Market Summary - Nasdaq and Software Sector Performance
Date: 28 May 2026
Nasdaq Climbs on Software Rebound
The Nasdaq index is experiencing a rebound driven by optimism surrounding a potential peace agreement between the U.S. and Iran, as reported by Axios. This optimism is further supported by strong macroeconomic data, which has eased inflation concerns. The month-on-month Personal Consumption Expenditures (PCE) index came in at 0.4%, slightly below the expected 0.5%, indicating solid underlying economic conditions.
Microsoft shares are rising following reports of new AI model launches, while the software sector is outperforming semiconductor stocks, which are facing pressure. Notable gainers in the software sector include ServiceNow, Oracle, and NetApp.
Despite the positive market sentiment, reports from Axios regarding the U.S.-Iran negotiations have been denied by Iranian officials, suggesting that the deal may not be finalized. However, the market has continued to rally, buoyed by decreasing concerns over rising oil prices and inflation.
The Nasdaq 100 futures contract has moved above 30,000 points, recovering from earlier losses. Key support levels are identified between 29,700 and 29,900 points, while resistance is noted near 30,400 points, close to all-time highs.
Snowflake Surges on Strong Earnings
Snowflake Inc. (SNOW.US) shares surged by 35% in premarket trading after the company reported strong quarterly earnings, exceeding Wall Street expectations. The company reported Q1 FY2027 revenue of $1.39 billion, a 33% year-over-year increase, and product revenue rose 34% to $1.33 billion. Earnings per share (EPS) came in at $0.39, surpassing the expected $0.32.
Snowflake also raised its guidance for Q2 product revenue to between $1.415 and $1.42 billion, exceeding market expectations. Additionally, the company announced a significant $6 billion partnership expansion with Amazon Web Services (AWS), which investors view as a strong indicator of future growth in AI-related workloads.
Management highlighted that AI is becoming a major growth driver, with a net revenue retention rate improving to 126%, indicating that existing customers are increasing their spending. The adoption of AI assistant products has more than doubled, suggesting a robust demand for AI-native software solutions.
Despite the positive outlook, some investors express caution regarding Snowflake's high valuation, trading at a price-to-sales multiple of around 17, which may limit future upside potential.
Salesforce Reports Solid Quarter Amid Caution
Salesforce (CRM.US) also reported results that exceeded expectations, with EPS of $3.88 and revenue of $11.13 billion, up 13% year-over-year. The company’s AI platform, Agentforce, saw annualized revenue surpassing $1 billion for the first time, growing 205% year-over-year.
However, Salesforce's full-year revenue guidance fell slightly below market expectations, reflecting weaker performance in certain segments and concerns over backlog metrics. The Remaining Performance Obligation (RPO) was reported at $67.9 billion, below the anticipated $68.6 billion.
Despite these concerns, Salesforce continues to invest heavily in AI and the integration of Slack, which is becoming increasingly important in large enterprise contracts. CEO Marc Benioff emphasized the essential role of traditional sales teams alongside AI advancements.
Overall, while Salesforce's results indicate strong operational performance, investor sentiment remains cautious due to potential disruptions in the SaaS business model from AI advancements.