year as EV penetration continues to diversify globally. European EV sales continue to show robust growth as well, driven by greater policy support, particularly in Germany, France and the U.K. Overall, we remain on track to hit our 5-year CAGR for energy storage volume growth of 15%. We achieved 25% CAGR over the first 3 years and expect to deliver moderate growth over 2026 and 2027 as our large projects complete their ramp. It's important to note that completing this phase of growth requires little to no additional CapEx.
Our scaled, low-cost, world-class resources are performing well today with capital-efficient brownfield opportunities to fuel future growth. Turning to our joint ventures on Slide 16. Operations at both Wodgina and Greenbushes are operating well and in line with our expectations. At Wodgina, we have a clear line of sight to operate all 3 trains at full capacity. Ore quality is expected to drop slightly over the next 2 quarters before improving in the December quarter as the Stage 3 pit deepens and availability of higher quality ore increases. Greenbushes is a world-class asset, and we are confident in the path forward and strategic direction. The CGP3 investment there is operational and ramping as planned.
Our team is working closely with Talison's management team on value optimization studies to unlock the additional value as part of a multiyear transformation. As a result of these studies, the team has identified productivity improvements, including lower waste movements and a smaller truck fleet operating at higher utilization, helping to reduce the impact of fuel price increases. To date, neither operation has been disrupted by global fuel supply interruptions, with good visibility of ongoing supply. Having access to both of these high-quality hard rock resources plus our low-cost brine position at the Salar de Atacama positions Albemarle well for global growth.
Slide 17 shows our progress as our longer-term projects at the Salar de Atacama in Chile and Kings Mountain in the United States. At the Salar de Atacama, we have initiated the environmental permitting process for a commercial DLE project. While the permit evaluates up to 6 trains of DLE, I want to stress that these investments would be phased in a prudent manner, contingent on approvals and investment decisions. Our pilot plant at La Negra has now operated for over a year and has achieved quality and recovery targets, including greater than 94% lithium recovery.
We are evaluating numerous adsorbents and membranes, including proprietary and third-party technologies, and we've been able to incorporate findings from the pilot operation into our early engineering for the commercial plant. At Kings Mountain, we are currently obtaining the required permits and conducting comprehensive economic and environmental predevelopment evaluations prior to making a final investment decision. The project recently received federal mining permits, a meaningful milestone, and we continue to engage with local and state entities to obtain their respective approvals. As we continue drilling and engineering work, the more we learn about Kings Mountain, the more confident we are in the long-term strategic value of this asset. We look forward to sharing our progress as there are further developments.
To summarize, we're off to a strong start in 2026 as we continue to demonstrate operational excellence and capitalize on the secular growth opportunities supported by our end markets across mobility, energy, connectivity and health, including the global need for long-term energy security. We are continuing to take disciplined actions to enhance our long-term competitive advantage and leveraging our strengths, including our world-class resources, expertise and innovation to position us for sustainable growth and value creation over the long term. With that, I'll turn it over to the operator to take your questions.
Operator:[Operator Instructions] Our first question comes from David Begleiter with Deutsche Bank.
David Begleiter: Kent, have you seen any -- at this higher level of lithium pricing, have you seen any change in buyer behavior either getting ahead of or whatever else to deal with the higher pricing in the lithium market?
Jerry Masters: Thanks, David. So I don't know that we've seen a real change in behavior. I mean, it is evolving. So we have to -- it's only been a few months, right, since price has changed. And I wouldn't say we've seen a change. The conversations may be a little different. Eric is a little closer to it. So maybe you can comment.
Eric Norris: Yes. David, I would say that -- I'd substantiate what Kent said. It's fairly new. Most of the growth has been on the ESS side, as we described in the call here. There's a lot of interest in the sort of the carbonate supply chain. That contrasts with EVs outside of China, which are a little weaker on the hydroxide side in terms of sentiment. All in all, though, we've got a pipeline of customers who are very interested in talking with us about certainly spot bids, but also contracts, and we're being very cautious as we look at that in terms of how we think about where we want to take that contract mix over time.
David Begleiter: Very good. And just on the DLE opportunity in Chile, any early thoughts on potential cost improvements or benefits from this route versus your traditional solar evaporation route?
Jerry Masters: Yes. So it's more about being able to access more lithium in the Salar at the cost position we're at rather than trying to do -- it's not really a cost improvement program, it's about being able to access more lithium in the Salar under kind of the environmental conditions there.
Operator: Our next question comes from Patrick Cunningham with Citi.
Patrick Cunningham: Kent, you seem to hint the broader deployment of renewables as a result of the crisis could be a potential positive for lithium demand. I guess, is that anything that you've seen already? And how would you expect the market to respond to higher embedded risk premium in oil, concerns around energy security?
