# Market Update: Mixed Performance Amid Trade and Earnings Uncertainty
The S&P 500 Index ($SPX) (SPY) is down 0.37% today, while the Dow Jones Industrials Index ($DOWI) (DIA) has edged up 0.07%. The Nasdaq 100 Index ($IUXX) (QQQ) is down 0.47%. Additionally, June E-mini S&P futures (ESM25) have declined by 0.36%, and June E-mini Nasdaq futures (NQM25) are down 0.46%.
Today’s stock indexes are trading lower, influenced by uncertainty regarding U.S. trade policies. President Trump announced on Sunday that he does not plan to speak with Chinese President Xi Jinping soon. However, he mentioned that potential trade deals with some U.S. partners might emerge this week. Stock indexes did recover slightly from their lowest points after the unexpected rise in the U.S. April ISM services index indicated economic strength.
Energy producers are facing downward pressure, with WTI crude oil prices dropping over 2% to a three-and-a-half-week low. This decline follows OPEC+’s decision on Saturday to increase crude production by 411,000 bpd in June, raising concerns about a global oil surplus. Saudi Arabia has also hinted at more production increases to mitigate prices and address overproduction by certain OPEC+ members, including Kazakhstan and Iraq.
The U.S. April ISM services index showed an unexpected rise of 0.8 to 51.6, contradicting forecasts which anticipated a drop to 50.2. The prices-paid sub-index also climbed, reaching a two-and-a-half-year high of 65.1, exceeding the expected figure of 61.4.
Upcoming Economic Data
This week will focus heavily on tariffs and possible adjustments to U.S. trade policy. On Tuesday, the March trade deficit is projected to widen to $136.7 billion. Then, on Wednesday, the Federal Open Market Committee (FOMC) is expected to maintain its federal funds target range at 4.25%-4.50%. Investors will closely monitor post-FOMC comments from Fed Chair Powell for insights into future Fed policies. Thursday will bring weekly initial unemployment claims as well as data on Q1 nonfarm productivity (anticipated at 0.7%) and Q1 unit labor costs (expected to rise by 5.2%).
The markets currently assign only a 2% chance for a 25 basis-point rate cut following Wednesday’s FOMC meeting.
Quarterly Earnings Performance
The Q1 earnings reporting season is underway. According to Bloomberg Intelligence, the consensus for year-over-year earnings growth for S&P 500 stocks has been adjusted down to 6.7%, from the initial prediction of 11.1% made in November. Of the 332 S&P 500 companies that have reported, 78% have surpassed expectations. Full-year 2025 corporate profits for the S&P 500 are now estimated to grow by 9.4%, down from 12.5% predicted in early January.
International markets have also seen declines today. The Euro Stoxx 50 is down 0.05%, while China’s Shanghai Composite is closed for the Labor Day holiday. Japan’s Nikkei Stock 225 is also closed for Children’s Day.
Interest Rate Movements
On the rates side, June 10-year T-notes (ZNM25) are down 5 ticks, pushing the 10-year T-note yield up 2.7 basis points to 4.336%. Today’s T-note prices fell to a one-week low after the rise in the ISM services index amplified inflation concerns. Observers are cautious ahead of Wednesday’s FOMC decision, expecting a less dovish tone. Additionally, T-notes are facing pressure from supply issues, as the Treasury begins its quarterly refunding with a $58 billion auction of 3-year T-notes, part of a $125 billion total auction this week.
Despite the stock slump, T-notes are benefiting from some safe-haven demand along with support from the performance of 10-year German bunds.
European government bond yields have also decreased today. The yield on the 10-year German bund is down 0.7 basis points to 2.526%, while the 10-year UK gilt yield is not traded due to the May Day holiday in the UK.
Investor Confidence and ECB Expectations
The Eurozone May Sentix investor confidence index rose 11.4 points to -8.1, which is better than the expected -11.5. Swaps indicate a 97% chance of a 25 basis-point rate cut from the ECB at their policy meeting on June 5.
Stock Movers Today
Energy stocks, including Apa Corp (APA) and Occidental Petroleum (OXY), are under significant pressure today, both down more than 3% as WTI crude oil hits a low. Other affected companies include ConocoPhillips (COP), Diamondback Energy (FANG), and Exxon Mobil (XOM), which are all down over 2%.
Media stocks are also declining following President Trump’s announcement of a potential 100% tariff on films produced overseas. Netflix (NFLX), Paramount Global (PARA), and others have all seen declines of over 1%.
Tyson Foods (TSN) has seen a sharp drop of more than 10% after releasing Q2 sales of $13.07 billion, falling short of the $13.12 billion consensus estimate.
ON Semiconductor (ON) leads declines in the Nasdaq 100, down more than 7% despite favorable Q1 revenue results, as Q2 margin forecasts fall below expectations.
Zimmer Biomet Holdings (ZBH) decreased over 9% after lowering its full-year EPS estimate to $7.90-$8.10 from $8.15-$8.35.
Apple (AAPL) is down more than 3%, leading losses in the Dow Jones Industrials, impacted by a new debt offering. Berkshire Hathaway (BRK.B) has also seen a drop of over 4% following CEO Buffett’s announcement of plans to step down by the end of the year.
In contrast, EQT Corp (EQT) has seen an increase of over 3% after UBA upgraded the stock to ‘buy’ with a price target of $64.
Howard Hughes Holdings (HHH) is up more than 4% after securing a $900 million investment from Pershing Square Capital for 9 million shares. Freshpet (FRPT) also reported better than expected Q1 sales, leading to an increase of over 3%.
Axsome Therapeutics (AXSM) is up more than 5%, boosted by better-than-expected cash equivalents. Wendy’s (WEN) gained more than 2% after JPMorgan upgraded it to overweight with a price target of $15.
Earnings Reports Scheduled for 5/5/2025
Upcoming earnings reports will include Clorox Co (CLX), Coterra Energy Inc (CTRA), Cummins Inc (CMI), Diamondback Energy Inc (FANG), Ford Motor Co (F), Henry Schein Inc (HSIC), Loews Corp (L), ON Semiconductor Corp (ON), Palantir Technologies Inc (PLTR), Realty Income Corp (O), Tyson Foods Inc (TSN), Vertex Pharmaceuticals Inc (VRTX), and Williams Cos Inc (WMB).
On the date of publication, Rich Asplund did not hold any positions in the securities mentioned. All information in this article is for informational purposes only.
