May 27, 2025
S&P futures up 1.5%, rebounding after last week’s selloff when major U.S. indices dropped ~2.5%-3.5%. Big tech, energy, apparel, chemicals, builders, and banks were notable laggards. Asian markets were mixed, with Japan, Australia, Hong Kong, and Singapore higher, while Mainland China, South Korea, and Taiwan declined. European markets rose ~0.5%.
Treasuries are firmer, with 10-year yields below 4.50% and 30-year yields below 5%. The dollar index is up 0.2%, gold is down 1.9%, Bitcoin futures are flat, and WTI crude rose 0.4%.
Key Tailwinds
- Tariff Delay: Trump postponed the 50% EU tariff deadline to July 9 after a positive call with European Commission President von der Leyen. The EU agreed to fast-track trade talks.
- Global Bonds: Japan’s finance ministry may tweak issuance, dialing back super-long bonds following last week’s JGB market rout.
Economic Calendar
U.S. releases include April durable goods orders, March FHFA house price index, S&P Case-Shiller home prices, May Conference Board consumer confidence, and Dallas Fed manufacturing index. Treasury supply focus with $69B in 2-year note auctions today, $70B in 5-year notes tomorrow, and $44B in 7-year notes Thursday. Fed speakers include Barkin and Williams; Kashkari reiterated patience on inflation.
Corporate Highlights
- Earnings: AZO and PDD report today. NVDA and CRM report Wednesday; COST, DELL, MRVL, ZS, and GPS report Thursday.
- NVDA: Launching Blackwell AI chip for China, mass production in June (Reuters).
- AAPL: CEO Cook draws Trump’s ire (NY Times).
- TSLA: Musk returning to 24/7 involvement; European sales fell for the fourth straight month.
- BA: Reached DOJ deal to avoid prosecution over 737 MAX crashes.
- GM: Continues EV push despite adoption challenges in the U.S.
U.S. equities closed lower on Friday, with major indices posting weekly losses exceeding 2%. The Dow fell 0.61%, the S&P 500 dropped 0.67%, and the Nasdaq slid 1.00%, while the Russell 2000 shed 0.28%. Stocks pared losses from intraday lows, but big tech was a notable laggard, led by declines in Apple. Weakness extended to semiconductors, apparel, off-price retail, airlines, regional banks, and machinery. Conversely, utilities, nuclear energy, grocers, and precious metal miners outperformed.
In fixed income, Treasuries were little changed, with the 10-year yield holding above 4.50% and the 30-year yield above 5.0%. The dollar index dropped 0.9%, marking its first weekly decline in five weeks. Gold rose 2.1%, gaining 5.6% for the week, its second-best YTD performance. WTI crude gained 0.5%, reversing earlier losses, while Bitcoin futures declined 2.0% after hitting a fresh ATH the previous day.
Trade tensions re-emerged after President Trump announced plans for a 50% tariff on EU goods starting June 1 and a 25% tariff on iPhones unless they are manufactured in the U.S. Discussions with the EU and Japan showed little progress, and optimism around U.S.-China trade softened. April new home sales significantly beat expectations at a 743K SAAR (+3.3% y/y), but March figures were revised lower.
Looking ahead, next week’s key releases include durable goods orders, Conference Board consumer confidence, FOMC minutes, Q1 GDP revisions, and core PCE inflation.
Sector Performance:
Outperformers: Utilities (+1.16%), Consumer Staples (+0.31%), Energy (+0.28%), Real Estate (+0.04%).
Underperformers: Technology (-1.33%), Communication Services (-0.99%), Consumer Discretionary (-0.91%).
Information Technology
- Apple (AAPL): Fell 3% after Trump threatened a 25% tariff on iPhones unless production shifts to the U.S.
- Workday (WDAY): Dropped 12.5%; Q1 revenue and margins beat, but cRPO growth was boosted by short-term contracts. Monitoring tariff impacts on education and international segments.
- Informatica (INFA): Rose 17.5% on acquisition rumors involving Salesforce.
- Intuit (INTU): Up 8.1%; delivered strong FQ3 results, raised FY guidance, and highlighted growth in Credit Karma and TurboTax Live.
- Salesforce (CRM): Dropped 3.6%; Bloomberg reported the company is in talks to acquire Informatica (INFA).
Industrials
- Xerox (XRX): Down 12.2%; slashed its dividend by ~80% amid tariff-related volatility and its pending Lexmark acquisition.
- Copart (CPRT): Declined 11.5%; FQ3 revenue missed expectations. Highlighted tariff-related challenges in parts and repair costs.
Consumer Discretionary
- Deckers (DECK): Dropped 19.9%; faster-than-expected deceleration in HOKA growth and light Q1 guidance flagged. Lacked formal FY guidance due to tariff uncertainties.
- Ross Stores (ROST): Lost 9.9%; despite a Q1 EPS beat, softer Q2 guidance and the withdrawal of FY guidance highlighted profitability pressures from elevated tariffs.
Health Care
- Booz Allen Hamilton (BAH): Fell 16.5%; revenue and EBITDA missed expectations, and FY guidance was below consensus. Cited government policy headwinds.
Materials
- United States Steel (X): Gained 21.2%; announced a partnership with Nippon Steel while affirming its commitment to remaining a U.S.-based company.
Energy
- NuScale Power (SMR): Surged 19.4%; reports indicate Trump plans to sign orders to boost nuclear power using the Wartime Act
Eco Data Releases | Tuesday May 27th, 2025
S&P 500 Constituent Earnings Announcements | Tuesday May 27th, 2025
Data sourced from FactSet Research Systems Inc.
