May 27th, 2025
Market Performance:
- A recovery rally led the U.S. markets to surge on Tuesday as investors absorbed President Trump’s pause on EU tariff hikes. The proposed 50% tariff on imports from the European Union will be delayed until July 9 instead of June 1.
- The Dow Jones Industrial Average jumped about 1.5%, or over 600 points, while the benchmark S&P 500 shot up 1.9%. The tech-heavy Nasdaq Composite led the averages to the upside, rising around 2.3%.
- The S&P 500 index (SPX) remains slightly above its 200-day moving average of 5,773. It fell under that intraday Friday before rebounding.
- European markets were trading higher following the positive trade developments and an improvement in German consumer confidence.
- Asian markets were also mostly higher overnight as reports indicated that Japan might issue less debt.
- Investors seem encouraged by the rebound in consumer confidence, which rose in May. This followed five straight months of decline.
- Bond yields opened the day lower, with the 10-year Treasury yield falling to 4.48%.
- The price of Bitcoin (BTC) was $110015.04 today as of 11:46 am EDT.
Economic Takeaways:
- On the economic front, headline durable goods orders fell by 6.3% in April, which was better than an expected decline of 8.1%. Excluding transportation equipment, durable goods orders rose by 0.2% in April. A flat reading had been expected.
- Over the weekend, President Trump cited constructive talks with EU Commission president Ursula von der Leyen as the reason for extending the tariff deadline,
- Treasury auctionsbegan again today after yields spiked last week on disappointing demand for a 20-year bond auction.
- As of early Tuesday, futures trading indicated just a 2% chance of a Fed rate cut in June, and 25% in July, according to the CME FedWatch Tool.
Consumer Confidence Rebounds
Consumer confidence surprisingly rebounded in May after five straight months of declines as President Trump pulled back on aggressive tariffs on China.
The latest index reading from the Conference Board was 98 in May, well above the 85.7 seen in April and the 87.1 economists had expected. The expectations index surged off its 13-year low seen in April, reaching 72.8 in May, far above the 55.4 in the month prior. This marked the largest month-over-month increase for that metric since May 2009.
The Conference Board in this month’s survey, also showed that consumers are saving for future expenses, dipping more into their savings right now than before and postponing some major purchases.
Notables
- Apple (AAPL) shares were up 1.6% early today but is still down eight straight sessions. That’s the longest stretch since January 2022, according to Bloomberg. Shares are down more than 20% this year.
- Nvidia jumped 2.5% ahead of the open as traders anticipate the company’s earnings report tomorrow.
- Other tech stocks went higher along with Nvidia including Palantir (PLTR), Dell (DELL), Super Micro Computer (SMCI), CoreWeave (CRWV) and Marvell Technology (MRVL).
- Informatica (INFA) soared 6.3% in pre-market trading after Reuters reported that Salesforce (CRM) is going to buy the data management platform for roughly $8 billion.
- Tesla (TSLA) added 2.3% ahead of the open and were up about 6% in afternoon trading. The gain came despite Tesla’s cars falling 49% year over year in Europe in April. Traders may be feeling optimistic that CEO Elon Musk is planning to be back full-time. “Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” Musk said in a social media post.
- Newmont (NEM) fell 2.4% ahead of the open on the heels of gold falling 2.2%.
- Boeing (BA) rose 1.5% in pre-market trading after a Barron’s report revealed that the U.S. Department of Justice reached a non-prosecution agreement over the 737 MAX crashes of 2018 and 2019.
- Deckers Outdoor (DECK) jumped back 1.4% in pre-market trading after falling nearly 20% last Friday after traders were disappointed by the company’s Q1 guidance. Deckers didn’t provide full year 2025 guidance due to what it called “macroeconomic uncertainty” but the fiscal first quarter forecast came up short of Wall Street’s estimates.
What to Watch Tomorrow
Tomorrow’s earnings from Nvidia (NVDA) will mark the last of the Magnificent Seven earnings season. Analysts expect revenue and earnings growth to remain strong but down from the previous quarter. Investors are concerned about the company’s guidance and will look for a closer look to see how AI chip demand is doing.
“In my view, the keys for Nvidia remain the overall pulse on AI-chip demand and whether any competitive threats from custom chips are taking market share,” said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.
Salesforce (CRM) and HP (HPQ) also report tomorrow along with Nvidia.
Retailers Dick’s Sporting Goods (DKS), Abercrombie & Fitch (ANF), and Macy’s (M) will be reporting as well.
We will also hear from Federal Reserve officials who are expected to hold rates steady in line with previous direction.
What to Watch This Week
On Thursday the Q1 GDP second estimate will be out.
Earnings will arrive from Best Buy (BBY), Foot Locker (FL), Kohl’s (KSS), Costco (COST), Dell (DELL), Marvell Technology (MRLV), Ulta Beauty (ULTA), and Gap (GAP).
Friday investors can look for April PCE prices, April Core PCE prices, and the May University of Michigan Consumer Sentiment- Final.
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