Jerry Masters: Yes. So there's a lot there, and it's difficult to see that in the market. I mean, we think that may have an impact on both EVs, but also Energy Storage segment, as we're calling that now. It's difficult to see. But I would say energy security and grid resiliency is probably one of the bigger drivers around that. I'm not sure that's about the Middle East crisis, but it's clear that's a big driver around the world.
Patrick Cunningham: Got it. And then just on Greenbushes, I think one of your JV partners noted some issues around grade recoveries and production stability, maybe even suggesting that they're more systemic. I guess, is this in line with your assessment? And how does it affect the ramp-up at Greenbushes?
Jerry Masters: So look, Greenbushes is operating in line with our expectations and the outlook considerations that we put forward. So every year, we look at all of our assets, and we make a risk-adjusted forecast around that, and we're fully in line with that. And the ramp of CGP3, so we started that up at the end of the year, and we expect it to ramp through this year. And I would say that ramp is on schedule. So it's fully in line with our expectations and our plan.
Operator: Our next question comes from Mike Sison with Wells Fargo.
Abigail Eberts: This is Abigail on for Mike. So as you look further ahead to your brownfield projects, what are the hurdle rates for these? Is there any scenario which any of these don't happen? And then how much capacity do you think these would add beyond 2027?
Jerry Masters: So look, we look at it as -- so we are now kind of ramping investments that we've made that gets us through that profile that we showed you there. So it slows down a little bit of growth into '27. That's ramping the kind of bigger investments that we've made over time. The next phase would be those brownfield investments, and we think that gets us somewhere in the high single-digit growth rate maybe for that period of time. And those are at existing assets. So that would be, for example, Greenbushes, Wodgina, and at the Salar de Atacama.
And we think of over time, after that, we think there are more significant investments we could make on resources that we own, Kings Mountain, for example, and then further trains at the Salar de Atacama. So we have a pretty good line of sight for growth. But the first tranche of that would be those brownfields. The returns would be -- I mean, it's hard to say what the -- we would look for hurdle rates. It would be traditionally the way we look at that, and we'll make those decisions at the time depending on how we see the market growth, pricing, what the costs look like from those assets.
Abigail Eberts: Okay. Got it. And then for the 2026, 2027 projects, you're talking about requiring minimal additional CapEx. Can you just give us a feel for size there? Any color you can give would be helpful.
Jerry Masters: Yes. Well, I think for '26 and '27, it's really just ramping up the projects that we've built and done. Probably the most significant one there would be the full ramp of Greenbushes, CGP3, and then getting Wodgina operating on 3 full trains. We're operating 3 trains today, but we anticipate working through a more difficult part of the mine. So the quality of the resource is not as good. We expect that to improve in the fourth quarter. That's the thinking around that.
And that's kind of where those incremental volumes come from, plus just the normal productivity things that we do with better recoveries, Salar yield at Salar de Atacama, for example, the project we've invested in, and we're still working to get more and more out of that.
Operator: Our next question comes from Josh Spector with UBS.
Christopher Perrella: It's Chris Perrella on for Josh. Can you unpack the puts and takes to the 1Q energy storage margin? Given the $20 a kilogram spot price you guys experienced in the first quarter, I would have thought margins would be closer to 50%. So just kind of why were they so much better?
Neal Sheorey: Yes. Chris, this is Neal. Sure, I can take that. Really, the main driver of that is the traditional lag that we see in spodumene costs and how we consume spodumene through our supply chain. So really, there was a small uplift in margin because essentially, we're consuming spodumene that we purchased from our mines in the fourth quarter, which was obviously a lower price than what you saw in the first quarter. But it's minimal. I think you see that our full year outlook, if you assume kind of flat pricing across the year, we've guided to Energy Storage potentially being in that mid-50% range.
So there was a little bit of an uplift in the first quarter due to that. But obviously, that will start to normalize as we go through the year, assuming pricing stays consistent for the rest of the year. And that's why we gave you guidance that we expect margins to come in a little bit in the second quarter as, all things being equal, assuming that, that normalizes.
Christopher Perrella: All right. And then just as a follow-up there, the Specialties outlook, you did $75 million, $76 million in the first quarter EBITDA, higher in the second quarter. What's causing that to drop off in your outlook in the back half of the year?
Neal Sheorey: Yes, I can start with that, Chris, again. It is really, at this point, just the uncertainty that Kent mentioned in the opening remarks. Right now, the visibility that we have is at least through the middle of the year, and we are driving some price and volume initiatives that give us that confidence around the second quarter. I think we'll continue to give you updates as we go through the year. There's obviously a lot of uncertainty around the world, of course, stemming from the situation in the Middle East, and we're just watching that very closely.
Operator: Our next question comes from Vincent Andrews with Morgan Stanley.
Vincent Andrews: Just wanted to follow up a bit on the brownfield opportunity and just color a few things in. Kent, were you saying that these assets could potentially start up as early as 2028, or would the timeline on that be a bit longer? If you could just help us understand what the lead time would be?
