Market Snapshot:
| Dow | 42215.73 | +117.03 | (0.28%) | | Nasdaq | 19175.86 | +74.93 | (0.39%) | | SP 500 | 5912.17 | +23.62 | (0.40%) | | 10-yr Note |
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| | NYSE | Adv 1866 | Dec 865 | Vol 998 mln | | Nasdaq | Adv 2594 | Dec 1786 | Vol 11.05 bln |
Industry Watch
| Strong: Technology, Health Care, Financials, Real Estate, Utilities, Energy |
| | Weak: Communication Services |
Moving the Market
-- Court of International Trade blocks President Trump's tariffs; U.S. Appeals Court grants White House's request to temporarily reinstate tariffs
-- Better-than-feared results from NVIDIA (NVDA)
-- Month-end flows
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Closing Stock Market Summary
29-May-25 16:25 ET
Dow +117.03 at 42215.73, Nasdaq +74.93 at 19175.86, S&P +23.62 at 5912.17
[BRIEFING.COM] NVIDIA (NVDA 139.18, +4.37, +3.2%) was primed to be the center of the stock market's attention today after it delivered some impressive quarterly results and guidance following yesterday's close. Market participants, though, were forced to divert their attention to a couple of legal rulings regarding the Trump administration's tariff measures and a spate of weaker-than-expected economic data that stirred some growth concerns.
Specifically, the U.S. Court of International Trade got things started with a ruling that President Trump does not have the legal authority to enforce reciprocal tariffs. The White House did not waste any time appealing that ruling, and it became known late in today's trade that the U.S. Court of Appeals granted the White House's request to temporarily reinstate the tariffs.
That ruling keeps the 10% global tariff, the 30% China tariff, and the 25% Canada/Mexico tariffs in place. The court gave the Trump administration until June 9 to respond. What both rulings did, though, was inject more uncertainty into the market that kept overall buying and selling efforts in check.
The same can be said for the second estimate for Q1 GDP, which showed a downward revision for personal spending; jobless claims data that showed the highest level for continuing jobless claims since November 13, 2021; and a 6.3% decline in pending home sales for April.
That collection of reports helped fuel a stark reversal in the Treasury market, which saw the 10-yr note yield and 30-yr bond yield hit 4.53% and 5.03%, respectively, in the overnight trade, with some deficit angst acting as a selling catalyst (the administration has been highlighting the collection of tariffs as a resource for paying down the national debt).
The 10-yr note yield settled today's session at 4.43%, while the 30-yr bond yield backed up to 4.93%, further fortified by a $44 billion 7-yr note auction that was met with strong demand. The U.S. Dollar Index was down 0.5% to 99.39 after being up 0.7% in the overnight trade.
The push lower in yields was not met with a concomitant surge in stock prices, given that growth concerns were behind much of the improvement in the Treasury market. Those concerns were augmented by Best Buy (BBY 66.32, -5.20, -7.3%) cutting its FY26 guidance and Dow component, Salesforce (CRM 266.92, -9.11, -3.3%), posting earnings results that were accompanied by a deceleration in growth for many of its core cloud segments.
Still, NVIDIA's results, and the AI growth optimism that followed them, offered some influential support for the broader market. The S&P 500 traded down to 5,873 at its worst level of the day, but buyers were quick to show up to help it regain a posture above the 5,900 level where it closed.
Ten of the 11 S&P 500 sectors were higher, but none were up more than 1.0%. The real estate sector (+0.9%) led that pack, but it was the information technology sector (+0.6%) that did the heavy lifting. The communication services sector (-0.3%) was the only sector to finish with a loss.
While today's gains were modest, breadth figures convey an otherwise positive bias. Advancers led decliners by a better than 2-to-1 margin at the NYSE and by a nearly 13-to-9 margin at the Nasdaq.
- S&P 500: +0.5% YTD
- Nasdaq: -0.7% YTD
- DJIA: -0.8% YTD
- S&P 400: -3.5% YTD
- Russell 2000: -7.0% YTD
Reviewing today's data:
- Initial jobless claims for the week ending May 24 increased by 16,000 to 240,000 (Briefing.com consensus 230,000), while continuing jobless claims for the week ending May 17 increased by 26,000 to 1.919 million, hitting their highest level since November 13, 2021.
- The key takeaway from the report was the tandem jump in initial and continuing jobless claims, which denotes some increased layoff activity and some increased difficulty in finding a new job after being laid off.
