ETFsector.com Daily Trading Outlook

May 7, 2025

S&P futures up 0.6%, rebounding after two down sessions. Tuesday saw biotech lag while utilities and energy outperformed. Overnight, Asian markets mostly gained, led by Shanghai, KOSPI, and ASX200; Nikkei closed lower. European markets opened ~0.3% lower. Treasuries were mostly weaker with curve flattening. The dollar index rose 0.2%, gold fell 1.1%, Bitcoin futures jumped 2.5%, and WTI crude rose 0.9%.

Key Drivers:

• U.S.-China trade talks set for this weekend in Switzerland, focusing on de-escalation. Bessent noted no sweeping deal expected but momentum fits the broader easing narrative.
• China policy support included a 10 bp rate cut, 50 bp RRR reduction, and relending programs, further supporting risk sentiment.
• FOMC statement due at 2 PM ET. Fed expected to hold rates steady. Focus is on Powell’s tone regarding tariff-driven inflation—whether viewed as transitory or a risk to long-term expectations. Markets now pricing in ~80 bps of cuts in 2025, down from 100+ bps pre-April jobs data.

Earnings Highlights:

• AMD: Beat and raised guidance despite China AI chip ban.
• ANET: Beat and raised Q2, but left FY guide unchanged; stock fell.
• MRVL: Pressured after postponing June investor day.
• EA: Beat on bookings; FY26 bookings guide above consensus.
• RIVN: Posted second straight quarter of positive gross profit.
• MOS: Beat on fertilizer margins; raised potash outlook.
• KYVO: Raised FY revenue guidance above Q1 beat.
• WYNN: Mixed results; strong Las Vegas, softer Macau.
• FBIN: Cited macro headwinds affecting demand.
• CRUS: Supported by iPhone strength and likely pull-ins.
• COTY: Sales trends softened.
• UPST: Beat and raised, but stock down on underwhelming magnitude.
• SRPT: Down sharply after cutting FY guidance.
• LITE: Beat and raised on cloud strength and networking recovery.
• KLIC: Fell on weak Q3 guide; cited cautious SE Asia order activity.
• CC: Down heavily on unexpected dividend cut.
• GO: Q2 and FY comp guidance lowered.

U.S. equities declined for a second day on Tuesday (Dow –0.95%, S&P 500 –0.77%, Nasdaq –0.87%, Russell 2000 –1.05%) as the market digested weaker earnings and revived trade uncertainty. While stocks finished off session lows, all major indices closed lower. Defensive rotation and profit-taking continued after the prior nine-day S&P 500 rally.

Trade headlines remained mixed. Trump reiterated his authority to dictate tariffs, casting doubt on de-escalation momentum. However, Bessent noted potential for trade deals this week, and the U.S. and U.K. were reportedly close to an agreement to cut tariffs on steel and car exports. FT also reported potential EU tariff expansion to areas like pharma and copper.

Economic data showed the March trade deficit widened to a record $140.5B, driven by a rise in imports. Tuesday’s $42B Treasury auction of 10-year notes stopped through by 1.2 bps and saw the second-highest bid-to-cover ratio of the year.

No major data is expected Wednesday ahead of the FOMC statement at 2 PM ET. The Fed is widely expected to leave policy unchanged, with Powell likely to emphasize tariff risks to both employment and price stability. Market pricing now reflects only ~75 bps of cuts in 2025, down from over 100 bps before last week’s jobs data.

S&P 500 Sector Performance

Outperformers: Utilities +1.23%, Energy +0.10%
Modest Laggards: Consumer Staples –0.17%, Communication Services –0.50%, Financials –0.52%, Technology –0.63%, Materials –0.66%, Real Estate –0.69%
Underperformers: Health Care –2.76%, Industrials –0.85%, Consumer Discretionary –0.85%

Company Highlights by GICS Sector

Health Care

• HIMS +18.1%: Q1 beat on revenue/EBITDA; FY guide reiterated; analysts positive on long-term outlook despite near-term semaglutide subscriber drop.
• NBIX +8.4%: Q1 beat driven by Ingrezza strength; reaffirmed FY guidance.
• KRYS –14.1%: Subpoenaed by DOJ; Q1 miss and regulatory concerns weighed heavily.
• MRNA –12.3%: Biotech sector broadly down after FDA appointed Vinay Prasad to head CBER.
• VRTX –10.0%: Q1 miss and reduced guidance; downgraded at Leerink amid weak uptake for new therapies.

Information Technology

• PLTR –12.1%: Revenue beat and guidance raised, but bar was high; concerns about Europe, decelerating customer growth, and valuation.
• LSCC –9.3%: Results in line, but Q2 guidance cautious; flagged prolonged inventory normalization.
• FN –7.3%: Q3 beat, Q4 guide light; softness in Datacom and tariff exposure flagged.
• DDOG: Mixed takeaways; large customer growth solid, but billings soft.

Consumer Discretionary

• UPWK +18.0%: Strong Q1 beat; raised EPS guidance; macro headwinds minimal.
• LCII +6.6%: Q1 beat driven by OEM sales in Adjacent and RV markets; reaffirmed long-term growth goal.
• DASH –7.4%: Acquiring Deliveroo for ~$3.9B; Q1 revenue miss, Q2 guide light.
• SG –8.3%: Downgraded at JPM; demand softness and value concerns.
• TSLA –1.8%: Weak European EV registrations despite Model Y refresh.

Industrials

• ARMK +10.1%: Q2 earnings better; reiterated guidance; international and FCF strong.
• J –5.7%: EPS beat, revenue miss due to reserve; FY guide maintained.
• TDG –5.5%: EPS beat; minor tariff impact; CEO succession announced.
• IT: Lowered Research segment outlook; cautious macro tone.

Materials

• CE +9.6%: Q1 beat; guided Q2 EPS in line; minimal tariff risk expected.
• SEE +5.1%: Beat on earnings; organic growth in Food segment; FY guide reaffirmed.
• AVNT +4.3%: Q1 in line; reiterated outlook; flagged uncertain demand but minimal tariff impact.
• CLX –2.4%: Q3 organic sales declined; FY guide cut; consumer weakness and destocking continue.

Energy

• FANG: Beat on cost control; lowered oil output and FY capex guidance.
• US crude: EIA trimmed 2025 output estimate to 13.42M bpd (–100K vs prior).

Communication Services

• MAR +1.9%: Q1 beat on RevPAR and EBITDA; Q2 guide strong; FY lowered, but expected.
• DASH –7.4%: Deliveroo deal, weaker-than-expected Q1/Q2 outlook.
• COIN –1.3%: Downgraded ahead of earnings; flagged Ethereum drag and weaker transactions.

Consumer Staples

• THS: Beat; positive commentary on private label trends.
• ENR: Cut FY guide citing consumer caution.
• BRBR –19.0%: Q2 slightly better but outlook weak; growth concerns for 2H.
• MAT: Beat but pulled guidance; plans to mitigate tariffs via pricing and supply chain.

Eco Data Releases | Wednesday May 7^th, 2025

S&P 500 Constituent Earnings Announcements | Wednesday May 7^th, 2025

Data sourced from FactSet Research Systems Inc.