May 20, 2025
S&P futures are down 0.3% Tuesday morning after US equities reversed early losses Monday, with the S&P recovering from a 1% drop to close slightly higher. Healthcare outperformed while energy lagged. Asian markets were mostly higher, led by Hong Kong (+1.5%), while European markets edged up ~0.2%. Treasuries are slightly firmer, the dollar index is down 0.3%, gold is up 0.2%, Bitcoin futures are off 0.2%, and WTI crude is down 0.3%.
Headlines remain muted with little new on trade following mixed and slightly hawkish developments recently. Fiscal policy is in focus as House Republicans address divisions over Medicaid, SALT, and IRA credits ahead of a potential Wednesday vote, following heightened deficit concerns after the Moody’s downgrade. The Fed maintains a patient stance amid tariff uncertainty, with markets pricing in ~50 bps of easing this year. Rate cuts in China and Australia overnight were largely anticipated. Corporate buybacks and systematic re-leveraging continue to support flows.
US economic data is sparse this week, with the flash PMIs on Thursday as the highlight. The Fedspeak schedule remains active with officials reiterating patience. HD’s Q1 results were mostly in line, with strong smaller project demand and spring event activity; FY guidance was reaffirmed. Upcoming retail earnings include LOW, TGT, TJX, BK, and ROST. With over 90% of S&P 500 companies having reported, blended earnings growth stands at +13.6%, surpassing the initial +7.1% forecast, though uncertainty dominates corporate messaging
U.S. equities ended mostly higher on Monday, with the S&P 500 gaining 0.09% for its sixth consecutive advance, leaving the index up 19.5% from April’s tariff-driven lows and over 1% YTD. The Dow rose 0.32%, the Nasdaq edged up 0.02%, and the Russell 2000 slipped 0.42%. Treasuries were mixed with a steepening curve as the 10-year yield briefly surpassed 4.50% and the 30-year yield crossed 5%. The Dollar Index fell 0.7%, while gold rose 1.5%. WTI crude gained 0.3%, and Bitcoin futures advanced 1.2%.
The market rebounded from earlier losses driven by Moody’s downgrade of U.S. credit from Aaa to Aa1 (stable outlook). Trade tensions remain elevated as Treasury Secretary Bessent warned of reciprocal tariff rates returning for non-compliant countries, though economic adviser Hassett noted progress with 15 nations nearing deals. Positioning signals were mixed, with some strategists citing improved sentiment and reasonable valuations.
Trade tensions remained a focal point as China criticized U.S. warnings regarding Huawei chips, suggesting they undermined ongoing negotiations. Treasury Secretary Bessent warned that reciprocal tariff rates could return for countries failing to negotiate in good faith, though economic adviser Hassett noted progress, with 15 nations reportedly close to agreements. Meanwhile, the UK and EU reached a landmark deal to reduce trade barriers and bolster security cooperation. On the geopolitical front, President Trump reported progress on Russia-Ukraine ceasefire talks following a conversation with President Putin, as Western allies, including the UK, France, and Canada, hinted at potential sanctions on Israel over contentious policies
S&P 500 Sector Performance:
Outperformers included Healthcare (+0.96%), Consumer Staples (+0.42%), Industrials (+0.38%), Materials (+0.35%), Utilities (+0.34%), Real Estate (+0.21%), and Communication Services (+0.15%).
Underperformers were Energy (-1.55%), Consumer Discretionary (-0.27%), Technology (-0.05%), and Financials (-0.01%).
Corporate News by GICS Sector:
Healthcare:
- UNH (+8.2%): Shares surged after CEO Hemsley disclosed a $25M stock purchase, adding to $5B insider buys announced Friday.
- HUM (+3.9%): Rose as CEO Rechtin disclosed the purchase of 6.5K shares.
- REGN (+15%): Announced plans to acquire bankrupt 23andMe for $256M.
- NVAX (+15%): Gained after securing FDA approval for its COVID-19 vaccine, Nuvaxovid, for high-risk groups.
Consumer Staples:
- KMB (+1.2%): Announced plans to transfer its stock listing to Nasdaq effective 30 May.
Industrials:
- CARR (flat): Unveiled medium-term guidance targeting 6-8% annual organic growth and mid-teens EPS growth.
Energy:
- TXNM (+7%): Agreed to be acquired by Blackstone Infrastructure for ~$11.5B, representing a ~16% premium to its prior close.
Technology:
- NVDA (flat): Outlined plans to license AI communication technology.
- AAPL (flat): Reportedly under scrutiny for plans to deploy AI in China through BABA.
Financials:
- JPM (flat): Reiterated 2025 NII and expense guidance during its analyst meeting, with CFO signaling an improved outlook for net interest income.
Communication Services:
- RDDT (-4.6%): Downgraded to equal weight at Wells Fargo, citing lasting user disruptions and competitive risks from Google’s AI search capabilities.
Consumer Discretionary:
- TSLA (-2.3%): Declined on reports of new U.S. discounts and rising inventory, reflecting demand challenges.
- SHAK (-1.6%): Downgraded to hold at TD Cowen, with analysts noting crowded market dynamics and fully priced-in margin improvements.
Energy:
- FSLR (-7.6%): Slid on reports suggesting House GOP plans to curtail IRA tax credits earlier than expected
Eco Data Releases | Tuesday May 20th, 2025
No Major Releases Today
S&P 500 Constituent Earnings Announcements | Tuesday May 20th, 2025
Data sourced from FactSet Research Systems Inc.
