Mixed Market Trends as Economic Indicators Show Variation

The S&P 500 Index ($SPX) (SPY) is up +0.34%, and the Dow Jones Industrials Index ($DOWI) (DIA) increased by +0.57%. In contrast, the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.20%. Today’s stock indexes present a mixed picture. Recent US economic data indicated that weekly initial unemployment claims remained unchanged, while April retail sales rose unexpectedly, alleviating some recession fears.

In the bond market, Treasury note yields decreased following a weaker-than-anticipated US April PPI report and the largest drop in manufacturing production in six months. Federal Reserve Chair Jerome Powell’s comments today were neutral for stocks, as he reaffirmed the Fed’s commitment to a 2% inflation target.

US weekly initial unemployment claims were steady at 229,000, aligning closely with the expected 228,000. The April final-demand PPI report showed a decline of -0.5% m/m and an increase of +2.4% y/y, underperforming expectations of +0.2% m/m and +2.5% y/y.

April retail sales recorded a rise of +0.1% m/m, surpassing the no-change expectation, but retail sales excluding autos also rose +0.1% m/m, which was below the forecast of +0.3% m/m.

The US May Empire manufacturing survey found the general business conditions index unexpectedly dropped -1.1 to -9.2, against expectations for an increase to -8.0. Conversely, the May Philadelphia Fed business outlook survey indicated a significant rise of +22.4 to -4.0, outperforming the anticipated -11.0.

Manufacturing production in April fell -0.4% m/m, worse than expected and marking the most significant decline in six months. Furthermore, the May NAHB housing market index unexpectedly dropped -6 to a 1.5-year low of 34, diverging from expectations for no change at 40.

During his remarks, Powell noted that policymakers are evaluating potential adjustments to monetary policy frameworks, particularly regarding US employment shortfalls and their inflation target approach. He underscored the importance of “anchored inflation expectations” and reiterated the Fed’s commitment to the 2% target.

This week, market attention will shift toward tariff news and potential trade deals. On Friday, housing starts for April are projected to rise +2.9% m/m to 1.363 million, while building permits are expected to decline -1.2% m/m to 1.450 million. Additionally, the preliminary May University of Michigan consumer sentiment index is anticipated to increase by +1.2 points to 53.4.

Market participants are currently pricing only an 8% chance for a -25 bp rate cut at the upcoming Federal Open Market Committee meeting on June 17-18. The Q1 earnings reporting season is drawing to a close. Over 80% of S&P 500 companies have reported results, with 77% exceeding estimates—the highest percentage since Q2 of 2024. Earnings growth for Q1 has soared to +13.1%, well ahead of the +6.6% forecast at the season’s launch. Full-year 2025 corporate profits for S&P 500 companies are now projected to rise +9.4%, a drop from earlier expectations of +12.5% in January.

International markets are experiencing downturns today. The Euro Stoxx 50 has decreased by -0.11%. China’s Shanghai Composite closed down -0.68%, while Japan’s Nikkei 225 fell -0.98%.

Interest Rates

June 10-year T-notes (ZNM25) are up +9 ticks, with the 10-year T-note yield dropping -4.8 bp to 4.489%. T-notes are gaining amid indications of easing price pressures linked to the weaker-than-expected US April PPI report. Additionally, crude oil prices have fallen by over -2%, lowering inflation expectations, which is positive for T-notes. The decrease in US manufacturing production—the largest in six months—and the unexpected decline in the May NAHB housing market index are also fueling speculation about potential Fed rate cuts.

European government bond yields are also trending lower, with the 10-year German bund yield down -5.8 bp to 2.641%, and the 10-year UK gilt yield reduced by -3.8 bp to 4.675%. In recent revisions, Eurozone Q1 GDP was lowered to +0.3% q/q from the previously reported +0.4% q/q. Meanwhile, March industrial production in the Eurozone saw an increase of +2.6% m/m, surpassing expectations of +2.0% m/m, marking the largest gain in over four years. UK Q1 GDP rose +0.7% q/q and +1.3% y/y, exceeding forecasts of +0.6% q/q and +1.2% y/y.