- The second estimate for the Q1 GDP report showed a 0.2% decline in real GDP (Briefing.com consensus -0.3%) versus the 0.3% decline reported in the advance estimate. The GDP Price Deflator was unrevised at 3.7% (Briefing.com consensus 3.7%) following a 2.3% increase in Q4.
- The key takeaway from the report is that it featured a downward revision to personal spending to 1.2% from 1.8% in the advance estimate, underscoring how the tariff uncertainty and inflation angst tempered consumer spending activity.
- April Pending Home Sales -6.3% (Briefing.com consensus -1.1%) versus downwardly revised 5.5% increase (from 6.1%) for March
Tariffs temporarily reinstated with appeals court ruling
29-May-25 15:30 ET
Dow +49.29 at 42147.99, Nasdaq +39.79 at 19140.72, S&P +12.68 at 5901.23
[BRIEFING.COM] It was reported a short time ago that the U.S. Appeals Court granted the White House's request to temporarily reinstate the tariffs. This ruling keeps the 10% global tariff, 30% China tariff, and 25% Canada/Mexico tariffs in place. The court gave the Trump administration until June 9 to respond.
The stock market has not moved much on the news, which may suggest that it is not surprised by the ruling. Ultimately, the appeals court ruling, like the U.S. Court of International Trade's ruling, just reinforces the point that some additional uncertainty about the tariff picture has been injected into the market, sapping the conviction of buyers and sellers in today's session.
The indices are sitting gingerly on modest gains, having held to a narrow trading range during the afternoon session.
Ten of the 11 S&P 500 sectors are higher, with gains ranging from 0.1% to 0.8%. The only loser at this point is the communication services sector (-0.6%).
Trying to stay positive
29-May-25 15:00 ET
Dow +78.79 at 42177.49, Nasdaq +55.80 at 19156.73, S&P +16.96 at 5905.51
[BRIEFING.COM] The major indices are in positive territory but have had a challenging time of it in their bid to extend gains above the unchanged mark. The S&P 500 continues to hang around the 5,900 level, which has been acting as a staging ground of sorts, but for what -- a breakout or a breakdown -- we do not know.
A full overview of today's action, however, reflects a prevailing positive bias so far. Advancers lead decliners by a 2-to-1 margin at the NYSE and by a 4-to-3 margin at the Nasdaq, and 10 of the 11 S&P 500 sectors are in positive territory.
The gains for the sectors, though, are modest at best. The rate-sensitive utilities (+0.8%) and real estate (+0.8%) sectors are the biggest winners, bolstered by the 10-yr note yield's descent from 4.53% in the overnight trade to its current standing of 4.42%.
That reversal has coincided with a reversal in the U.S. Dollar Index, which had been up 0.7% at 100.54 but is now down 0.6% at 99.25 as the euro and yen show some strength against the greenback.
S&P 500 clings to slim gain as Nordson, Estee Lauder rally; Uber slides on Tesla Robotaxi concerns
29-May-25 14:30 ET
Dow -33.26 at 42065.44, Nasdaq -3.39 at 19097.54, S&P +1.74 at 5890.29
[BRIEFING.COM] The S&P 500 (+0.03%) holds a shallow gain, now the only major average in positive territory.
Briefly, S&P 500 constituents Nordson (NDSN 206.61, +10.87, +5.55%), Estee Lauder (EL 68.59, +2.32, +3.50%), and Biogen (BIIB 132.22, +4.69, +3.68%) pepper the top of the standings. NDSN climbs on earnings, while EL benefits from positive commentary from Barclays.
Meanwhile, Uber (UBER 83.63, -4.63, -5.25%) is one of today's worst-performing constituents after Wedbush highlighted Tesla's (TSLA 357.27, +0.37, +0.10%) upcoming robotaxi launch as a long-term threat to its ride-hailing model. With driverless Model Y testing already underway, investors appear concerned about future competition and Uber's limited near-term growth catalysts.
Gold climbs as rate cut bets and inflation fears fuel safe-haven demand
29-May-25 14:00 ET
Dow -19.15 at 42079.55, Nasdaq +35.14 at 19136.07, S&P +8.53 at 5897.08
[BRIEFING.COM] With about two hours to go on Thursday the tech-heavy Nasdaq Composite (+0.18%) is up only 35 points vs. 288 points at today's highs.
Gold futures settled $21.50 higher (+0.7%) at $3,343.90/oz, as investors weighed renewed inflation concerns and expectations of potential Fed rate cuts despite a brief dip following a U.S. court decision blocking President Trump's proposed reciprocal tariffs. Continued geopolitical uncertainty and a softer dollar outlook supported gold's safe-haven appeal heading into key U.S. economic data releases.
