US Markets Show Slight Gains with Tech Stocks Leading the Way

The S&P 500 Index ($SPX) (SPY) is up +0.06%, while the Dow Jones Industrials Index ($DOWI) (DIA) gained +0.14%, and the Nasdaq 100 Index ($IUXX) (QQQ) increased by +0.19%. Additionally, June E-mini S&P futures (ESM25) rose +0.07%, and June E-mini Nasdaq futures (NQM25) advanced +0.16%.

Today’s stock indexes are slightly higher, with the Nasdaq 100 achieving a 2-1/2 month high. Strength in chip manufacturers is boosting the broader market. The Trump administration is expected to sign agreements allowing Saudi Arabia and the UAE greater access to advanced AI chips. Companies such as Nvidia, Advanced Micro Devices, and Amazon.com are investing in projects like data centers and AI infrastructure. On Tuesday, the Commerce Department announced it will rescind the AI diffusion rule introduced by President Biden. The Trump administration aims to revise semiconductor export regulations, potentially negotiating individual agreements with various countries.

Mortgage Applications and Market Focus

US MBA mortgage applications have increased by +1.1% for the week ending May 9. The purchase mortgage sub-index rose +2.3%, while the refinancing mortgage sub-index fell by -0.4%. The average 30-year fixed-rate mortgage climbed +2 basis points, reaching 6.86% from 6.84% the previous week.

This week, markets will be attentive to tariff developments and the potential for new trade agreements. On Thursday, April retail sales are projected at +0.1% month-over-month (m/m), with retail sales excluding autos at +0.3% m/m. Additionally, April’s Producer Price Index (PPI) final demand is expected to increase by +0.2% m/m and +2.5% year-over-year (y/y), with April PPI excluding food and energy anticipated at +0.3% m/m and +3.1% y/y. Manufacturing production for April is expected to decline by -0.4% m/m. Looking ahead to Friday, April housing starts are predicted to rise by +3.1% m/m to 1.365 million, while April building permits are expected to decrease by -1.2% m/m to 1.450 million. The preliminary May University of Michigan US consumer sentiment index is expected to rise by +1.1 points to 53.3.

The markets currently assign an 8% probability to a -25 basis point rate cut following the FOMC meeting set for June 17-18.

Earnings Season and Overseas Markets

The Q1 earnings reporting season is winding down, with over 80% of S&P 500 companies having reported results. Of those, 77% have exceeded estimates, marking the highest rate since Q2 of 2024. Earnings growth for Q1 is currently at +13.1%, surpassing the +6.6% that was anticipated at the start of the season. Full-year 2025 corporate profits for the S&P 500 are now projected to grow by +9.4%, a drop from the earlier forecast of +12.5% issued in January.

International stock markets are showing a mixed performance. The Euro Stoxx 50 is down -0.15%. China’s Shanghai Composite reached a 1-3/4 month high, closing up +0.86%. Meanwhile, Japan’s Nikkei 225 finished down -0.14%.

Interest Rates

June 10-year T-notes (ZNM25) are up +2 ticks today, with the yield on the 10-year T-note declining by -1.2 basis points to 4.487%. T-notes are rising, benefiting from the strength in 10-year German bunds. However, T-notes fell from their peak after the US 10-year breakeven inflation rate reached a 6-week high of 2.361%, despite a -1% drop in WTI crude oil prices.

European government bond yields are mixed today. The 10-year German bund yield decreased from a 1-month high of 2.694%, now at 2.678%. Conversely, the 10-year UK gilt yield has increased to a 1-month high of 4.709%, rising by +3.5 basis points to 4.706%.

Swaps are pricing in an 88% chance of a -25 basis point rate cut by the ECB at its policy meeting on June 5.

US Stock Movers

Chip stocks continue their upward trend, lifting the overall market today. Advanced Micro Devices (AMD) increased by over +7%, leading gains in the Nasdaq 100, while ARM Holdings Plc (ARM) rose more than +5%. Nvidia (NVDA) gained over +3%, and Marvell Technology (MRVL) saw an increase of more than +1%.

Health insurance stocks are rebounding, with UnitedHealth Group (UNH) up more than +3% and Molina Healthcare (MOH) rising over +2%. Other insurers, such as Cigna Group (CI), Elevance Health (ELV), and Humana (HUM), also experienced gains exceeding +1%.

Super Micro Computer (SMCI) surged more than +18%, extending Tuesday’s +15% rally after DataVolt, a Saudi Arabia-based data center company, announced a multi-year partnership with them.

Tesla (TSLA) rose more than +2% following reports that the company plans to begin shipping components from China to the US for Cybercab and Semi truck production later this month.

Exelixis (EXEL) jumped over +19% after reporting Q1 total revenue of $555.4 million, significantly above the consensus expectation of $495.6 million, and raising its full-year revenue forecast to $2.25 billion-$2.35 billion, surpassing the previous estimate of $2.15 billion-$2.25 billion.

Dynatrace (DT) increased more than +3% after posting Q4 revenue of $445.2 million, ahead of the consensus forecast of $435.2 million. The company also projected 2026 revenue between $1.95 billion and $1.97 billion, exceeding the consensus estimate of $1.93 billion.

Regeneron Pharmaceuticals (REGN) has seen a +1% rise after Citigroup upgraded the stock from neutral to buy with a target price of $700.

Meanwhile, gold mining stocks are down today, with gold prices on COMEX falling more than -1% to a 1-month low. AngloGold Ashanti Plc (AU) dropped more than -6%, and Newmont (NEM) and Gold Fields Ltd (GFI) fell over -3%.

American Eagle Outfitters (AEO) is down over -5% after withdrawing its fiscal year 2025 guidance due to macroeconomic concerns.

Cboe Global Markets (CBOE) is down more than -2% following a double downgrade by Morgan Stanley, changing its rating from overweight to underweight with a target price of $215.

Loar Holdings (LOAR) fell more than -8% after shareholders announced plans to sell nine million shares in a one-day offering expected to price after Wednesday’s close. D.A. Davidson downgraded the stock from neutral to underperform, setting a price target of $21.

Target (TGT) is down more than -1% after Oppenheimer reduced its price target from $150 to $130.

Consolidated Edison (ED) is down more than -1% after KeyBanc Capital Markets downgraded the stock to underweight with a target price of $90.

Earnings Reports (5/14/2025)

Cisco Systems Inc (CSCO), DXC Technology Co (DXC), Dynatrace Inc (DT), Millrose Properties Inc (MRP), New Fortress Energy Inc (NFE), and STERIS PLC (STE) are scheduled to report.

On the date of publication, Rich Asplund did not have positions in any of the securities mentioned in this article. All information and data are for informational purposes only. Please view the Barchart Disclosure Policy for more information.

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