S&P futures down 0.6% Wednesday morning after US equities gained Tuesday, led by small caps, tech, consumer discretionary, and energy, while cosmetics, pharma, and managed care lagged. Asian markets were mixed, with South Korea up over 1% and Hong Kong down nearly 1%. European markets slipped ~0.3%. Treasuries strengthened, bringing 10-year yields below 4.50%. The dollar weakened 0.4%, with yen strength on firm Japan wage data. Gold rose 0.8%, Bitcoin gained 1.2%, and WTI crude fell 1%.
Market sentiment turned cautious following earnings disappointments, notably from GOOGL, which flagged slowing cloud growth and a major capex ramp. Big tech remains under pressure amid US-China trade tensions, with AAPL reportedly facing a potential antitrust probe in Beijing and EU retaliation likely in response to Trump’s tariff policies. Broader uncertainty over Trump 2.0 policies and growing shutdown risks also weighed on sentiment.
Key economic releases today include ISM services (expected to rise slightly to 54.1) and ADP private payrolls (+150K forecast). Fed speakers include Barkin (9:00), Goolsbee (14:30), Bowman (15:00), and Jefferson (19:30). Later this week, jobless claims, productivity, nonfarm payrolls (+170K expected), and Michigan consumer sentiment will be in focus.
In earnings, GOOGL fell on cloud growth concerns and increased spending, while AMD dropped on a data center miss. EA noted FC bookings returned to growth, SNAP topped revenue, EBITDA, and DAU estimates, and MTCH guided 2025 below expectations. CMG disappointed on comps and guidance, MDLZ missed on organic growth, and FMC dropped on weak guidance amid pricing pressure. Meanwhile, MAT beat and raised guidance despite factoring in tariff headwinds
US equities finished higher on Tuesday, nearly erasing Monday’s losses. The S&P 500 gained 0.72%, with the Nasdaq leading at +1.35% as big tech saw broad gains, particularly the Mag 7 names. Strength was also seen in energy, media, airlines, autos, and China tech, while laggards included cosmetics, pharma, managed care, food, and utilities. Treasuries firmed with a steepening yield curve after Monday’s flattening move. The dollar weakened on major crosses, while the Mexican peso and Canadian dollar saw solid gains. Gold rose 0.7%, closing at a record high. Bitcoin futures fell 2.5%, and WTI crude settled down 0.6%, though off worst levels as Trump reinstated the “maximum pressure” policy on Iran.
Markets bounced after a two-day decline driven by tariff concerns. While US tariffs remain a headwind, Mexico and Canada secured delays, and Trump signaled discussions with China’s Xi “at the appropriate time.” Softer JOLTS job openings data supported Treasuries, easing some stagflation fears. AI and tech stocks found renewed momentum after strong results from Palantir, Infineon, and Spotify. Buyback activity was another positive, with several companies announcing repurchase programs.
On the economic front, JOLTS job openings missed estimates, reversing some of November’s gains, while the quits rate remained little changed. The SF Fed’s Daly noted the economy remains strong and said the Fed is well-positioned on policy. The Treasury’s Q1 borrowing estimate of $815B was slightly below prior expectations. Key upcoming reports include ISM services and ADP private payrolls on Wednesday, jobless claims and unit labor costs on Thursday, and nonfarm payrolls (expected +170K) and Michigan consumer sentiment on Friday.
Company-Specific News by GICS Sector
Information Technology
- Palantir (PLTR) +24.0%: Q4 beat and raised guidance well ahead of consensus, driven by strong US government contracts and 76% y/y growth in commercial revenue. Customer count rose 43% y/y.
- Infineon (IFX) +8.2%: Strong earnings and positive commentary on auto chip demand.
- Fabrinet (FN) -8.2%: Q2 beat but Datacom revenue down 10% y/y due to delayed Nvidia Blackwell shipments.
Communication Services
- Spotify (SPOT) +13.2%: Q4 revenue and gross margins beat; strongest Q4 net adds in history, driven by all regions.
- Fox Corp. (FOXA) +5.2%: Q2 revenue and earnings beat, with strong political ad revenue and sports performance.
Consumer Discretionary
- Ferrari (RACE) +7.1%: Q4 sales beat expectations with strong product mix; FY25 guidance a bit light but seen as conservative.
- Honda (HMC) +2.4%: Reports of a merger dispute with Nissan; Honda wants Nissan as a subsidiary, which Nissan opposes.
- PVH (PVH) -5.3%: Added to China’s “unreliable entity” list amid rising US-China tensions.
Consumer Staples
- PepsiCo (PEP) -4.5%: Q4 core EPS beat, but revenue was light. Weakness in Frito-Lay NA and Quaker NA, with flat beverage sales. Guidance slightly below expectations.
- Clorox (CLX) -7.2%: Beat and raised FY25 organic sales growth but flagged shipment timing issues ahead of an ERP transition.
- Archer-Daniels-Midland (ADM) -5.1%: Q4 in line but weak FY25 EPS outlook due to trade policy uncertainty and soft biofuel demand.
Financials
- PayPal (PYPL) -13.2%: Q4 beat and authorized $15B buyback, but slowing Braintree TPV growth and shrinking margins disappointed investors.
- KKR (KKR) -4.1%: Asset management sector underperformed amid uncertainty over interest rates and financial conditions.
Industrials
- Marathon Petroleum (MPC) +6.7%: Q4 earnings beat, driven by strong refining margins. Q1 guidance suggests a tougher environment with lower throughput.
- Cummins (CMI) +4.4%: Q4 EBITDA and sales beat, with strong data center demand. FY25 guidance solid.
- Woodward (WWD) -1.8%: Q1 EPS beat but revenue slightly below; FY25 guidance raised at the low end.
- Xylem (XYL) +5.2%: Q4 beat with strong water infrastructure orders, EPS guided in line for 2025.
Health Care
- Merck (MRK) -9.1%: Q4 revenue beat, but weak Gardasil sales in China pressured results. FY25 guidance light.
- Regeneron (REGN) +3.2%: Announced its first-ever quarterly dividend and upsized share buyback.
- Illumina (ILMN) -5.3%: Added to China’s “unreliable entity” list, increasing regulatory risks.
Materials
- Axalta Coating Systems (AXTA) +8.3%: Q4 EBITDA beat; FY25 revenue guidance slightly ahead.
- Alcoa (AA) -6.5%: Concerns over aluminum demand and US trade policies.
Utilities
- Energizer Holdings (ENR) -3.3%: Q1 beat but weak Q2 guidance weighed on shares
Eco Data Releases | Wednesday February 5th, 2025
S&P 500 Constituent Earnings Announcements | Wednesday February 5th, 2025
Data sourced from FactSet Research Systems Inc.
