S&P futures are down 1.6% Monday after US equities closed lower Friday, capping a down week despite a strong January. Asian and European markets are sharply lower, with Taiwan down over 3.5% and Japan and South Korea off more than 2.5%. Treasury yields are rising on stagflation concerns, the dollar is up 1%, Bitcoin futures are down 7.2%, and WTI crude is up 2.4%.
Markets are under pressure amid trade war fears after Trump’s tariffs were more aggressive than expected, with little indication of a near-term resolution. Higher yields and a stronger dollar add to tightening financial conditions.
This week brings key macro data, including ISM manufacturing today, JOLTS and factory orders Tuesday, ISM services and ADP payrolls Wednesday, and nonfarm payrolls Friday, expected at 170K after December’s 256K gain.
In corporate news, Apple scrapped its AR glasses project, Meta may move its incorporation to Texas, Costco avoided a strike, and Unilever is considering a New York IPO for its ice cream unit. United Airlines denied merger talks, ADM is preparing layoffs, and Triumph Group will go private in a $3B deal.
US equities closed lower on Friday, with the Dow down 0.75%, S&P 500 down 0.50%, Nasdaq off 0.28%, and Russell 2000 down 0.86%. Stocks ended near their session lows after early strength, with all major indices except the Dow finishing the week in the red. Despite positive earnings from big tech, AAPL slipped post-earnings. Sector laggards included energy, apparel, household products, drug stores, retail, homebuilders, auto suppliers, and food stocks, while semiconductors, biotech, aerospace & defense, exchanges, asset managers, grocers, and media outperformed.
Treasuries were mostly weaker with some curve steepening, though yields ended lower for the week. The dollar index rose 0.5%, gold fell 0.4% after hitting a record high on Thursday, Bitcoin futures dropped 3.0%, and WTI crude dipped 0.3% amid uncertainty around possible US tariff exemptions.
Tariff headlines weighed on sentiment late in the session. Earlier speculation that the administration might phase in tariffs or offer broad exemptions was denied, with the White House confirming tariffs on Canada and Mexico would take effect on Saturday. Just before market close, Trump added that tariffs on chips, oil, gas, steel, aluminum, and copper would be imposed by Feb. 18. The situation remains fluid, with speculation that these measures could be used as leverage in negotiations.
On the data front, December core PCE inflation was in line with expectations at 2.8% year-over-year. Personal income was in line, while personal spending rose 0.7% month-over-month, beating consensus of 0.5%. The Q4 Employment Cost Index came in slightly below expectations, while the January Chicago PMI exceeded forecasts. Fed Governor Bowman struck a hawkish tone, stating that inflation progress remains insufficient and that current rates may not be exerting meaningful restraint. Chicago Fed President Goolsbee was more optimistic about inflation but signaled support for a slower pace of easing as rates approach neutral.
Next week brings a packed economic calendar, including ISM manufacturing/services reports and key labor market data, with JOLTS job openings and ADP employment leading up to Friday’s nonfarm payrolls report. A post-FOMC ramp in Fed commentary is also expected, highlighted by Fed Governor Waller’s speech on Thursday.
Company-Specific News by GICS Sector
Information Technology
- Viavi Solutions (VIAV) +20.5%: FQ2 earnings, revenue, and margins topped estimates, with strong NSE orders from service providers and network equipment manufacturers. Next-quarter guidance exceeded consensus, with signs of stabilization in multiple markets.
- Atlassian (TEAM) +14.9%: Fiscal Q2 beat high expectations; FY25 guidance raised above consensus. Strength in Cloud and Data Center, paid seat expansion, and record high-value contracts drove results.
- Intel (INTC) -4.0%: Beat earnings on revenue pull-ins but issued a much weaker-than-expected outlook.
- KLA (KLAC) -2.8%: Beat estimates and raised guidance, highlighting NAND strength. Despite solid results, shares slipped.
Communication Services
- Charter Communications (CHTR) +2.6%: Q4 adjusted EBITDA and revenue exceeded estimates, with lower capex and stronger-than-expected video net add declines. Free cash flow significantly outperformed expectations.
- Gen Digital (GEN) -3.5%: Q3 earnings and revenue slightly ahead, but Cyber Safety bookings slowed due to a national public data breach.
Consumer Discretionary
- Deckers Outdoor (DECK) -20.5%: Q3 earnings and revenue exceeded forecasts, but implied Q4 guidance fell short. Elevated investor expectations, limited UGG inventory, and tough HOKA comparisons contributed to the decline.
- Boot Barn (BOOT) -7.8%: Q3 earnings and revenue met pre-announcement, but Q4 guidance disappointed. Analysts noted potential conservatism in guidance.
- Tesla (TSLA) -1.5%: Positive commentary on FSD progress and upcoming product launches was overshadowed by continued auto revenue and ASP declines.
Health Care
- AbbVie (ABBV) +4.7%: Q4 earnings and revenue exceeded estimates, led by strong immunology results. FY25 EPS guidance midpoint came in above expectations. Raised long-term sales outlook for Skyrizi and Rinvoq.
- ResMed (RMD) -8.3%: Q2 EPS and revenue beat, but gross margins came in softer due to FX headwinds. US device growth of +12% YoY fell short of consensus, impacted by GLP-1 awareness.
- HCA Healthcare (HCA) -2.4%: Big Q4 earnings beat on better underwriting due to lower-than-expected catastrophe losses but flagged net unfavorable reserve development related to asbestos and environmental liabilities.
Industrials
- WW Grainger (GWW) -5.6%: Q4 revenue and EPS missed estimates on weak demand. FY25 guidance also fell below expectations.
Materials
- Eastman Chemical (EMN) +7.5%: Q4 earnings and EBIT significantly exceeded expectations. The company flagged strength in specialty AM and AFP segments and issued better-than-feared guidance.
- PPG Industries (PPG) -6.0%: Q4 EPS and revenue missed; weak Architectural and Industrial Coatings weighed on results. FY25 guidance was below consensus. Analysts see a choppy 1H25, with growth weighted toward the second half.
- Olin Corp (OLN) -8.9%: Q4 revenue beat, but Q1 EBITDA guidance fell well short. Management expects weaker chlorine and caustic soda volumes and weak global epoxy demand.
Energy
- Baker Hughes (BKR) +3.5%: Q4 earnings and revenue exceeded estimates, with strong LNG orders and another major gas infrastructure contract. 2025 EBITDA growth expectations remain strong.
- Chevron (CVX) -4.6%: Q4 EPS missed while revenue beat. Refining posted its first loss in four years, while US upstream earnings rose YoY. The company guided for 6% annual production growth through 2026 but reported record oil production due to increased Permian Basin output.
Consumer Staples
- Colgate-Palmolive (CL) -4.6%: Q4 EPS beat, but revenue fell short due to lower private label pet volumes and European weakness. FY25 sales guidance was below expectations, and gross/operating margins missed forecasts.
Financials
- Hartford Financial (HIG) -2.4%: Big Q4 earnings beat, driven by better underwriting and lower catastrophe losses. However, results were dampened by unfavorable reserve development tied to asbestos and environmental claims.
Eco Data Releases | Monday February 3rd, 2025
S&P 500 Constituent Earnings Announcements | Monday February 3rd, 2025
Data sourced from FactSet Research Systems Inc.
