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Mixed Market Close as Trade Deal Hopes Boost Dow and S&P 500

The S&P 500 Index ($SPX) (SPY) closed on Monday with a slight gain of +0.06%. The Dow Jones Industrials Index ($DOWI) (DIA) increased by +0.28%, while the Nasdaq 100 Index ($IUXX) (QQQ) saw a minor dip of -0.03%. In pre-market activity, June E-mini S&P futures (ESM25) rose by +0.03%, but June E-mini Nasdaq futures (NQM25) fell by -0.18%.

Market Movements and Economic Indicators

Stock indexes showed a mixed performance on Monday. The S&P 500 reached a 3-1/2 week high, while the Dow climbed to a 1-1/2 week high. Positive sentiment stemmed from expectations that the U.S. may soon finalize trade deals with its partners. U.S. Treasury Secretary Bessent mentioned the administration is pursuing bilateral trade agreements with 17 key partners, excluding China. Additionally, lower Treasury note yields contributed positively to equities after the 10-year T-note yield fell to a 2-1/2 week low of 4.204%. Investors are also watching for earnings announcements from major tech firms this week, including Microsoft, Meta Platforms, Amazon.com, and Apple.

However, Monday’s economic news brought some negative indicators. The April Dallas Fed manufacturing survey reported a significant decline in the general business activity index, dropping to a 5-year low of -35.8, worse than expectations of -17.0. Nvidia led a downturn in chip stocks, falling more than -2%, following a Wall Street Journal report on Huawei’s plans to test a new AI processor potentially aimed at replacing some Nvidia products.

Upcoming Economic Data

This week, market attention will focus on U.S. tariffs and trade negotiations. On Tuesday, the Conference Board’s April consumer confidence index is predicted to drop by -5.3 points to 87.6. Wednesday’s data is expected to show Q1 GDP growth of +0.4% (quarter-over-quarter annualized) and a +3.0% increase in the Q1 core PCE price index. Also due on Wednesday are March figures for personal spending (+0.6% month-over-month), personal income (+0.4% month-over-month), and the March core PCE price index (expected steady at +2.2% year-over-year). Microsoft and Meta Platforms are set to report their quarterly earnings on Wednesday. On Thursday, the April ISM manufacturing index is expected to decline -1.0 to 48.0, along with earnings results from Amazon.com and Apple. Friday’s highlights include April nonfarm payrolls (projected +130,000) and the unemployment rate (expected unchanged at 4.2%). Average hourly earnings for April are forecasted to increase +0.3% month-over-month and +3.9% year-over-year.

The markets are currently pricing in only a 9% probability of a -25 basis point rate cut after the May 6-7 FOMC meeting.

Q1 Earnings Season Insights

As the Q1 earnings reporting season progresses, data from Bloomberg Intelligence indicates a consensus expectation of +6.7% year-over-year earnings growth for S&P 500 stocks, down from earlier estimates of +11.1% in November. Additionally, full-year 2025 corporate profit growth for the S&P 500 is now projected at +9.4%, reduced from previous forecasts of +12.5% in January.

Global Market Overview

Overseas stock markets also displayed mixed results on Monday. The Euro Stoxx 50 rose to a 3-week high, closing up +0.33%, while China’s Shanghai Composite declined by -0.29%. Japan’s Nikkei 225 advanced to a 4-week high, finishing up +0.38%.

Interest Rates and Bond Markets

June 10-year T-notes (ZNM25) settled on Monday with a gain of +12.5 ticks. The 10-year T-note yield decreased by -2.3 basis points to 4.212%. T-note prices rebounded from initial losses, reaching a 2-1/2 week high. A decline in the Dallas Fed manufacturing index served as a dovish signal for Fed policy.

Initially, T-notes faced downward pressure due to weaknesses in European government bonds. Moreover, increasing corporate bond issuance is contributing to bearish sentiment for T-notes, as dealers may short T-notes to hedge against an anticipated $35 billion in new securities expected this week.

European government bond yields rose on Monday. The yield on a 10-year German bund hit a 1-week high of 2.525%, closing up +5.2 basis points at 2.521%. The 10-year UK gilt yield also increased, up +3.0 basis points to 4.509%.

ECB Governing Council member Villeroy de Galhau noted that the ECB has potential to lower interest rates, considering that the trade war initiated by U.S. tariffs may impact the global economy without affecting inflation trends in Europe. Rehn, another ECB member, indicated that downside risks to inflation are reasonable due to the effects of U.S. tariffs. Swaps currently reflect a 100% probability of a -25 basis point rate cut by the ECB at the June 5 policy meeting.

