May 6, 2025
S&P futures down 0.7% after U.S. equities ended mostly lower Monday, with the S&P 500 snapping a 9-day win streak. Mag 7 stocks, energy, media, and MedTech lagged, while airlines and retail/apparel names outperformed. Asian markets were mixed (Greater China led; Japan and South Korea closed), and Europe opened ~0.7% lower. Treasuries were mixed with curve steepening. The dollar index fell 0.2%. Gold gained 1.9% after a strong Monday. Bitcoin was flat. WTI crude rebounded 2.8%, recovering some of Monday’s 1.9% loss.
Macro Highlights:
Headlines remain light, though optimism around trade de-escalation has faded. Trump warned of upcoming pharma tariffs and continued to signal protectionist policies, including Sunday’s threat of 100% tariffs on foreign films. Lutnick expressed skepticism about U.S.-Canada trade progress. On the Fed front, markets expect no rate change at Wednesday’s FOMC meeting. Powell is likely to reiterate caution amid tariff risks. Rate cut expectations have fallen, with markets now pricing in ~75 bps of cuts this year, down from 100+ bps.
Economic Calendar:
- Tuesday: March trade balance
- Wednesday: FOMC statement (2 PM ET)
- Thursday: Q1 productivity, labor costs, jobless claims, NY Fed inflation expectations
- Friday: No data; Fed speakers (Williams, Kugler, Goolsbee, Waller)
Earnings Highlights:
- PLTR: Beat and raised; strength in U.S. Commercial, high expectations.
- VRTX: Missed revenue and EPS; comps tough vs high bar.
- F: Q1 beat, but pulled FY guide citing $1.5B tariff headwind.
- MAT: Beat but pulled FY guide due to macro/tariff concerns.
- CLX: Missed; lowered organic growth guidance citing macro headwinds.
- FANG: Beat on cost control; cut oil and FY capex guide.
- CE: Beat; raised cost savings guidance.
- DOV: Acquiring SIKORA AG for €550M.
- ACM: Q2 in line/better; ES outlook raised despite soft NSR growth.
- HIMS: Q1 beat but reiterated FY guide despite Wegovy deal.
- FN: Q3 beat; Datacom soft, Q4 guide light.
- LSCC: Results and outlook in line; monitoring macro trends.
- IPAR: Beat and reiterated FY guide.
- JELD: Fell sharply on cautious industry commentary.
- NKE: Announced senior leadership changes.
- BRBR: Weaker on lack of beat/raise.
U.S. equities declined Monday, ending just off session lows, Dow (–0.24%), S&P 500 (–0.64%), Nasdaq (–0.74%), Russell 2000 (–0.82%), as the S&P 500’s nine-day winning streak—its longest since 2004—came to an end. The pullback followed a 2.9% weekly gain for the S&P and over 3% for the Dow, Nasdaq, and Russell 2000. The session was light on fresh catalysts, with muted volumes and volatility (VIX back near pre-Liberation Day levels), while markets digested the implications of last week’s OPEC+ decision and upcoming Fed commentary.
Oil markets remained under pressure, with WTI crude falling another 1.9% Monday (now down over 20% YTD), following OPEC+’s weekend announcement to return ~411K bpd to the market starting in June. The move, led by Saudi Arabia, was aimed at punishing quota cheaters and came amid reports Riyadh is willing to tolerate lower prices.
Economic data was mixed. April ISM Services Index surprised to the upside at 51.6 (vs 50.2 consensus), with new orders and backlogs both higher. However, the prices paid index rose to the highest level since January 2023, and the employment component remained in contraction. Final S&P Global Services PMI came in at 50.8, down from March’s 51.4, with commentary noting soft demand due to trade-related uncertainty and tariff-driven cost pressures.
