May 23rd, 2025
Market Performance:
- A reignited trade war, this time with iPhone maker Apple, left stocks tumbling in early trading on Friday. Major indexes, which had been flat, dove more than 1%.
- Stocks sunk about 90 minutes before the open after President Trump threatened 25% tariffs on Apple’s (AAPL) iPhone and 50% tariffs on European Union products.
- Treasury yields went sharply lower, and the dollar also went down. The 10-year note yield initially fell nearly 10 basis points to below 4.46% before clawing back to nearly 4.5%.
Economic Takeaways:
- New home sales for April came out this morning. Sales of newly built single-family homes rose in April, pointing to continued buyer engagement during the spring homebuying season, the latest data from the U.S. Census Bureau and Department of Housing and Urban Development (HUD) suggests. New residential sales increased 10.9 percent from March to a seasonally adjusted rate of 743,000 units. That’s also a 3.3 percent boost over the April 2024 pace of 719,000 units. Analysts expected a seasonally adjusted annual rate of 679,000, a significant retreat from 724,000 in March.
- Bitcoin (/BTC) dipped more than 2% from recent all-time highs in early futures trading. The coin hit a new record high on Thursday.
- As of early Friday, futures trading indicated just a 5% chance of a Fed rate cut in June, and 29% in July, according to the CME FedWatch Tool.
- The U.S. dollar fell to its lowest since 2023.
- Oil edged higher as U.S-Iran talks had no conclusive progress.
Trump Takes on Apple with Tariff Threat
The markets were rattled early Friday morning when President Trump set his eyes on another giant US corporation in his ongoing trade war.
This time the President threated iPhone maker Apple (AAPL) with increased duties if the company does not make iPhones in the US.
He also attacked the European Union and said he was recommending a “straight 50%” tariff on EU-imported products beginning next weekend.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote on Truth Social. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Memorial Day Breather
Markets will be closed to celebrate Memorial Day this Monday.
Investors will however have their eyes on Federal Reserve Chairman Jerome Powell on Sunday, when he delivers baccalaureate remarks at Princeton University, his alma mater. While it is unlikely that Powell says anything about policy or the economy, investors will be paying attention to overseas stocks to see how Tuesday trading may fare.
“The Fed is not coming to the rescue,” said Schwab’s Jones. “There have been a lot of speeches and interviews from Fed officials over the past few weeks. Each has reiterated the view that policy is on hold for a while, so expectations for Fed rate cuts this year have declined.”
Top Gainers:
Merus N.V. (MRUS)
Oklo, Inc. (OKLO)
Uranium Energy Corp. (UEC)
NuScale Power Corp. (SMR)
Regecenn Biosciences (RGC)
NexGen Energy, Ltd. (NXE)
Cameco Corp. (CCJ)
United States Steel Company (X)
Intuit, Inc. (INTU)
Top Losers:
Deckers Outdoor Corp. (DECK)
MINISO Group Holdings (MNSO)
Booz Allen Hamilton Holding Corp. (BAH)
Pony AI, Inc. (PONY)
Workday, Inc. (WDAY)
Copart, Inc. (CPRT)
Ross Stores, Inc. (ROST)
Burlington Stores, Inc. (BURL)
LiveRamp Holdings, Inc. (RAMP)
Notables:
- Apple dropped 3.2% ahead of the open after President Trump threatened it with 25% tariffs on iPhones not made in the U.S. It was not long ago that Trump said he “had a little problem with Tim Cook.”
- Other tech stocks including Nvidia (NVDA) and Palantir (PLTR) fell along with Apple. The former fell 2.5% and the latter lost 1.6% ahead of the open.
- Amazon (AMZN) also fell after Trump’s threat against Apple. The e-commerce giant sources many of the products sold on its site from China. Shares fell 3%.
- Autodesk (ADSK) moved up 2.5% in pre-market trading after the software firm beat earnings expectations and forecast an outlook for the second quarter that topped analysts’ estimates.
- Tesla (TSLA) fell nearly 1.9% ahead of the open. The new tax bill would end the EV tax credit.
- Ross Stores (ROST) sank 12% early today despite earnings that beat expectations. Investors remained cautious as the company withdrew its annual guidance, noting that more than half the goods it sells originate in China and it expects pressure on profitability if tariffs remain at elevated levels.
- Intuit (INTU) surged 8% ahead of the open after providing earnings guidance that exceeded analysts’ expectations.
- Humana (HUM) and UnitedHealth Group (UNH) were two health stocks that were moving higher in Friday early trading. Both saw rebounds after falling sharply yesterday.
- Solar stocks were feeling the burn again on Friday after investors embraced that the Republican budget deal would cut credits for alternative energy. First Solar (FSLR) slipped another 0.9% before the open after dropping 4.3% yesterday.
Major Data and Tech Earnings Next Week
- A major data point to watch next week is the April Personal Consumption Expenditures (PCE) price index, which will provide a fresh update on inflation.
- The main earnings event in the tech world will be on Wednesday when AI giant Nvidia (NVDA) becomes the last Magnificent Seven member to share earnings.
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