Jerry Masters: Yes. So well, none of the projects are finalized. So there are opportunities now. So I'm not sure we even call them projects. But there are things that we've talked about and discussed over time and we'll bring those on when we think it's the right time, right? And obviously, a couple of those are with our joint venture projects, so we need to align with our joint venture partners as well. So somewhere in that -- it's definitely clearly after '27, in that time frame, but we think that is the next leg of growth for us in that phase. And we say that because the bigger investments and bigger projects like Kings Mountain would be after that, right?
So it fills the gap in between those two.
Vincent Andrews: Okay. And Neal, can I just ask you, on Slide 10, you talk about it, at $20/kg, the free cash flow or the operating cash flow conversion would be 60% to 70%. As prices ramp higher than that, how much of that drops down to cash flow versus how much would go up to working capital? So would we stick with the 60% to 70% range? Would it be higher than that? Would it be in the lower end of the range? How should we think about it?
Neal Sheorey: Yes, Vince, look, I think it, of course, always matters in the shape of how that pricing moves up. If it's a very sudden move up in pricing, particularly if it's towards the end of the year, then I would expect that our cash conversion will compress in the immediate just because of how sharply the working capital runs up and how quickly we can get that back in terms of cash. If it's a little bit more gradual, look, I still think that 60% to 70%, when we've done our benchmarking and our modeling, that seems to be the right place for us to be from a steady-state perspective.
So if it is a little bit more of a ratable kind of movement up, I would expect us to be able to still be in that range.
Operator: Our next question comes from Arun Viswanathan with RBC Capital Markets.
Arun Viswanathan: Congrats on the strong results. And apologies if this was asked earlier, but did you discuss the reduction of output at Greenbushes? It looks like it's about 10% to 15%, and how that affects kind of your own operations?
Jerry Masters: Okay. So we had said that in an earlier question. So Greenbushes is operating in line with the plan that we have, right? And as we look at that every year, we build our plans, we look at all of our resource assets and we risk adjust those. And so what we've built in our plan for Greenbushes this year, the mine is operating to those plans, including the ramp of CGP3. So we're on our plan for the ramp of CGP3. And we started that project, first ore at the end of '25, and we felt like we could ramp it throughout the year.
And then it's a schedule according to that ramp, but we should be at full capacity by the end, and we think we're on that schedule.
Arun Viswanathan: Okay. And then you noted that ESS demand could be a little bit stronger, I guess, and we did notice kind of stronger EV demand also in the last month versus the first few months of the year. So are you seeing demand improvement? And obviously, I think you're still guiding to about flattish volumes. So is there any way you can address that upside on demand, if there is any? Or would that be unlikely this year and potentially likely next year? How should we think about your opportunities to capture some of that extra demand, if there is any?
Jerry Masters: Yes. Eric can talk about maybe a little bit more detail. But I would just say, look, the market is growing, it is strong, but we're working through the seasonality, right? The early part of the year is always difficult to figure out what exactly is going to happen with the Lunar New Year, China is such a big market. That has a big impact, and we're off of that now. Demand is strong, but I'm not sure we're ready to kind of say it's at a different level.
Eric Norris: Yes. So this is just to add, on a demand basis, our customers, the battery companies around the world, particularly in Asia, who produce for this market, their order books are full from now through the beginning of '27. So demand is very strong in Energy Storage, driven by the factors of grid reliability, renewables in various parts of the world, as well as AI and behind-the-meter storage. So there's very favorable trends that are driving that kind of an outlook.
Neal Sheorey: And Arun, this is Neal. I think you had asked about our demand forecast -- sorry, our volume growth forecast for this year, which is flat with last year. Look, underneath that volume forecast was an assumption, as Kent highlighted, about how we see our resources ramping through the year. That's one part CGP3 and the other one being the improvements that are getting driven at Wodgina. Everything is going according to our plan, which is why we're still holding on to that volume outlook. But obviously, as we go through the year, if we start to see upside, we'll continue to give you updates.
I think our volume growth potential this year, in particular, is really driven by how well those resources continue to move in their capacity expansion.
Jerry Masters: Yes, it's about availability of product from our perspective rather than market. Market is pretty strong.
Operator: Our next question comes from Laurence Alexander with Jefferies.
Laurence Alexander: Two questions. First, can you talk a little bit about whether there's any advantages or disadvantages for you if the LFP producers need to switch to yellow phosphorus to reduce their sulfur consumption, and also how higher sulfur prices are affecting your economics versus your peers? And then secondly, just longer term, if you do undertake something like Kings Mountain, what would you see as like the desirable range for your balance sheet? And what balance sheet metrics would you use as boundary conditions?
Jerry Masters: Okay. So maybe, Eric, you can talk about the LFP chemistries a little bit, because...