Meanwhile, the U.S. Dollar Index is down about -0.6% to $99.28.
HP Inc.'s guidance cut computes to sharp losses for shares as softening demand, tariffs weigh (HPQ)
HP Inc. (HPQ) fell short of 2Q26 EPS expectations, marking its third EPS miss in the past four quarters as the PC, laptop and printer maker faces moderating demand and escalating tariff-related costs, particularly in its Personal Systems segment. Alongside the Q2 earnings shortfall, HPQ also downwardly revised its FY26 EPS guidance to $3.00-$3.30 from its prior outlook of $3.45-$3.75, fueling a sharp selloff in the stock.
The soft guidance is mainly driven by softening demand in the PC market and the anticipation of tariff-induced cost pressures, most notably including the 10% U.S. tariff on Chinese imports. That tariff is significantly raising component and logistics costs for the Personal Systems segment, as reflected by a 1.5 percentage point drop in the segment's operating margin to 4.5%.
- To counter these pressures, HPQ is accelerating supply chain diversification, shifting production to Southeast Asia (e.g., Vietnam and Thailand) and Mexico, while implementing $1.9 bln in annualized cost savings through its Future Ready program and selective price adjustments. Executives expect these measures, including optimized sourcing and operational efficiencies, to fully offset tariff-related costs by 4Q26, though near-term margin pressures and execution risks remain.
- In Q2, the Personal Systems segment achieved net revenue of $9.0 bln, up 8% in constant currency, propelled by a 9% increase in commercial PCs and a 6% rise in total unit shipments, driven by a Windows OS refresh cycle and strong demand for AI-enabled PCs, which HP projects will account for 25% of its PC portfolio by FY26 end.
- In contrast, the Printing segment reported a 3% revenue decline in constant currency to $4.2 bln, with Consumer Printing and Commercial Printing both down 3%, driven by reduced hardware demand and a 5% drop in supplies revenue as customers deferred upgrades. Printing’s operating margin, however, remained robust at 19.5%, up 0.5 percentage points yr/yr, supported by disciplined cost management and a focus on high-margin unit placements.
- From a longer-term perspective, HPQ highlighted its Future of Work Strategy, which aims to position the company for growth by leveraging AI innovation, hybrid work solutions, and operational efficiency. Key components include accelerating AI PC adoption through new product launches like the next-generation AI PC portfolio, enhancing workforce experience platforms to support hybrid work, and integrating AI capabilities via the Humane acquisition to strengthen its ecosystem. The strategy also emphasizes portfolio optimization, process automation, and cost reduction to fund investments in growth areas.
HPQ’s weak FY26 guidance, driven by tariff-induced cost pressures and softening PC demand, underscores near-term profitability risks, but its aggressive supply chain diversification and $1.9 bln Future Ready cost-saving program offer a credible path to mitigate tariff impacts by 4Q26. Meanwhile, the company's focus on AI PCs and hybrid work solutions strengthens its long-term positioning.
NVIDIA charges higher on Q1 beat; robust Data Center growth eases fears about H20 market (NVDA)
NVIDIA (NVDA +5%) is making a strong move higher after the AI chip giant reported EPS upside with its Q1 (Apr) results last night. Revenue jumped 69.2% yr/yr to $44.06 bln, which also was better than expected. Investors also seem pleased with its Q2 (Jul) revenue guidance of $44.10-45.90 bln, which reflects a loss in H20 revenue of approximately $8 bln due to the recent export control limitations. Guidance was a bit light, but we are not sure it's comparable to consensus.
- Another positive was that the H20 inventory write down charge related to export controls was less than expected at $4.5 bln vs prior guidance of $5.5 bln as NVDA was able to reuse certain materials. So, that was positive news. On April 9, the US govt issued new export controls on H20, its data center GPU designed specifically for the China market. Its H20 has been in the market for over a year and does not have a market outside of China.
- Its Data Center segment really stood out in Q1 with revs of $39.1 bln, up 73% yr/yr and 10% sequentially. NVDA said AR workloads have transitioned strongly to inference, and AI factory build outs are driving significant revenue. Importantly, its customers' commitments are firm. Its Blackwell ramp, the fastest in the company's history, drove Data Center revs. Blackwell contributed nearly 70% of Data Center compute revenue in the quarter, with the transition from Hopper nearly complete. NVDA is witnessing a sharp jump in inference demand. OpenAI, Microsoft and Google are seeing a step function leap in token generation.
