May 2, 2025
S&P futures are up 0.3% after the index posted an eighth straight gain on Thursday, now up over 8.5% since early April and just 1% below pre-tariff announcement levels. Stocks are tracking for a second straight weekly gain, the first since January. Overnight, Asia traded mostly higher (led by Hong Kong and Japan), and Europe is up ~1%. Treasuries are slightly firmer, dollar down 0.4%, gold up 1.4%, and crude off 0.4%.
Markets remain firm heading into today’s April jobs report, with sentiment buoyed by tariff de-escalation chatter, including China weighing a response to recent U.S. trade overtures. Earnings season remains a net tailwind, with upside surprises (~9% above expectations) and strong tariff mitigation commentary. Despite some underwhelming reports from AAPL and AMZN, broader narrative on big tech remains intact. Flows are also supportive, with systematic re-leveraging, resilient retail buying, and corporate buybacks resuming post-blackout.
Macro focus today:
- April nonfarm payrolls expected at +130K (vs. +228K in March).
- Unemployment rate seen steady at 4.2%.
- Average hourly earnings expected +0.3% m/m.
- March factory orders also due.
Earnings Highlights (Selected):
- AAPL: iPhone sales beat, but weakness in China and soft Q3 guide.
- AMZN: Q1 EBIT strong, AWS growth decelerated, soft Q2 outlook.
- AMGN: Sales better, pipeline remains key.
- SYK: Beat and raised FY organic growth guide.
- ABNB: Weaker room nights and cautious Q2 guide.
- TEAM: Sharp drop on underwhelming Cloud growth.
- MPWR: GM guide soft on product mix.
- TWLO: Beat and raised.
- DUOL: Up big on EBITDA beat, reiterated guide, $3B buyback.
- RDDT: Beat and guided higher; ad strength a key theme.
- IR: Miss and cut FY EPS.
- FND: Trimmed guide but reiterated tariff mitigation strategies.
- ROKU: Down despite better-than-feared print.
- MHK: Beat, but cautious Q2 guide on consumer sentiment.
- OLN: Up on higher cost-savings target.
- HUN: Miss and weak Q2 guide.
- CART: GTV beat; Q2 EBITDA guide above consensus.
- COLM: Pulled FY guide due to trade policy uncertainty.
U.S. equities extended their rally on Thursday, with the S&P 500 posting its eighth straight gain—its longest winning streak of the year—despite fading into the close. The index remains on track for back-to-back weekly gains for the first time since January. Sentiment was again boosted by strong results from big tech, particularly Microsoft (MSFT) and Meta (META), which reinforced confidence in the AI growth narrative and lifted S&P 500 Q1 blended earnings growth to 12.3%, up from 7.2% at the quarter’s start.
The macro picture was more mixed. April ISM Manufacturing came in slightly better than expected at 48.7 (still contractionary), while weekly jobless claims rose to 241K, their highest level since October. Tariff pressures were frequently cited in both ISM and PMI surveys, with firms highlighting margin erosion, supply chain bottlenecks, and pricing headwinds. March construction spending was up 0.5% m/m, exceeding estimates. Traders continue watching tariff trends closely, with signs of auto sales front-loading ahead of tariffs and some companies noting significant anticipated cost hits.
The dollar strengthened on yen weakness after the Bank of Japan downgraded growth forecasts, while Treasuries sold off modestly, flattening the curve. Gold tumbled 2.9%, and oil rebounded modestly following a two-day drop triggered by reports that Saudi Arabia may tolerate lower prices.
Company-Specific Highlights by GICS Sector
Information Technology
- MSFT +7.6%: Beat expectations with Azure growth accelerating to 35% (+400 bps q/q); reiterated strong AI demand and raised capex guidance.
- NVDA +2.5%: Reported White House may ease chip export restrictions to UAE, which could support international growth.
- QCOM -9.0%: EPS/revenue beat, driven by Handsets and Auto, but licensing results disappointed; in-line Q3 outlook; no material tariff impacts noted.
- TTMI +16.6%: Beat and raised guidance; AI tailwinds and tariff insulation cited as positives.
- CTSH +2.3%: Q1 beat with FY25 guidance reiterated; weak bookings flagged due to macro uncertainty.
Communication Services
- META +4.2%: Revenue and operating income beat; commentary highlighted AI-driven ad monetization and engagement; raised capex guide.
- SNAP (prior day): Flagged Q2 softness and noted tariff pressures.
- CHTR, TMUS, VZ, DIS: No new data, but sector buoyed by tech momentum.
Consumer Discretionary
- TSLA flat: Denied reports about board exploring Musk replacement.
- KSS +7.8%: Beat Q1 guidance; CEO terminated for conflict of interest.
- MCD: Missed on comps and guest traffic amid weakening demand.
- ALGN +2.0%: Beat on better volumes and reiterated 2025 guidance despite tariffs.
- CHD -7.0%: Cut FY guide due to weak US consumption and flagged $190M tariff hit.
Consumer Staples
- PPC -14.4%: Missed on earnings; cited FX pressure and weather disruptions.
- MDLZ (prior day): Reaffirmed guidance despite cocoa volatility.
- GPK -15.6%: Missed on EPS and cut FY guide citing weak packaged food volumes.
Healthcare
- LLY -11.7%: Beat on revenue (Mounjaro, Zepbound strong) but cut FY EPS due to IR&D charges.
- CVS +4.1%: Beat and raised FY EPS; strength in Benefits segment noted.
- BDX -18.1%: Missed on revenue; Life Sciences weak, cut FY EBITDA.
- MRNA -5.3%: Beat, but FY revenue outlook implies 33% y/y decline.
- GEHC (prior day): Beat on imaging growth but trimmed FY EPS due to tariff concerns.
Industrials
- PWR +10.0%: Beat on Q1; strong backlog, EPS and revenue guidance above Street; proactive tariff mitigation efforts cited.
- HWM +6.7%: Beat with Engine margins driving performance; raised FY guidance despite tariff impacts.
- CHRW (prior day): Beat with NAST strength.
- OSK (prior day): EPS miss; Access Equipment weak, backlog down; cited $25M in expected 2025 tariff costs.
- FTV -4.2%: Q1 and FY guidance lowered due to tariff impacts and delayed tech recovery.
Materials
- ASH -9.9%: Missed and cut FY guide; flagged weak demand and geopolitical disruptions.
- ALB, FMC (prior day): Both beat; noted cost control and less severe-than-feared tariff impacts.
- PPG (prior day): Beat; highlighted improving demand and pricing offsetting tariff-related margin pressures.
- VMC (prior day): Reaffirmed guidance, cited solid pricing trends.
Financials
- MA (prior day): Reported strong consumer/business spending; raised FY guidance.
- AFL (prior day): In line; Japan operations weak.
- Regional banks: Underperformed broadly on no clear catalyst.
Energy
- Crude: Up 1.8% after sharp two-day selloff; Saudi Arabia signaled tolerance for lower prices.
- No major earnings updates from energy names, though OPEC production unexpectedly declined.
Real Estate
- AVB, MAA (prior day): Largely in line; cautious outlook for 2H.
- CCI (prior day): Slight beat; reiterated demand strength for tower assets.
Utilities
- Sector underperformed despite a stable rate backdrop.
- No significant earnings updates in Thursday’s session.
Eco Data Releases | Thursday May 2nd, 2025
S&P 500 Constituent Earnings Announcements | Thursday May 2nd, 2025
Data sourced from FactSet Research Systems Inc.
