May 8, 2025
S&P futures up 1%, extending Wednesday’s gains, which saw semis, entertainment, travel/leisure, multis, credit cards, banks, and builders lead. Overnight, Asian markets were modestly higher, and Europe opened up ~1%. Treasuries are weaker with 3–4 bp yield increases and a bear-flattening curve. The dollar index is up 0.4%, gold down 1.4%, Bitcoin futures up 3%, and WTI crude up 1.1%.
Markets are supported by renewed trade optimism. Trump is expected to announce a framework agreement with the UK today, following news of U.S.-China trade talks this weekend. This bolsters the ongoing tariff de-escalation narrative, which, along with systematic re-leveraging, strong retail dip buying, and resumed corporate buybacks, has driven recent strength in risk assets. Fed commentary remains focused on patience amid dual-mandate uncertainty. Fiscal policy remains mired in GOP reconciliation hurdles.
Today’s U.S. economic calendar includes Q1 productivity, unit labor costs, weekly jobless claims, and NY Fed inflation expectations. The Treasury will auction $25B in 30-year bonds. The Bank of England is expected to cut its Bank Rate by 25 bp to 4.25%. No major U.S. data tomorrow, though Fedspeak will be in focus with Williams, Kugler, Goolsbee, and Waller scheduled.
Earnings & Corporate Highlights:
- GOOGL: Said overall Search query growth continues.
- TSLA: India head reportedly resigned.
- ARM: June-quarter guidance light.
- APP: Jumped on Q1 beat and strong Q2 ad guidance.
- MELI: Boosted by strong fintech, led by Argentina.
- FTNT: Fell after not raising FY guidance.
- CVNA: Beat; Street positive on execution.
- AXON: Raised FY25 revenue guide.
- CTVA: Helped by cost cuts and margin expansion.
- NTR: Missed; retail, phosphate, and sulfate weak.
- ZG: Q2 guide light, but positive commentary on rentals.
- CF: Beat on nitrogen strength.
- SWKS: Beat and raised; some concern on pull-in demand.
- BROS: Continued comp momentum.
- G: Cut FY guidance.
- CLF: Pressured after worse-than-expected EBITDA.
- VAC: Beat and raised EPS guidance.
- CAR: Mixed, but noted strong fleet rotation and advanced reservations.
- GT: Sales came in light
U.S. equities finished higher Wednesday (Dow +0.70%, S&P 500 +0.43%, Nasdaq +0.27%, Russell 2000 +0.33%) in a volatile session, snapping a two-day losing streak. Gains were broad-based across cyclical sectors including semis, banks, travel, and homebuilders, while big tech was mostly higher despite a sharp drop in Alphabet. Defensive areas like consumer staples and utilities underperformed.
Key macro drivers included:
- Fed Policy: The FOMC held rates steady at 4.25–4.50% as expected. The statement acknowledged rising risks to both inflation and unemployment. Chair Powell emphasized uncertainty from tariffs, said the Fed is in no rush to move, and that policy remains well-positioned to adapt. Market reaction was modestly dovish, with 2Y yields falling and cuts still expected later this year, though consensus on timing remains divided.
- Trade Talks: U.S. and China are set to meet in Switzerland this weekend for de-escalation-focused trade discussions. Treasury Secretary Bessent reiterated these are early-stage talks. Meanwhile, Trump indicated openness to reviewing tariff exemptions but reaffirmed his stance on maintaining 145% tariffs in some areas. Risk assets responded favorably to hopes of easing trade tensions.
- AI & Search Disruption: Google shares slumped after Apple exec Eddy Cue suggested search traffic in Safari fell in April, fueling fears AI tools like ChatGPT and Perplexity could displace traditional search. Apple is reportedly exploring adding AI-powered search to Safari.
Commodities and FX markets reflected mixed sentiment. The Dollar Index rose 0.5% while gold fell 0.9%. Bitcoin futures gained 1.1%, continuing a recent rebound. WTI crude declined 1.7% on the day. In fixed income, Treasuries strengthened with a flattening curve, reflecting a more cautious near-term policy outlook.
Sector leadership came from consumer discretionary (+1.02%), information technology (+0.91%), health care (+0.81%), financials (+0.62%), and industrials (+0.51%), as cyclical groups benefited from trade optimism and continued earnings momentum. Communication services was the notable laggard (–1.84%) due to Alphabet’s sharp decline. Other weaker sectors included materials (–0.50%) and real estate (–0.02%). Energy (+0.08%), consumer staples (+0.20%), and utilities (+0.29%) posted modest gains, underperforming the broader tape.
Company Highlights by GICS Sector
Information Technology
- AMD: Beat and raised guidance despite China AI chip ban.
- ANET –4.8%: Beat and raised Q2, but reiterated FY guide; tariff concerns noted.
- MRVL –8.0%: Pressured after postponing analyst day due to macro uncertainty.
- SMCI –1.4%: Results in line with prior guidance, but FY revenue cut on macro softness.
- LITE: Beat and raised; highlighted networking recovery.
- ENTG –5.6%: Missed Q1, guided Q2 below consensus; tariff impact cited.
- KVYO +6.4%: Strong beat and raised FY guide; good mid-market and international traction.
- CRWD –4.7%: Reaffirmed FY outlook; announced 5% headcount reduction.
Consumer Discretionary
- HAIN –47.7%: Massive miss; lowered guidance and announced CEO change.
- FBIN –8.8%: Revenue light; consumer demand cited as uncertainty.
- BWA +4.4%: Q1 beat; announced exit from charging business to reduce losses.
Health Care
- OSCR +30.2%: Beat across the board; played down medical loss ratio (MLR) uptick.
- ELAN +26.3%: Q1 beat; raised revenue guidance; strong farm animal segment.
- CRL +18.7%: Beat and raised; reached board settlement with activist Elliott.
- TEVA +9.2%: Beat; raised FY EPS midpoint.
- SRPT –21.3%: Cut guidance on weak ELEVIDYS sales and regulatory risk.
- JAZZ –8.8%: Revenue miss; oncology softness; FY guide maintained.
- NVO +1.9%: EPS beat; Wegovy sales missed; FY guide lowered on slower GLP-1 uptake.
Industrials
- ROK +11.9%: Beat and raised EPS outlook; strength in automation segments.
- EMR +2.4%: Beat Q2 and raised FY outlook; tariff headwinds expected to be mitigated.
- SMCI –1.4%: Cut FY revenue guidance due to AI investment uncertainty.
- UBER –2.5%: Beat on EPS, but bookings and guidance missed.
Financials
- No major earnings, but banks and credit card names outperformed on trade optimism.
Communication Services
- GOOGL –7.3%: Slumped on AI search threat from Apple.
- DIS +10.8%: (Also under Discretionary) Strong results on EPS and Entertainment.
- UBER –2.5%: Mixed results with soft Mobility and Freight.
Materials
- MOS: Beat on fertilizer margins; raised potash guide.
- CC –10.0%: EBITDA light; slashed dividend by 65%; flagged as overhang.
- EPC –10.1%: Cut guidance due to weak organic growth and macro pressure.
Consumer Staples
- COTY –11.8%: Missed on EPS/revenue; cut FY guide despite cost-saving initiatives
Eco Data Releases | Thursday May 8th, 2025
S&P 500 Constituent Earnings Announcements | Thursday May 8th, 2025
Data sourced from FactSet Research Systems Inc.