- Its other major segment is Gaming and AI PC, where revenue was a record $3.8 bln, up 42% yr/yr and 48% sequentially. Strong adoption by gamers, creatives and AI enthusiasts have made Blackwell its fastest ramp ever. Against a backdrop of robust demand, NVDA greatly improved supply and availability in Q1. In Q1, NVDA added to its AI PC laptop offerings, including models capable of running Microsoft's CoPilot+.
- Looking ahead to Q2, NVDA expects Data Center to benefit from the continued ramp of Blackwell, which will be partially offset by a decline in China revenue. On export controls, NVDA noted China is one of the world's largest AI markets and half of the world's AI researchers are based there. The platform that wins China is positioned to lead globally. However, the $50 bln China market is now effectively closed to US industry. China's AI moves on with or without US chips.
Two main things seem to be driving shares higher today. First, and most importantly, its Data Center segment continues its robust growth despite the H20 setback. AI factory build outs are driving significant revenue. Its Blackwell ramp continues unabated, which is helping mitigate an expected meaningful decrease in China Data Center revenue in Q2. Our sense is that the $8 bln revenue impact in Q2 was better than feared. Second, the $4.5 bln H20 charge was less than expected. While issues persist, especially with China, it seems investor sentiment on NVDA is back on the upswing.
Best Buy plunges as weak outlook and tariff headwinds trigger FY26 guidance cut (BBY)
Best Buy (BBY) delivered another quarter of EPS outperformance, driven primarily by strength in higher-margin services, including membership offerings, and healthy demand in computing and mobile phones, fueled by a technology refresh cycle and the launch of AI-enabled PCs. However, this EPS beat is being overshadowed by a downward revision to its FY26 EPS, net sales, and comparable sales guidance reflecting headwinds from weaker consumer demand for big-ticket electronics and the impact of recently implemented tariffs on imports from China and Mexico, which were not factored into the original FY26 guidance issued in 4Q25.
- Enterprise comparable sales in Q1 declined by 0.7%, a step back from the +0.5% growth in 4Q25, marking a return to negative territory and continuing a troubling trend of negative comps in thirteen of the last fourteen quarters. BBY’s Q2 guidance projects comparable sales to be slightly down yr/yr, suggesting ongoing challenges in reversing this decline.
- In Q1, strength was evident in computing and mobile phones (47% of total sales), with domestic comparable sales in this category growing 5.8%, driven by a technology refresh cycle, the introduction of AI PCs, and strong consumer interest in innovative, high-price-point products.
- Conversely, appliances and entertainment (including home theater and gaming) saw continued weakness, attributed to subdued demand for big-ticket discretionary items as inflation-weary consumers prioritize value and delay non-essential purchases, a trend exacerbated by macroeconomic pressures and looming tariff-related price hikes.
- Despite these macro-related headwinds, BBY has maintained relative earnings stability through disciplined cost management and a strategic focus on higher-margin businesses. In Q1, EPS declined by only 4% yr/yr to $1.15, while the domestic gross profit rate edged up 10 bps yr/yr to 23.5%, driven by improved performance in services, particularly membership programs. Operational efficiency also played a critical role, with adjusted SG&A expenses as a percentage of revenue holding steady at 19.6% despite a $109 mln restructuring charge tied to Best Buy Health, reflecting asset impairments and other costs.
- Looking ahead, BBY will focus on its FY26 strategic priorities. which center on three pillars: enhancing omni-channel experiences, scaling new revenue streams like Best Buy Marketplace and Best Buy Ads, and driving operational efficiency to fund investments and offset pressures.
- The omni-channel focus includes leveraging AI to improve search and personalization capabilities across its digital platforms, where 39.5% of domestic revenue is transacted, aiming to boost engagement and conversion rates.
- Best Buy Marketplace, set to launch in the U.S. in mid-2025, will allow third-party sellers to list products, adopting a model akin to Amazon (AMZN) and Walmart (WMT), with in-store returns and phased fulfillment services to broaden assortment and drive incremental revenue.
- Best Buy Ads aims to capitalize on the company’s digital traffic, which saw 20% app growth in Q4, to create a scalable advertising platform.
BBY’s consistent ability to exceed EPS expectations, even amidst persistent sales declines, underscores its operational resilience and strategic focus on high-margin services and cost discipline. However, the downwardly revised FY26 guidance, incorporating tariff impacts and cautious consumer behavior, has weighed on the stock, signaling more challenging quarters ahead.
