Stock Market Update

[BRIEFING.COM] The major averages continue to trade modestly higher at midday.

PepsiCo (PEP 158.00, +3.15, +2.03%) is nicely higher after reporting its Q1 results this morning. The beverage and snack food giant beat EPS expectations, while revenue increased 8.5% yr/yr to $19.44 bln, nicely above expectations and marking its strongest growth since 2Q23. PepsiCo reaffirmed its FY26 guidance, too, expecting core EPS growth of +4-6% and organic revenue growth of +2-4%, despite acknowledging a more volatile macro, with productivity savings, affordability actions, and better execution providing support. 

PepsiCo's Q1 results can be described as better-than-feared. Organic sales continued to improve, supported by a sharp rebound in Convenient Foods volume, most notably at PFNA, where the business returned to both organic growth and positive volume growth as affordability actions, innovation, and brand support began to gain traction. PBNA has delivered low-single-digit organic growth in recent quarters, and while it was encouraging to see volume trends improve sequentially, volumes still remained negative. International also continued its long streak of at least mid-single-digit organic growth. While operating profit and core margin improved, PFNA operating profit declined 4%, reflecting higher advertising and marketing spending.

On the geopolitical front, President Trump said via Truth Social that Israel and Lebanon have agreed to a 10-day ceasefire starting at 5:00 p.m. ET tonight, and the countries will meet in Washington on Tuesday.