May 1, 2025
S&P futures are up 1.2% following a strong late-day rally Wednesday that extended the index’s winning streak to seven sessions. Big tech earnings—especially Microsoft (MSFT) and Meta (META)—are the major driver this morning, reinforcing optimism around AI growth and pushing the S&P 500’s Q1 blended earnings growth to 11.9%, up from 7.2% at quarter-end. Treasury yields are mixed with slight curve flattening. The dollar is stronger, particularly vs the yen after BoJ growth downgrades, while gold is down >2.5%, and oil remains weak after a sharp two-day drop on signs Saudi Arabia is comfortable with lower prices.
Elsewhere, tariff mitigation, retail buying, and systematic fund re-leveraging remain underlying tailwinds, though fiscal policy faces complications amid internal GOP divisions. The Fed remains quiet ahead of next week’s meeting.
Today’s Economic Focus:
- Initial jobless claims
- Final April S&P Global Manufacturing PMI
- ISM manufacturing (consensus: 48.0 vs 49.0 prior)
- March construction spending
- Friday’s April payrolls report still in focus (consensus: +130K jobs, 4.2% unemployment, +0.3% m/m wage growth).
Earnings Highlights:
- MSFT: Azure growth re-accelerated to 35%; strong AI tailwind.
- META: Beat expectations, raised capex, highlighted AI momentum.
- QCOM: Slight beat and raise, but underwhelmed.
- CTSH: Beat Q1, reiterated FY FX-neutral growth; bookings weak.
- KLAC: Beat and guided higher, said demand trends unchanged.
- ALGN: Big move higher on strong volume and margin leverage.
- TTMI: Beat and raise, AI demand for data center/networking cited.
- EBAY: Solid Q1/Q2 outlook; CFO stepping down.
- MGM: EBITDA beat across all segments; buyback talk supportive.
- CHRW: Beat, with strength in NAST unit.
- FMC / ALB: Both beat on EBITDA; ALB noted cost control, FMC tariff impact less severe than feared.
- ASH: Missed and cut guidance, cited tariff pressures.
- CAKE: Beat on margins, comps in line, trimmed FY sales guide.
- AVB / MAA: Mostly in line, with cautious tone for 2H.
- CP: Lowered FY EPS growth.
- AFL: In line; Japan a drag.
- CCI: Slight beat; demand for tower assets stable.
- PPC: Revenue in line, EBITDA light, though outlook upbeat.
U.S. equities closed mixed on Wednesday (Dow +0.35%, S&P 500 +0.15%, Nasdaq –0.09%, Russell 2000 –0.63%), with a late-day rally lifting the S&P 500 to its seventh consecutive daily gain—its longest streak of the year. The rally came despite a weaker-than-expected Q1 GDP report, soft ADP payrolls, and renewed macro concerns, including tariff-related trade distortions. However, consumer resilience, tariff mitigation, and positioning tailwinds helped keep sentiment constructive into month-end.
Q1 GDP unexpectedly contracted by 0.3%, marking the first decline since early 2022. The drag came primarily from a record subtraction by net exports as companies frontloaded imports ahead of Trump tariffs. Still, personal consumption rose 1.8%, better than expected but a slowdown from Q4’s 4.0%. The core PCE price index rose 3.5%, hotter than forecast, though March’s monthly core PCE was flat—suggesting cooling in more recent inflation readings.
ADP payrolls added just 62K jobs—well below expectations of 134K—reinforcing signs of a slowing labor market. Meanwhile, March pending home sales surged 6.1%, and personal income and spending beat forecasts, pointing to still-strong consumer demand. Treasury markets saw curve steepening; the 10Y yield ticked up modestly while the long end stayed anchored. The dollar index rose 0.3%, and crude oil fell sharply (-3.7%) after Saudi Arabia signaled comfort with lower prices. Gold was down 0.4%.
Company-Specific Highlights by GICS Sector
Information Technology
- STX +11.6%: Beat across revenue, earnings, and margins. Cloud and hyperscaler demand seen strong. Minimal tariff impact expected.
- QRVO +14.4%: Fiscal Q4 beat and strong Q1 guide. Bullish on Apple content growth and defense segment demand.