Eric Norris: Yes. So you might have to expand a little bit on your question, Laurence. Let me answer the part of it that is clear to me and I think is important to understand. We talked in the call about raw material costs rising $70 million to $90 million across the enterprise, and we have a variety of ways we're mitigating that. One of those drivers, a fairly big driver, is sulfuric acid. I don't think we are advantaged or disadvantaged versus anybody who buys sulfuric acid around the world, particularly in Asia, where a lot of the conversion activity happens for hard rock conversion. So that's a cost that's affecting supply.
In fact, frankly, any acid roast and leaching process is going to be impacted by that. Your first question was not clear to me, maybe you could restate it.
Laurence Alexander: So my understanding was that one way to offset the cost on sulfuric acid for the LFP producers is for them to switch to yellow phosphorus. And that if they did, I was curious as to whether there's any issues with the contaminant profiles of the lithium from different mines. Like I mean, my understanding is you have an advantage in terms of being able to reformulate your product. But maybe I'm just overthinking kind of the dynamics there.
Eric Norris: Well, I think one of the advantages of those LFP producers, the cathode producers who reside almost entirely in China that they have is their upstream capabilities to access phosphorus in various forms of it. I've had some discussions with some of these companies about how they do that. I understand any trade-offs are not impacting their ability to deliver quality. And that's, at the moment, the best I could say. If we learn more, we'll certainly share more.
Neal Sheorey: And then, Laurence, this is Neal. Maybe I can start with your question on Kings Mountain. Look, what I would say, as you can see as a company, because of the extreme volatility that we've seen over the last 5 years, we are obviously in a position of balance sheet strength. And we are on purpose taking a conservative stance right now just because of the volatility we've seen in general. But as we look at Kings Mountain, and I want to highlight, we're nowhere near a final investment decision.
Operator: Our next question comes from Joel Jackson with BMO Capital.
Joel Jackson: The first question is, you're talking about Q2 margins guidance or commentary as if spot prices hold Q1 levels. Our prices or market prices are actually higher in Q2 than Q1. So can you talk about that? I mean what quarter-over-quarter price increase would you need to hold Q1 margins? Or how would you frame it?
Jerry Masters: So I think -- let me start, Neal, and then you can talk a little bit more detail. But I mean, look, there is -- a portion of our volume is on contracts or about 40% on contracts, and there's a lag on that, right? There's typically a 3-month lag on how pricing moves through that. So that will move up slightly just as we go through the quarter if prices stay where they are. So we're not forecasting prices, but that's just a function of the way our contracts work. So it will move up, and that will impact margin as we move forward through the quarter.
Then it becomes more steady state as it will catch up as long as prices are flat.
Neal Sheorey: Yes. Just to add to that, look, if you hold everything flat, essentially to get to that higher margin that you're assuming, basically, from our $20 scenario to our $30 scenario, everything basically scales linearly. So to get to the higher margin, you have to make an assumption around just a higher price realization in the second quarter, all other things being equal. So it really comes down to pricing.
Joel Jackson: Okay. And Kent and team, if I circle back to the Greenbushes question, which is, I've heard your answer a couple of times now on what you're saying about Greenbushes being the plan. But one of your JV partners really went public the other week and talked about safety, and it was in the prepared remarks, and it was very aggressive in wanting to call out to the public what they feel should be happening or is happening at Greenbushes. It is a different commentary that you're giving today. Why do you think your JV partner is wanting to do that?
Is this just about negotiating how the mine plan should go forward, production, throughput, concentrate grades, and you have different interest being a customer of the spodumene as well? Like why do you think your partner is so aggressive in the market talking about safety and Greenbushes issues?
Jerry Masters: Yes. So I guess I would -- look, I'm not going to comment on their perspective of what they're doing. I would say they're our partner's partner, right? So as we go through that -- but we do have -- we're not happy with the safety position at the mine. We've had lots of conversations with the management team and our partners around that. We have a plan, and it's improving, and we're working toward that. Safety is not something that you move overnight. It's a long-term program. We feel that we're on the right track there. But the mine is operating to the plan that we thought they would during the year, and we don't see exceptions to that.
So the way we view it is that we are on plan. The CGP3 project started up last year, and it is ramping through the year, and we're on that ramp plan. So we don't see a variance in our plan, and I can't comment on what our partner is thinking when they talk publicly.
Operator: Our next question comes from Colin Rusch with Oppenheimer & Co.
Colin Rusch: As we look at some of the NDA compliance deadlines coming up at the start of 2028, I'm just curious about how you're planning to meet those and what we can think about from a CapEx perspective if there is any to meet some of those requirements?
Jerry Masters: I'm not sure I understand that question. Can you just say that again?
Colin Rusch: Yes, so NDA requirements for military batteries. We're looking at having to have entire supply chains in North America to meet some of those requirements. I'm just curious about your ability to meet those volumes and any CapEx plans that you have here over the next 2 years to be in line with them.