Abercrombie & Fitch surges despite tepid results/guidance, sentiment was very low (ANF)
Abercrombie & Fitch (ANF +17%) is bouncing back in a big way. The stock has been under pressure in recent months, fueled by very weak back-to-back guidance announcements on January 13 and again in early March. Investors were pleased to see upside results for Q1 (Apr) and in-line revenue guidance for Q2 (Jul) although EPS guidance was weak. It was a similar story for FY26 with lowered EPS guidance, but at least revenue guidance ticked higher to +3-6% from +3-5%.
- Also, its mall-based peer American Eagle (AEO) withdrew guidance on May 14. So, there was definitely some nervousness heading into this report. And while not a great result, the key takeaway is that this report was better than feared. Investors are taking this report as a win in light of the recent ugly guidance.
- ANF saw sales growth across all regions in Q1, with the Americas up 7% on good traffic levels in both stores and digital and this is despite lapping a very robust Q1 last year when regional sales grew 23%. In EMEA, sales grew 12% on top of 19% growth last year with continued strength in the UK and Germany. In APAC, sales grew 5% on top of 10% growth last year, with nice comps in China.
- Same store comps came in at +4%, which was decent but not great. Comps were clearly led by its Hollister brand at +23% vs -10% for its namesake Abercrombie brand. This compares to +24% and +5% in Q4. This was Hollister's eighth consecutive quarter of comp growth. Both AUR and units were up in Q1 and growth was balanced across genders and categories. ANF is excited about Hollister ahead of the summer season.
- At its Abercrombie Brand, results fell short of expectations with comps at -10%. In fairness, Abercrombie was lapping a huge +29% comp last year. Another factor was that Abercrombie was moving through its winter carryover inventory. It also saw softer results in some of the spring categories that produced standout growth in Q1 last year. The brand continues to see good traffic trends.
While ANF's Q1 report and guidance did not blow us away, sentiment was so low coming into this report that a Q1 beat and in-line guidance was seen as a win. That is even despite downside EPS guidance. On a final note, and something to not be overlooked, ANF was a busy buying back stock in recent months with the stock under pressure. In Q1, it repurchased 2.6 mln shares for $200 mln, representing 5% of shares outstanding. That is a huge amount in one quarter and tells us management saw its stock price as undervalued.
Box soars as beat-and-raise Q1 report highlights improving AI-based growth opportunity (BOX)
Box (BOX) is surging to record highs following a solid beat-and-raise 1Q26 earnings report, marking a significant improvement from last quarter's lackluster performance where the company narrowly beat EPS expectations and issued Q1 guidance well below consensus estimates. The upside Q1 EPS result was driven by strong demand for BOX’s AI-driven Intelligent Content Management solutions, improved operating margins of 25.3% (up from guidance of 25.0%), and disciplined cost management, which offset a challenging enterprise spending environment.
- Billings growth of 17% in constant currency and Remaining Performance Obligations (RPO) of $1.469 bln, also up 17% in constant currency, are critical metrics for BOX as they reflect future revenue potential and customer commitment to its cloud content management platform.
- Compared to recent quarters, the 17% billings growth in Q1 is a notable acceleration from Q4's 7% and Q3’s 3% growth, underscoring improving momentum driven by enterprise adoption of BOX’s premium suites. These metrics are key for BOX because they provide visibility into recurring revenue streams and customer retention, critical for a subscription-based SaaS business navigating competitive pressures in the enterprise software market.
- BOX’s growth is significantly catalyzed by the broader AI megatrend, particularly the need for enterprises to unlock value from unstructured data, which constitutes up to 80% of corporate data. BOX’s Intelligent Content Management platform, enhanced by AI integrations like Box AI and partnerships with Microsoft Azure OpenAI, enables businesses to analyze, classify, and derive actionable insights from vast datasets, driving efficiency and innovation. The platform’s ability to securely manage and process unstructured content—such as documents, images, and videos—positions BOX as a critical enabler for enterprises adopting generative AI and automation.
- The company's upbeat Q2 and FY26 guidance, which now calls for EPS of $1.22-$1.26 and revenue of $1.165-$1.170 bln compared to its prior outlook of $1.13-$1.17 and $1.155-$1.160 bln, is driven by sustained demand for AI-powered content management solutions, strong billings growth, and increasing adoption of high-margin suites, which are expected to drive operating margins to 28% for FY26. Management highlighted robust deal activity, including large enterprise contracts and renewals, alongside operational efficiencies from scaled AI deployments, as key factors supporting the raised guidance.
BOX’s Q1 performance and raised guidance reflect accelerating momentum fueled by AI-driven demand, robust billings, and RPO growth, positioning the company to capitalize on the enterprise need for unstructured data management. The strong adoption of its Intelligent Content Management platform and operational discipline signal improving growth prospects for BOX.
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