Policy commentary was limited. Fed Chair Powell is expected to hold steady on rates at Wednesday’s FOMC meeting, reiterating patience amid inflation risks tied to tariffs. Meanwhile, Trump floated the possibility of lowering tariffs on China “at some point,” but offered no timeline or contact with President Xi. Separately, he proposed a 100% tariff on foreign films. The U.S. rejected Japan’s request for full exemption from reciprocal tariffs, while India offered zero tariffs on key U.S. exports in hopes of securing a trade deal. Fiscal talks remain bogged down in GOP disagreements over Medicaid, SALT, and overall spending levels.
Other developments included increased press focus on falling maritime traffic as a sign of pending economic stress, early-week auction of $58B in 3-year Treasuries (slightly tailed), and anticipation for $42B in 10-year notes Tuesday. Key releases later this week include Q1 productivity, labor costs, jobless claims, and NY Fed inflation expectations. Multiple Fed speakers are also scheduled Friday.
S&P 500 Sector Performance
- Outperformers: Health Care (+0.35%), Utilities (+0.29%), Real Estate (+0.15%), Communication Services (+0.06%), Industrials (–0.04%), Consumer Staples (+0.02%)
- Underperformers: Energy (–2.02%), Consumer Discretionary (–1.32%), Information Technology (–0.85%), Financials (–0.75%), Materials (–0.66%)
Company Highlights by GICS Sector
Consumer Discretionary
- SKX +24.4%: Skechers to be acquired by 3G Capital for $63/sh cash (~28% premium); alternative deal option includes cash + equity in new private company.
- NFLX –1.9%: Media names under pressure following Trump’s proposal for 100% tariffs on foreign films.
- TSN –7.8%: Tyson missed on revenue despite beating on EPS; beef segment underperformed, raising concerns over margin outlook.
Information Technology
- ON –8.4%: Onsemi beat Q1 estimates, but Q2 guidance light on gross margins; some concern over lower utilization and pricing.
- PSN –2.9%: Parsons downgraded at Jefferies over risk to its Confidential Program.
Health Care
- ZBH –11.6%: Zimmer Biomet cut FY EPS guidance due to tariff risks; despite Q1 beat across major segments.
- AXSM +3.8%: Axsome beat on Q1 results and reaffirmed product timelines; NDA filings on track for AXS-05 and AXS-12.
- SHC +4.4%: Sotera upgraded to Buy at Goldman on improved model visibility.
- TGTX –13.3%: TG Therapeutics raised FY revenue guide, but missed EPS and overspent on R&D.
Energy
- BP +3.8%: Reports Shell may consider takeover of BP if prices fall further.
- BTU +5.6%: Peabody advanced on interest in certain assets and notification of material adverse change to Anglo American acquisition.
- SHEL (Shell): Reportedly working with advisers on BP acquisition.
Financials
- BRK.B –5.1%: Berkshire reported slight Q1 miss; Buffett to step down as CEO at year-end. Cash pile hit $348B. Insurance profits pressured by California wildfires.
- Citi (commentary): CEO Fraser stated most clients could absorb 10% tariffs.
Industrials
- UAL: United Airlines canceled 35 Newark round trips due to air traffic controller shortages.
- HHH +2.9%: Howard Hughes surged after Pershing Square announced a $900M investment at a ~48% premium; Bill Ackman to become executive chairman.
Materials
- FRPT +3.6%: Freshpet beat Q1 expectations; lowered FY guide but cited success with premium customer segment.
- HUN –4.2%: Huntsman downgraded at Wells Fargo due to weak visibility and macro/tariff headwinds.
Communication Services
- GOOGL: DOJ reportedly looking to force sale of parts of Alphabet’s digital ad business.
- RDDT +2.2%: Reddit upgraded at Seaport Research following post-earnings pullback; long-term monetization outlook intact.
- DIS, WBD, PARA: Media stocks under pressure on tariff threat for foreign-produced content.
Eco Data Releases | Tuesday May 6th, 2025
S&P 500 Constituent Earnings Announcements | Tuesday May 6th, 2025
Data sourced from FactSet Research Systems Inc.