Jerry Masters: Okay. Look, that's a segment of the market that we would want to serve. We actually have probably the only lithium produced today in the United States comes from Silver Peak and processed at Kings Mountain. So that's the only kind of pure lithium processed in the U.S. today. We have that. It's a pretty small volume. It's not a big piece of the market, but we can serve that through other locations with allied countries like Chile as well. So I mean, it is an opportunity for us. And as we look going forward to make investments, obviously, Kings Mountain, the mine itself would be one of the opportunities to serve that particular volume.
Look, I would say we're not over-indexed on it. We think about the total market overall, but military applications in the U.S. is definitely an opportunity for us.
Colin Rusch: Great. And then as you look at the European demand for EVs and seeing that grow, is there any concern that there's new regulations coming out of Europe in terms of compliance around supply not being able to come from China for any of those OEMs or through the EU properly from a regulatory perspective?
Jerry Masters: Yes. Look, so there is a lot of conversation going now around critical minerals. And when we hear that, we think lithium, and around diverse supply chains, global supply chains, allied countries, that's going to move a lot over time. From our standpoint, we have a diverse portfolio, so around the world, so both brine and hard rock, but in a variety of different countries, and we think we'll be able to satisfy that one way or the other. So if it's tighter regulation, it just makes a different opportunity for us. If it's not as tight, we have our full portfolio to work with. So we see it as an opportunity, not a concern.
And then we have to wait and see exactly how it plays out.
Operator: Our next question comes from John Roberts with Mizuho.
John Ezekiel Roberts: I have just one. Assuming this year plays out according to plan, where do you think your debt level should be this time next year? What would be a targeted debt level?
Neal Sheorey: Yes, John, this is Neal. Look, I mean, I guess there's a lot of estimating and forecasting to get to that number. But look, if you -- I'm sure you're doing this math on your side, if you just take flat pricing from where we are today and just run that across the end of the year, we exited first quarter at 1x net debt-to-EBITDA. And you can imagine that at these kind of prices, we'll probably trend down from there below 1x.
So obviously, like I had said before, our stance right now is to be in a little bit more conservative balance sheet position and for all the volatility and uncertainty that we see in the world, and that's our posture for the year.
Jerry Masters: Yes. I would add to that. Look, we've brought ourselves through a tough period, and we clearly want to be a little more conservative as we go through that. We haven't worked out all the details around that, but we're trying to -- our overall goal, we're building a company that will be able to work through the cycle regardless of where it goes and that we would still be -- can be opportunistic at the bottom of the cycle. That's what we're trying to do. The balance sheet is definitely a part of that strategy.
Operator: Our next question comes from Kevin McCarthy with Vertical Research Partners.
Kevin McCarthy: I was wondering if you could speak to the quarterly cadence of your lithium sales volumes. You're guiding flat for the year. I think in the first quarter, you had 53 kilotons, which was up appreciably. It looks like your comps are a little tougher in the back half. So maybe you could speak to how you would foresee that flowing through in the second quarter and the balance of the year?
Neal Sheorey: Yes. Kevin, this is Neal. I'm very happy to start. So the first quarter is typically our softest quarter, of course, because of Chinese New Year and just general seasonality. You should expect volumes to pick up here in the second quarter and the third quarter. I would not expect our fourth quarter volumes to be as strong as they were last year, mainly because we had inventory reductions that we did at the end of the year, as we saw that kind of strength in demand come through in the fourth quarter. And so that's the reason why we've been guiding to this overall sort of flat volume year-over-year. It's exactly what you said.
We have tougher comps on a year-over-year basis as we go through the year. And so that's why you saw some volume growth here in the first quarter. That was the easiest of all the comps. Those will get tougher as we go through the year just because of the elevated sales volumes that we had last year.
Kevin McCarthy: Very good. And then I'm tempted to ask, does Albemarle have any visibility at all into whether your lithium molecules end up in an EV versus an energy storage system? And if you do have any visibility, do you care? In other words, is there any strategic or commercial effort to influence your mix in one direction or the other? How do you think about that?
Jerry Masters: So I mean we do see where it goes. I mean it's not 100% transparent, because a lot of times it's the same customers, but we have those discussions. We know where they're going. We understand order books and one versus the other, because they have different profiles. So I think it is important that we understand that. We think we have pretty good visibility of it. It's not perfect, because it is the same customer base, but it relies on customer conversations and their transparency with us. But we feel like we have a pretty good handle on that. Eric, do you want to comment on that further?
Eric Norris: No, I think that's right. I think that's right. Clearly, someone buying carbonate for LFP production, that could go EV or ESS, but it comes down to the knowledge we have on the ground to be able to ascertain the difference. And to the second part of your question, it does matter in that we want to make sure we're close to understanding what's driving growth, so we can plan our own capacities and approaches to the market accordingly.
Operator: Our next question comes from Mazahir Mammadli from Rothschild.