European Central Bank Vice President Luis de Guindos mentioned that trade tensions, high funding costs, and sluggish economic growth could hinder Eurozone companies and households. He noted that heightened defense spending might also pressure public finances.

Current swaps indicate a 91% probability for a -25 bp rate cut by the ECB at their policy meeting on June 5.

US Stock Movers

Chip stocks are underperforming today, with significant declines from Micron Technology (MU), ARM Holdings Plc (ARM), Marvell Technology (MRVL), ON Semiconductor Corp (ON), and Advanced Micro Devices (AMD)—all falling over -2%. Nvidia (NVDA), GlobalFoundries (GFS), Broadcom (AVGO), and Microchip Technology (MCHP) also dropped more than -1%.

UnitedHealth Group (UNH) is down more than -18%, leading health insurance stocks lower, following a Wall Street Journal report of a criminal investigation related to potential Medicare fraud. Humana (HUM) and Molina Healthcare (MOH) have also seen declines of more than -7% and -6%, respectively. Centene (CNC) is down -4%, and both Cigna Group (CI) and Elevance Health (ELV) are down more than -2%.

Energy stocks are facing pressure due to a more than -2% drop in WTI crude prices. Consequently, Diamondback Energy (FANG) and Halliburton (HAL) are down more than -3%. Other energy companies, including Occidental Petroleum (OXY), Devon Energy (DVN), and Schlumberger (SLB), have also seen falls exceeding -2%.

Fiserv (FI) is down more than -11% after CFO statements indicated Q1 growth challenges related to the conversion of non-Clover clients to Clover, with expected continuing headwinds in Q2.

DXC Technology (DXC) declined over -7% after projecting 2026 revenue between $12.18 billion and $12.44 billion, lower than the consensus of $12.52 billion.

AppLovin (APP) fell more than -3% amid signs of insider selling, as an SEC filing revealed that Director Billings sold over $4 million worth of shares on Monday.

Walmart (WMT) decreased by more than -2%, despite better-than-expected Q1 adjusted earnings per share, due to warnings of impending price raises from tariffs and economic instability.

CrowdStrike Holdings (CRWD) is down more than -1% after Mizuho Securities downgraded the stock from outperform to neutral.

Notably, Foot Locker (FL) surged over +85% following Dick’s Sporting Goods’ agreement to acquire the company for $24 per share, totaling about $2.4 billion.

Defensive food and beverage companies are seeing gains amidst market weakness, with Modelez International (MDLZ) and Coca-Cola (KO) up more than +2%. Additional companies such as PepsiCo (PEP), J M Smucker (SJM), Keurig Dr Pepper (KDP), Campbell’s Company (CPB), Hershey (HSY), Molson Coors Beverage (TAP), and Tyson Foods (TSN) are up more than +1%.

Steris Plc (STE) leads S&P 500 gainers, rising more than +8% after reporting Q4 life sciences revenue of $149.5 million, exceeding the consensus of $147.2 million. Cisco Systems (CSCO) is up over +6%, following Q3 revenue of $14.15 billion, surpassing expectations and raising its full-year forecast to $56.5 billion-$56.7 billion from $56.0 billion-$56.5 billion.

Deere & Co (DE) is up more than +4% after reporting Q2 net sales and revenues of $12.76 billion, outpacing the consensus of $12.42 billion.

Upcoming Earnings Reports (5/15/2025)

Advanced Drainage Systems Inc (WMS), Applied Materials Inc (AMAT), Birkenstock Holding Plc (BIRK), Cava Group Inc (CAVA), Deere & Co (DE), Doximity Inc (DOCS), Globant SA (GLOB), Take-Two Interactive Software (TTWO), Walmart Inc (WMT).

On the date of publication, Rich Asplund did not hold positions in any securities mentioned in this article. All information and data in this article is provided solely for informational purposes. For additional 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 the opinions of Nasdaq, Inc.