- SMCI –11.5%: Preannounced downside; customer delays and inventory-related costs cited. Guidance cut.
- TENB –9.2%: Beat Q1 across the board, but FY revenue guidance lowered due to deal delays and macro uncertainty.
- CDNS +5.8%: Beat on EPS with in-line revenue. FY guide raised. Broad-based strength but cautious on China.
- GRMN –8.4%: EPS miss; margin guide lowered despite strong Auto OEM segment. Trimmed FY EPS guide.
Consumer Staples
- MDLZ +3.8%: EPS beat; FY guidance reaffirmed. NA weakness offset by EM resilience. Cocoa costs volatile but manageable.
- PPG +4.9%: Beat EPS; organic volume growth returned. Strong Performance segment. FY guide reaffirmed.
- KO steady: Reaffirmed FY guide. Positive pricing offsetting inflationary pressures.
- WING +14.5%: EPS beat. Comps light, but unit growth outlook raised.
Consumer Discretionary
- SBUX –5.7%: Missed EPS. Turnaround costs and soft US comps pressured margins. No updated guide provided.
- NCLH –7.8%: Missed Q1, soft 12-month booking commentary. FY guide reaffirmed, but softness in outlook flagged.
- NKE –2.0%: Downgraded by Wells Fargo. Concerns over delayed turnaround amid macro pressures.
Industrials
- CAT steady: Guidance in line, noting smaller-than-expected tariff impact.
- TT +8.5%: Big beat. Raised top-end of FY guide. Record bookings in HVAC.
- OSK –5.1%: Missed on EPS. Access Equipment weakness, tariff-related pressure flagged in FY guide.
- DAN +5.8%: Beat with tariff mitigation noted. FY guide reiterated. Cost savings initiatives in focus.
- XPO +8.9%: Beat Q1; better-than-expected NA results. FY planning assumptions held.
- WERN –10.9%: Loss reported. Competitive and insurance-related costs a headwind.
Healthcare
- GEHC +3.3%: Organic growth beat, driven by Imaging. Tariffs trimmed EPS guide but revenue guide held.
- HUM steady: Beat. Lower medical loss ratio was a bright spot.
- BBIO +5.3%: Revenue well ahead; strong product uptake. EPS miss overlooked.
- BLCO –15.7%: Missed EPS; cut FY guide. Weighed down by FX and product recall.
- REGN –6.9%: Missed EPS and revenue. Eylea underperformed; competitive and pricing pressures cited.
Financials
- V steady: Beat and reiterated FY guide. Consumer spending trends seen resilient.
- BKNG +6.5%: Strong Q1, but noted macro uncertainty. FX-neutral FY guide midpoint lowered.
- Asset managers and life insurers broadly lagged on yield curve steepening and rate volatility.
Communication Services
- SNAP –12.4%: NA trends positive, but soft Q2 outlook and no formal guide rattled investors. Tariff concerns mentioned.
- META, MSFT (earnings post-close): Market focused on AI capex, datacenter demand, and ad spend resilience.
- SPOT –3.5%: EPS miss; weaker Premium ARPU flagged. Guidance reiterated but concerns remain around margin expansion.
Energy
- FSLR –8.3%: EPS miss; FY guide cut due to tariff-related costs and operational challenges. Multiple downgrades followed.
- Oil majors: Weak across the board. Crude price plunge (-3.7%) after Saudi Arabia signaled tolerance for lower prices.
Real Estate
- REITs broadly higher: Yield move supportive; no major negative surprises in fundamentals. Defensive positioning, easing rate outlook helpful.
Materials
- VMC +6.9%: Beat on EBITDA; strong pricing commentary in Aggregates. FY guide reaffirmed.
- IP –4.1%: Q1 miss across revenue, EPS. Soft demand cited; DS Smith acquisition adds noise to quarter.
- SHW steady: Reaffirmed FY guide despite soft volumes. Tariff commentary modest.
Eco Data Releases | Thursday May 1st, 2025
S&P 500 Constituent Earnings Announcements | Thursday May 1st, 2025
Data sourced from FactSet Research Systems Inc.