Mazahir Mammadli: I just wanted to ask about the lithium market. So if we assume that the current market conditions persist, what kind of supply response would you expect over the coming year or so? And particularly, would you say that the current price is high enough for some of the unconventional supply that we saw in 2022, 2023 to come online?
Jerry Masters: So I guess, first, I would say, it takes time almost for anything to come back, right? So if you've idled capacity and you've kept it in the right shape, condition, you can bring it back in pretty short order. But if you really put it in care and maintenance, it's going to take some time. And when you talk about mines, you have to think about things like yellow equipment and all of that, which is not sitting on the shelf. And even brownfield mines, it's a couple of years. And if it's greenfield, it's further than that. And then some of the unconventional. I don't know that we're at prices where things get a little crazy.
I think also people learned a lesson in the last cycle about the nature of the market. I don't think we're going to see a massive supply adjustment to this, at least that's not how we're thinking about it at prices where we are now. If you think about a lot of the projects that were on the books and maybe even still happening, we're now getting to the point where their financial forecasts are in the market, so to speak. It's not that we've gone way above them, that we're just getting back to the numbers they were using to justify projects. So I don't think you see a huge supply response.
Mazahir Mammadli: And just a follow-up on the specialties business. So the bromine price in China, if you look at the current prices, almost as high as the peak in 2022. And in 2022, this segment generated EBITDA of over $0.5 billion. Is that a trajectory we should expect if the bromine price stays at this level? Or are there other moving parts that we should think about?
Jerry Masters: Yes. So there's a bit in there. So prices, they did peak. They've actually come off fairly quickly recently, but they were at a higher level, and we're below the performance level we were. But we recognize that we have some operational cost issues we need to address around that, and we're working on that. We've got projects around that. And I guess the other piece, and Eric can talk about this, but that bromine price you see, there's a small amount of our bromine that we sell on that basis. But it is the most visible index that you can see. So I understand why you watch it.
We watch it as well, and it's indicative in the market, but it's actually a very small part of our bromine that we sell on that index.
Eric Norris: Yes. Just to add to Kent's comment, this is Eric speaking. As you look at our overall Specialties sales, which, of course, includes lithium specialties and bromine specialties, it's 20% or less of our sales that are exposed to that kind of index, which is prevalent in China for upstream bromine. If you go around the world, regional markets behave differently. If you go down our value chain into derivatives, there you're going to get more of a specialty chemical type approach to pricing. So it does vary. And the pricing this year has been driven, we believe, by what has been a lot of anxiety at the beginning of the year around supply.
But we had our own issues at JBC, which we resolved quickly. You have the Middle East crisis, which has created anxiety. In the midst of that, we've been able to position ourselves as a very reliable and diversified global supplier. That's helped us on the one hand. But on the other, as the Chinese seasonal production comes on, that has led to some price easing in China, too. So this all comes back to the question on the second half of the year and our visibility that Neal answered the question on earlier. So this is why we're a little cautious, but those are the factors that have contributed to what we're seeing right now in bromine.
Operator: Our next question comes from Rock Hoffman with Bank of America.
Rock Hoffman Blasko: I understand not wanting to take a view on near-term market pricing. But just with current Chinese spot near $27/kg, is there upside to that $20/kg market scenario guide if pricing stays at current levels? And maybe just on the other side of the market balance equation, how would you assess any near-term supply shocks either in Zimbabwe, Jiangxi province or elsewhere?
Jerry Masters: Yes. So I guess -- I think the first one, if I understood the question, it's a pretty easy answer. If the Chinese price stays at $27, there's upside to our $20 forecast. I think the answer to that is yes. There's not a lot -- I don't think I'm taking a lot of risk in saying that. And the supply, I mean, what's happening, look, there's in and out moving. I think you're always going to have that in supply in the lithium when you're coming, there's African resources. Zimbabwe, we don't see that as a supply that comes off long term. I think that's a short-term issue, probably, call it, a negotiating position, if you will.
So it has taken some product off the market, but we see it coming back in months or quarters as part of that. The lepidolite in China is a little more difficult to call. Some of those have been offline, and offline for quite some time, almost going on a year for the CATL mine, I think we understand that to be more about permitting rather than operations, but then that still has to play out. I don't think we can answer that, but I don't think this is like an extraordinary thing. This is going to happen in the lithium world where supply comes in and out on a regular basis.
The market is big enough now to where 5 years ago, a mine coming off like Zimbabwe or a couple of mines would have been massive. The market is big enough now to where it influences, but it's not a huge supply shock.
Rock Hoffman Blasko: Understood. And just as a follow-up, any updated views on the 2 major contracts, which roll off at the end of this year? And more broadly, how should we think about potential shifts of that product mix from the current 60% spot, 40% contracted?
Jerry Masters: Yes. So we don't have anything to update on those. I mean -- and this is kind of business as usual as we've done these. We have conversations with our customers, and then we tend to adjust as we go through the year. But we have no update on those particular contracts at the moment. Eric, anything?