Notable U.S. Stock Movements

AbbVie (ABBV) was a standout, soaring over +3% after raising its full-year adjusted EPS estimate to a range of $12.09 to $12.29 from a previous estimate of $11.99 to $12.19.

Boeing (BA) also saw gains, climbing more than +2% after Bernstein upgraded the stock to outperform from market perform, with a price target of $218.

In biotech, CG Oncology (CGON) jumped more than +24% after reporting promising results from a late-stage trial of its bladder cancer therapy. ON Holding (ONON) gained over +3% following a Citigroup upgrade to buy from neutral, with a price target of $60. Jack in the Box (JACK) climbed over +4% after Stifel upgraded the stock to buy from hold, targeting $32. Zscaler (ZS) rose over +1% after an upgrade to outperform by BNP Paribas Exane, targeting $260.

Conversely, Nvidia (NVDA) faced a steep decline, dropping more than -2% as the leading chip maker, pressured by news regarding Huawei’s AI developments. Micron Technology (MU) and ARM Holdings Plc also reported losses of over -1%. Additional declines were seen in ASML Holding NV (ASML), down -0.67%, Qualcomm (QCOM), down -0.63%, and Applied Materials (AMAT), down -0.50%.

Defensive sectors, particularly consumer staples and food manufacturers, experienced pressure, with Colgate-Palmolive (CL) and Kraft Heinz (KHC) both closing down more than -2%. Conagra Brands (CAG) also faced declines as the markets adjusted.

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Market Update: Key Stocks Decline Post Earnings Reports

J M Smucker (SJM), Keurig Dr Pepper (KDP), and the Campbell’s Company (CPB) all experienced declines of over 1%. This downward trend was noticeable across several sectors.

Leading the losses in the S&P 500 was Erie Indemnity (ERIE), which fell more than 4%. This drop followed an alarming 11% plunge last Friday after the company reported a Q1 EPS of $2.65, significantly lower than the consensus estimate of $3.19.

Coinbase Global (COIN) saw a decline of over 2%, as Compass Point Research made a significant decision to double-downgrade the stock from buy to sell, setting a price target of $180.

Similarly, Chipotle Mexican Grill (CMG) dropped over 1% following a downgrade by Argus Research, which shifted its rating from buy to hold.

Roper Technologies (ROP) also faced adversity as its forecast for Q2 adjusted EPS from continuing operations was set between $4.80 to $4.84, falling short of the consensus estimate of $4.87.

Upcoming Earnings Reports (4/29/2025)

Several companies are scheduled to report earnings, including A O Smith Corp (AOS), Altria Group Inc (MO), American Tower Corp (AMT), Arch Capital Group Ltd (ACGL), Booking Holdings Inc (BKNG), BXP Inc (BXP), Caesars Entertainment Inc (CZR), Coca-Cola Co/The (KO), Corning Inc (GLW), CoStar Group Inc (CSGP), Ecolab Inc (ECL), Edison International (EIX), Entergy Corp (ETR), Equity Residential (EQR), Essex Property Trust Inc (ESS), Expand Energy Corp (EXE), Extra Space Storage Inc (EXR), Fair Isaac Corp (FICO), First Solar Inc (FSLR), General Motors Co (GM), Hilton Worldwide Holdings Inc (HLT), Honeywell International Inc (HON), Incyte Corp (INCY), Kraft Heinz Co/The (KHC), Labcorp Holdings Inc (LH), Mondelez International Inc (MDLZ), ONEOK Inc (OKE), PACCAR Inc (PCAR), PayPal Holdings Inc (PYPL), Pfizer Inc (PFE), PPG Industries Inc (PPG), Regency Centers Corp (REG), Regeneron Pharmaceuticals Inc (REGN), Royal Caribbean Cruises Ltd (RCL), S&P Global Inc (SPGI), Seagate Technology Holdings PL (STX), Sherwin-Williams Co/The (SHW), Starbucks Corp (SBUX), Sysco Corp (SYY), United Parcel Service Inc (UPS), Veralto Corp (VLTO), Visa Inc (V), Xylem Inc/NY (XYL), and Zebra Technologies Corp (ZBRA).

On the date of publication, Rich Asplund did not hold any positions in the securities mentioned in this article. The information here is intended for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.