May 16, 2025
S&P futures up 0.2% early Friday, near premarket highs, following a mixed Thursday where defensive sectors outperformed but big tech lagged. Major indices are poised for solid weekly gains. European markets stronger, while Asian markets saw mixed results. Treasuries are firmer with curve flattening, yields up for the week. Dollar index down 0.1%, gold off 0.4%, Bitcoin futures up 0.7%, and WTI crude steady after a 2.4% drop on US-Iran talks progress.
Markets continue reacting to reduced US-China trade tensions from last weekend. President Trump reiterated upcoming tariff rate changes and noted interest from numerous countries in trade talks but flagged capacity constraints. USTR Greer is at APEC, while US-Japan trade talks are expected soon. Trump concluded his Middle East tour with positive signals for markets, including AI-related developments. Congressional debate over Trump’s reconciliation bill persists, though delays may be procedural.
Key data includes May U. Michigan consumer sentiment/inflation expectations, April housing starts/permits, and import/export prices. Globally, Japan’s Q1 GDP contracted more than expected, pushing BOJ rate hike forecasts to Q4. Russia-Ukraine talks in Turkey show limited progress without leadership participation.
Corporate updates are light. AAPL blocked Fortnite on US/EU app stores. Trump announced a $14.5B plane order with Etihad. Bloomberg reports CHTR in advanced talks to acquire Cox Communications for ~$30B. AMAT’s revenue and guidance disappointed but drew optimism for demand trends. TTWO lowered FY net bookings guidance, while CAVA raised FY EBITDA guidance. DOCS tumbled on weaker revenue outlook.
U.S. equities posted mixed results on Thursday, with the Dow up 0.65%, the S&P 500 up 0.41%, and the Nasdaq slipping 0.18% after six consecutive gains. The Russell 2000 advanced 0.52%. Defensive sectors outperformed, signaling a rotation as the Nasdaq paused its rally, while growth-heavy sectors lagged. Treasuries rallied with some curve steepening, as yields fell 5-10 basis points. The dollar index dipped 0.2%, while gold rose 1.2%. Bitcoin futures declined 0.2%. WTI crude oil fell 2.4%, weighed by ongoing speculation about a potential U.S.-Iran nuclear agreement.
Economic data painted a mixed picture. April retail sales rose 0.1%, slightly below consensus, while March was revised upward. The core PPI dropped 0.4%, driven by declines in service margins, but goods prices were flat. Weekly jobless claims were steady at 229K, and continuing claims came in slightly above forecasts. The May Empire State Index missed expectations, while the Philly Fed index was less negative than projected. April industrial production was flat, missing consensus, while the May NAHB housing index fell to its lowest since November 2023.
Fed Chair Powell delivered remarks on the Fed’s strategy review, emphasizing potential for more frequent supply shocks and reiterating the importance of the 2% inflation target. Powell’s comments did not signal any immediate policy shifts but hinted at possible revisions to the Fed’s longer-term strategy documents.
Consumer Discretionary (−0.68%)
- Foot Locker (FL): Surged 85.7% on news of acquisition by Dick’s Sporting Goods (DKS) for $2.4B in cash at an 86% premium to Wednesday’s close.
- Boot Barn (BOOT): Rose 16.7% following lighter Q4 results but strong forward guidance and signs of accelerating sales in April and May.
- Alibaba (BABA): Dropped 7.6% after fiscal Q4 revenue and EPS missed expectations, with analysts citing weak Chinese consumer demand as a headwind.
Consumer Staples (+2.00%)
- Walmart (WMT): Gained 0.4% after beating Q1 expectations and reiterating FY guidance. The company highlighted strong grocery performance but warned of tariff-driven price hikes starting in late May.
Technology (−0.03%)
- Cisco Systems (CSCO): Gained 4.9% on FQ3 beats across EPS, revenue, and margins, supported by strong cloud product orders and AI momentum.
- Meta Platforms (META): Fell 2.4% as reports surfaced about delays in the rollout of its AI model due to performance concerns.
Healthcare (+1.28%)
- UnitedHealth Group (UNH): Declined 10.9% following reports of a potential Department of Justice investigation into its Medicare Advantage business.
Industrials (+1.11%)
- Deere & Co. (DE): Rose 3.8% after FQ2 beats in EPS and revenue, driven by strong agricultural sales, despite lowering FY margin guidance.
Real Estate (+1.84%)
- REITs broadly outperformed, supported by falling treasury yields and the defensive rotation.
Utilities (+2.12%)
- Utilities led sector gains, benefiting from lower bond yields and heightened defensive positioning.
Energy (+0.12%)
- Energy struggled as WTI crude fell 2.4% on increased speculation of an Iran nuclear deal.
Eco Data Releases | Friday May 16th, 2025
S&P 500 Constituent Earnings Announcements | Friday May 16th, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