Eric Norris: No, business as usual, we continue to evaluate a path forward with those customers. We also have a pipeline of many others who are prospective contract customers, and we're evaluating the terms and whether those meet our objectives, and we'll update you when we have a better view of that towards the end of the year.
Jerry Masters: Yes. And we're always talking about contracts with our customers. And you can imagine the conversations are different today than they were a year ago just because of where the market is. But we continue to talk to them, and we don't have any updates on that, but we will provide them once we have some clarity.
Operator: Thank you. That's all the time we have for questions. I will now pass it back to Kent Masters for closing remarks.
Jerry Masters: Thank you, operator, and thank you, everyone, for joining us today. We've managed through a challenging period and actively positioned the company for future growth and resilience. As we look ahead, I'm deeply optimistic about our company's trajectory. Our team is dedicated to delivering operational excellence and sustainable growth, and our efforts are bearing fruit. Together, we will continue to leverage our competitive strengths and world-class resources and process chemistry expertise to capitalize on the opportunities created by the energy transition. I look forward to sharing more milestones and successes with you in the coming quarters. Thank you.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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S&P 500 Reverses After Hitting Record High as Oil Prices Bounce BackMay 7, 2026
The S&P 500 Index ($SPX) (SPY) today is down -0.40%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.51%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.28%.
Equity markets retreated this afternoon, erasing earlier gains as a resurgence in crude oil prices weighed on sentiment. While the international Brent benchmark saw a slight dip yet remained above $100, U.S. West Texas Intermediate futures surged past the $95-per-barrel mark.Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
US weekly initial unemployment claims rose +10,000 to 200,00, showing a stronger labor market than expectations of 205,000. Weekly continuing claims unexpectedly fell -10,000 to a 2.25-year low of 1.766 million, showing a stronger labor market than expectations of an increase to 1.800 million.
US Q1 nonfarm productivity rose +0.8%, stronger than expectations of +0.6%. Q1 unit labor costs rose +2.3%, weaker than expectations of +2.5%
Fed comments today were slightly hawkish and negative for stocks and bonds. Boston Fed President Susan Collins said interest rates should stay at current "mildly restrictive" levels, but “if the inflation trajectory looked like it was significantly moving in the wrong direction," policymakers would "need to reassess what the appropriate policy would be." Also, Cleveland Fed President Beth Hammack said the FOMC's signal that the next rate move will be a cut is misleading, and her baseline is that interest rates will be on hold for a long period.
The markets are awaiting further updates after the US presented a proposal to Iran that would gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports. Negotiations over Iran's nuclear program would come later in the process. Iran is expected to respond via Pakistan in the next few days.
The markets are discounting a 6% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings results thus far in this reporting season have been supportive of stocks. As of today, 84% of the 411 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets are mixed today. The Euro Stoxx 50 fell from a 2.5-week high and is down -0.57%. China's Shanghai Composite rallied to a 2-month high and closed up +0.08%. Japan's Nikkei Stock Average soared to a record high, finishing sharply higher by +5.58%.
Interest Rates
June 10-year T-notes (ZNM6) today are up by +4 ticks. The 10-year T-note yield is down -1.1 bp to 4.338%. Jun T-notes climbed to a 1-week high today, and the 10-year T-note yield fell to a 1.5-week low of 4.319%. T-notes have support today from weaker crude prices, which ease inflation expectations. The 10-year breakeven inflation rate fell to a 2-week low of 2.415% today. Also, today’s reports showing Q1 nonfarm productivity was better than expected, and Q1 labor costs were weaker than expected, were supportive of T-notes.
Gains in T-notes are limited due to today’s weekly jobless claims report, which showed strength in the US labor market, a hawkish factor for Fed policy. Also, hawkish Fed comments today weighed on T-note prices after Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack said they favored keeping interest rates on hold.
European government bond yields are moving lower today. The 10-year German Bund yield fell to a 2-week low of 2.957% and is down -1.5 bp to 2.985%. The 10-year UK gilt yield fell to a 2-week low of 4.886% and is down -2.8 bp to 4.912%.
Eurozone Mar retail sales fell -0.1% m/m, a smaller decline than expectations of -0.3% m/m.
German Mar factory orders rose +5.0% m/m, stronger than expectations of +1.0% m/m.
Swaps are discounting a 79% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
Datadog (DDOG) is up more than +30% to lead software stocks higher and gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $1.01 billion, better than the consensus of $957.8 million, and raising its full-year revenue estimate to $4.30 billion to $4.34 billion from a previous estimate of $4.06 billion to $4.10 billion, well above the consensus of $4.09 billion. Also, ServiceNow (NOW) and Workday (WDAY) are up more than +6%, and Atlassian (TEAM) and Intuit (INTU) are up more than +5%. In addition, Autodesk (ADSK) is up by more than +4%, and Salesforce (CRM) is up more than +3% to lead gainers in the Dow Jones industrials. Finally, Microsoft (MSFT), Oracle (ORCL), and Adobe (ADBE) are up more than +2%.
