The S&P 500 Index ($SPX) (SPY) today is up +0.34%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.57%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.20%.  

Stock indexes today are mixed. In US economic news that showed weekly initial unemployment claims were unchanged, and April retail sales rose more than expected, easing recession concerns.  

T-note yields declined on a weaker-than-expected US Apr PPI report and the largest decline in six months for Apr manufacturing production.  Comments today from Fed Chair Powell were neutral for stocks as he reiterated that the Fed is fully committed to its 2% inflation target.

US weekly initial unemployment claims were unchanged at 229,000, close to expectations of 228,000.

The US Apr final-demand PPI report of -0.5% m/m and +2.4% y/y was weaker than expectations of +0.2% m/m and +2.5% y/y.

US Apr retail sales rose +0.1% m/m, stronger than expectations of no change, although Apr retail sales ex-autos rose +0.1% m/m, weaker than expectations of +0.3% m/m.

The US May Empire manufacturing survey general business conditions index unexpectedly fell -1.1 to -9.2, weaker than expectations of an increase to -8.0.

The US May Philadelphia Fed business outlook survey general conditions index rose +22.4 to -4.0, stronger than expectations of -11.0.

US Apr manufacturing production fell -0.4% m/m, weaker than expectations of -0.3% m/m and the biggest decline in 6 months.

The US May NAHB housing market index unexpectedly fell -6 to a 1-1/2 year low of 34, weaker than expectations of no change at 40.

Fed Chair Powell said policymakers are considering changes to the framework that guides monetary policy decisions, including how they think about shortfalls in US employment and approach to their inflation target. He added, “Anchored inflation expectations are critical to everything we do, and we remain fully committed to the 2% target today.”

This week, the markets will focus on tariff news and the prospects for additional trade deals.  On Friday, Apr housing starts are expected to be up +2.9% m/m to 1.363 million, while Apr building permits are expected to be down -1.2% m/m to 1.450 million.  Also, on Friday, the preliminary May University of Michigan US consumer sentiment index is expected to rise +1.2 points to 53.4. 

The markets are discounting the chances at 8% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

Q1 earnings reporting season is winding down.  So far, over 80% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest since Q2 of 2024.  Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season.  Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.  

Overseas stock markets today are lower.  The Euro Stoxx 50 is down -0.11%.  China’s Shanghai Composite closed down -0.68%.  Japan’s Nikkei Stock 225 closed down -0.98%.

Interest Rates

June 10-year T-notes (ZNM25) today are up +9 ticks.  The 10-year T-note yield is down -4.8 bp to 4.489%.  June T-notes today are climbing on signs of easing price pressures due to the weaker-than-expected US Apr PPI report.  Also, today’s -2% plunge in crude oil prices is knocking inflation expectations lower, a bullish factor for T-notes.  T-notes added to their gains after US Apr manufacturing production fell by the most in six months, and the May NAHB housing market index unexpectedly fell to a 1-1/2 year low, bolstering speculation for Fed rate cuts.

European government bond yields today are moving lower.  The 10-year German bund yield is down -5.8 bp at 2.641%. The 10-year UK gilt yield is down -3.8 bp to 4.675%.

Eurozone Q1 GDP was revised lower to +0.3% q/q from the previously reported +0.4% q/q.

Eurozone Mar industrial production rose +2.6% m/m, stronger than expectations of +2.0% m/m and the largest increase in 4-1/3 years.

UK Q1 GDP rose +0.7% q/q and +1.3% y/y, stronger than expectations of +0.6% q/q and +1.2% y/y. 

ECB Vice President Guindos said that trade tensions, high funding costs, and weak economic growth could pose headwinds to Eurozone companies and households and that increased defense spending could pressure public finances.

Swaps are discounting the chances at 91% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Chip stocks are falling today as they give back some of this week’s advance.  Micron Technology (MU), ARM Holdings Plc (ARM), Marvell Technology (MRVL), ON Semiconductor Corp (ON), and Advanced Micro Devices (AMD) are down more than +2%.  Aksi, Nvidia (NVDA), GlobalFoundries (GFS), Broadcom (AVGO), and Microchip Technology (MCHP) are down more than -1%.

UnitedHealth Group (UNH) is down more than -18% to lead health insurance stocks lower and lead losers in the S&P 500 and the Dow Jones Industrials after the Wall Street Journal reported the company is under criminal investigation for possible Medicare fraud.  Also, Humana (HUM) is down more than -7%, and Molina Healthcare (MOH) is down more than -6%.  In addition, Centene (CNC) is down -4%, and Cigna Group (CI) and Elevance Health (ELV) are down more than -2%. 

Energy producers are under pressure today with the price of WTI crude down more than -2%.  As a result, Diamondback Energy (FANG) and Haliburton (HAL) are down more than -3%.  Also, Occidental Petroleum (OXY), Devon Energy (DVN), and Schlumberger (SLB) are down more than -2%.  In addition, Baker Hughes (BKR), ConocoPhillips (COP), Valero Energy (VLO), Exxon Mobil (XOM), and Phillips 66 (PSX) are down more than -1%. 

Fiserv (FI) is down more than -11% after CFO Hau said that Q1 growth had headwinds from factors including conversion last year of non-Clover clients to Clover and that headwind is seen increasing somewhat in Q2.

DXC Technology (DXC) is down more than -7% after forecasting 2026 revenue of $12.18 billion to $12.44 billion, well below the consensus of $12.52 billion.

AppLovin (APP) is down more than -3% on signs of insider selling after an SEC filing showed Director Billings sold more than $4 million of shares on Monday. 

Walmart (WMT) is down more than -2% despite reporting better-than-expected Q1 adjusted EPS after warning that tariffs and economic turbulence will lead to price increases. 

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

Foot Locker (FL) is up more than +85% after Dick’s Sporting Goods agreed to buy the company for $24 a share in cash or about $2.4 billion.

Defensive food and beverage makers are moving higher today due to weakness in the broader market.  Modelez International (MDLZ) and Coca-Cola (KO) are up more than +2%.  Also, PepsiCo (PEP), J M Smucker (SJM), Keurig Dr Pepper (KDP), the Campbell’s Company (CPB), Hershey (HSY), Molson Coors Beverage (TAP), and Tyson Foods (TSN) are up more than +1%.

Steris Plc (STE) is up more than +8% to lead gainers in the S&P 500 after reporting Q4 life sciences revenue of $149.5 million, stronger than the consensus of $147.2 million. 

Cisco Systems (CSCO) is up more than +6% to lead gainers in the Dow Jones Industrials after reporting Q3 revenue of $14.15 billion, stronger than the consensus of $14.05 billion and raised its full-year revenue forecast to $56.5 billion-$56.7 billion from a previous estimate of $56.0 billion-$56.5 billion.

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

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).