May 13, 2025
S&P futures are down 0.4% following Monday’s 3% rally that left the S&P less than 5% below its mid-February all-time high. Ten of 11 sectors advanced Monday, led by big tech, apparel, transports, and most-shorted names, while staples and utilities lagged. Overnight, Asian markets were mostly higher, with Japan and Taiwan leading, though Hong Kong underperformed. European markets are little changed. Treasuries are firmer after Monday’s bear flattening. The dollar index is down 0.2%, gold has recovered 0.9%, Bitcoin futures are up 0.6%, and WTI crude is up 0.5%.
The rally followed a more aggressive-than-expected US-China tariff de-escalation, sparking upward revisions to earnings and growth forecasts. Concerns linger over logistical challenges for trade deals, elevated tariff rates, and volatility in US trade strategy. Fiscal policy is also in focus as Republicans begin markups on their reconciliation bill amid ongoing divisions.
Today’s US economic calendar features CPI and NFIB Small Business Optimism. CPI is expected to rise 0.3% m/m in April, with y/y headline and core readings steady at 2.4% and 2.8%, respectively. The rest of the week includes Fed speeches, manufacturing data, retail sales, and housing reports, with Fed Chair Powell speaking Thursday.
On the corporate front, Amazon (AMZN) is reportedly partnering with FedEx (FDX) for third-party delivery. Boeing (BA) deliveries to China have resumed. AT&T (T) reaffirmed 2025 guidance, citing a healthy wireless market. Simon Property Group (SPG) reaffirmed FY real estate FFO guidance despite a headline miss. DaVita (DVA) missed on EPS due to weaker volumes attributed to flu season. Power Integrations (POWI) provided in-line results and guidance with a $50M buyback. Callaway Golf (MODG) beat Q1 estimates, updated FY guidance, and reiterated plans for business separation.
US equities posted significant gains Monday: Dow +2.81%, S&P 500 +3.26%, Nasdaq +4.35%, Russell 2000 +3.42%. The S&P 500 is now down only ~5% from its February record high and less than 1% year-to-date. Risk assets rallied on the back of easing US-China trade tensions after weekend talks in Switzerland. Both nations agreed to lower tariffs for 90 days: the US reduced tariffs on Chinese goods from 145% to 30%, while China cut tariffs on US goods from 125% to 10%. The aggressive relief exceeded expectations, with President Trump noting that China agreed to “open up,” though specifics remain unclear.
Treasuries experienced a bear flattening move, with shorter-dated yields rising 11-12 bps. The dollar index climbed 1.5%, gold fell 3.5%, Bitcoin futures declined 1.3%, and WTI crude rose 1.5% before closing off highs. The Fed’s April SLOOS survey highlighted tightening lending standards and weakened demand for credit, particularly in commercial and industrial loans.
This week, markets await the April CPI report on Tuesday, along with Fed speeches and additional data including retail sales, PPI, and industrial production later in the week.
Sector Overview
The best-performing sectors on Monday included consumer discretionary (+5.66%), technology (+4.66%), and communication services (+3.35%). Consumer discretionary stocks benefited from gains in Amazon (AMZN) and Meta Platforms (META) among the “Mag 7” tech names, alongside strength in apparel retailers like Nike (NKE) and TJX Companies (TJX). Technology was supported by semiconductor and hardware stocks, with notable contributions from NVIDIA (NVDA) and Apple (AAPL). Communication services saw strength in streaming and gaming subsectors. On the other hand, utilities (+0.68%) and real estate (+0.03%) underperformed, reflecting pressure from rising yields. Consumer staples (+0.07%) also lagged, weighed down by weakness in grocers and tobacco stocks such as Kroger (KR) and Altria (MO). Healthcare (+2.43%) faced headwinds, as pharmaceutical stocks initially fell following Trump’s proposal for a “most favored nation” drug pricing policy.
Notable Corporate News by Sector
Consumer Discretionary:
- Hilton Worldwide (HLT) gained +3.9% following a Jefferies upgrade citing resilience in its business model.
- Fox Corporation (FOXA) rose +4.3% after a strong FQ3 earnings beat, driven by digital growth and Super Bowl impacts.
Technology:
- Coinbase (COIN) advanced +4.0% on an upgrade to neutral, citing momentum in Altcoins and decoupling from Bitcoin prices.
Industrials:
- Johnson Controls (JCI) added +3.7% on a Deutsche Bank upgrade, highlighting margin improvement potential.
Energy:
- NRG Energy (NRG) jumped +26.2% after announcing a $12B acquisition and plans for share buybacks.
Healthcare:
- Newmont (NEM) declined -5.9% due to a selloff in gold prices following the US-China trade agreement.
Materials:
- Entegris (ENTG) gained +7.9% after announcing a leadership transition, boosting investor confidence.
Eco Data Releases | Tuesday May 13th, 2025
S&P 500 Constituent Earnings Announcements | Tuesday May 13th, 2025
Data sourced from FactSet Research Systems Inc.