Fortinet (FTNT) is up more than +23% to lead cybersecurity stocks higher after reporting Q1 billings of $2.09 billion, well above the consensus of $1.82 billion, and raising its full-year billings forecast to $8.80 billion to $9.10 billion from a previous forecast of $8.40 billion to $8.60 billion, stronger than the consensus of $8.49 billion. Also, Zscaler (ZS) is up more than +9%, and Palo Alto Networks (PANW) and CrowdStrike Holdings (CRWD) are up more than +7%. In addition, and Okta (OKTA) is up more than +5%, and Cloudflare (NET) is up more than +3%.
Energy producers and service providers are moving lower today with WTI crude oil prices down more than -4%. APA Corp (APA) is down more than -6%, and Baker Hughes (BKR) is down more than -5%. Also, Devon Energy (DVN), Marathon Petroleum (MPC), and Diamondback Energy (FANG) are down more than -4%. In addition, SLB Ltd (SLB), Phillips 66 (PSX), ConocoPhillips (COP), Occidental Petroleum (OXY), Halliburton (HAL), and Valero Energy (VLO) are down more than -3%. Finally, Chevron (CVX) is down more than -2% to lead losers in the Dow Jones industrials, and Exxon Mobil (XOM) is also down more than -2%.
Axon Enterprises (AXON) is up more than +13% after reporting Q1 net sales of $807 million, above the consensus of $779.2 million.
Albemarle (ALB) is up more than +9% after reporting Q1 net sales of $1.43 billion, above the consensus of $1.34 billion.
Ormat Technologies (ORA) is up more than +9% after reporting Q1 adjusted EPS of $1.30, stronger than the consensus of 92 cents.
Howmet Aerospace (HWM) is up more than +8% after reporting Q1 adjusted EPS of $1.22, above the consensus of $1.11, and raising its full-year adjusted EPS forecast to $4.88-$5.00 from a previous forecast of $4.35-$4.55, stronger than the consensus of $4.63.
AppLovin (APP) is up more than +6% after reporting Q1 revenue of $1.84 billion, better than the consensus of $1.77 billion, and forecasting Q2 revenue of $1.92 billion to $1.95 billion, stronger than the consensus of $1.89 billion.
MKS Inc. (MKSI) is up more than +3% after reporting Q1 net revenue of $1.08 billion, better than the consensus of $1.04 billion.
Zoetis (ZTS) is down more than -21% to lead losers in the S&P 500 after reporting Q1 revenue of $2.26 billion, weaker than the consensus of $2.30 billion.
Insmed (INSM) is down more than -17% to lead losers in the Nasdaq 100 after forecasting full-year product revenue of $1.0 billion, below the consensus of $1.3 billion.
Whirlpool (WHR) is down more than -13% after reporting Q1 net sales of $3.27 billion, weaker than the consensus of $3.42 billion, and cutting its full-year revenue forecast to $15.0 billion from a previous forecast of $15.3-$15.6 billion, below the consensus of $15.21 billion.
ARM Holdings Plc (ARM) is down more than -7% after reporting Q4 royalty revenue of $671 million, below the consensus of $693.3 million.
Coherent Corp (COHR) is down more than -5% after reporting a Q3 adjusted EPS of $1.41, right on expectations.
US Foods Holding (USFD) is down more than -4% after reporting Q1 net sales of $9.61 billion, below the consensus of $9.66 billion.
Earnings Reports(5/7/2026)
Airbnb Inc (ABNB), Akamai Technologies Inc (AKAM), Becton Dickinson & Co (BDX), Block Inc (XYZ), Charles River Laboratories Int (CRL), Coinbase Global Inc (COIN), Consolidated Edison Inc (ED), Corpay Inc (CPAY), Datadog Inc (DDOG), EPAM Systems Inc (EPAM), Evergy Inc (EVRG), Expedia Group Inc (EXPE), Gen Digital Inc (GEN), Gilead Sciences Inc (GILD), Howmet Aerospace Inc (HWM), Kenvue Inc (KVUE), McDonald's Corp (MCD), McKesson Corp (MCK), Mettler-Toledo International Inc (MTD), Microchip Technology Inc (MCHP), Monster Beverage Corp (MNST), Motorola Solutions Inc (MSI), News Corp (NWSA), Republic Services Inc (RSG), Sempra (SRE), Tapestry Inc (TPR), Targa Resources Corp (TRGP), Trade Desk Inc/The (TTD), Viatris Inc (VTRS), Vistra Corp (VST), WW Grainger Inc (GWW), Wynn Resorts Ltd (WYNN), Zoetis Inc (ZTS).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
