Market Snapshot
| Dow | 42270.07 | +54.34 | (0.13%) | | Nasdaq | 19113.75 | -62.11 | (-0.32%) | | SP 500 | 5911.69 | -0.48 | (-0.01%) | | 10-yr Note |
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| | NYSE | Adv 1207 | Dec 1558 | Vol 2.09 bln | | Nasdaq | Adv 1755 | Dec 2642 | Vol 9.18 bln |
Industry Watch
| Strong: Consumer Staples, Utilities, Health Care, Communication Services, Materials, Industrials, Real Estate, Financials |
| | Weak: Technology, Energy, Consumer Discretionary |
Moving the Market
-- President Trump says that China violated preliminary trade agreement, suggesting more trade restrictions could be forthcoming; notes in press conference that he hopes to talk to Xi and work things out
-- Month-end flows: S&P 500 +6.2% and Nasdaq +9.9% in May, entering today
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Closing Stock Market Summary
30-May-25 16:25 ET
Dow +54.34 at 42270.07, Nasdaq -62.11 at 19113.75, S&P -0.48 at 5911.69
[BRIEFING.COM] The stock market had a split personality on this final trading day of what was a great month. The morning session was governed by a defensive-minded disposition and some trade angst after President Trump said in a social media post that China had violated the preliminary trade agreement with the U.S. and added, "So much for being Mr. NICE GUY!"
That sent the major indices lower even though the Personal Income and Spending Report for April had some pleasing attributes that included a moderation in inflation and a robust increase in real disposable personal income. The indices dropped to session lows shortly after the start of the New York lunch hour on a Bloomberg report that the U.S. might impose additional technology-related sanctions on China.
The S&P 500 fell to 5,843, down 1.2% for the session, but managed to climb all the way back to positive territory in the afternoon session. It did so, driven by a buy-the-dip trade that has proven successful time and again since the April 7 low and bolstered by the president's acknowledgment in an Oval Office press conference that he will likely talk to President Xi and hopefully work things out.
The latter took the edge off some of the trade angst going into the weekend and presumably triggered some short-covering activity that supported the comeback effort.
The mega-cap cohort was not particularly strong today, but it was instrumental in the afternoon recovery. The Vanguard Mega-Cap Growth ETF (MGK), which had been down 1.5% as the S&P 500 hit its lows for the day, ended the session down 0.2%.
There wasn't a lot of overt strength in the stock market today, other than in individual stocks like Ulta Beauty (ULTA 471.46, +49.67, +11.8%) and Costco (COST 1040.18, +31.44, +3.1%), which reported earnings.
Costco carried the consumer staples sector (+1.2%) to the top of the sector leaderboard, where it held company with the utilities sector (+1.1%). The energy (-0.7%), consumer discretionary (-0.6%), and information technology (-0.4%) sectors were the only losing sectors today.
NVIDIA (NVDA 135.13, -4.06, -2.9%) and the semiconductor stocks came under some increased selling pressure. The Philadelphia Semiconductor Index dropped 2.1%, but to be fair, it was up 14.6% for the month coming into today's trade, placing it well ahead of the S&P 500 (+6.2%), which registered its best month since 2023.
Separately, Treasuries had a fairly stable outing that was accented with a slightly positive bias and shorter-dated securities outperforming longer-dated securities. Month-end rebalancing by pension funds (out of stocks and into bonds) was deemed to be a source of support.
- S&P 500: +0.5% YTD
- DJIA: -0.6% YTD
- Nasdaq: -1.0% YTD
- S&P 400: -3.8% YTD
- Russell 2000: -7.3% YTD
Reviewing today's economic data:
- Personal income increased a robust 0.8% month-over-month in April (Briefing.com consensus 0.3%) following an upwardly revised 0.7% increase (from 0.5%) in March. Personal spending rose 0.2% month-over-month, as expected, following an unrevised 0.7% increase in March. The PCE Price Index was up 0.1% month-over-month, as expected, which left it up a palatable 2.1% year-over-year versus 2.3% in March. The core-PCE Price Index was also up 0.1%, as expected, leaving it up 2.5% year-over-year versus 2.7% in March.
- The key takeaway from the report is manifold: inflation rates are moderating, personal income growth is strong, and the personal savings rate picked up to 4.9% from 4.3% in March, which points to pent-up spending potential that will keep the economy on a growth track in the second quarter.
- The final University of Michigan Index of Consumer Sentiment for May increased to 52.2 (Briefing.com consensus 50.8) from the preliminary reading of 50.8. The final reading for April was also 52.2. In the same period a year ago, the index stood at 69.1.
- The key takeaway from the report is that it ends four consecutive months of plunging declines in sentiment, although consumers still have concerns about their current personal finances and the future, with inflation expectations weighing.
- The May Chicago PMI dropped to 40.5 (Briefing.com consensus 45.0) from 44.6 in April.
- The Advance Intl. Trade in Goods Deficit narrowed to $87.6 billion from -$162.3 billion, Advance Retail Inventories were down 0.1% folliwing a 0.3% decline in March, and Advance Wholesale Inventories were unchanged following a 0.3% increase in March.
Hitting the right note
30-May-25 15:30 ET
Dow +122.27 at 42338.00, Nasdaq -70.03 at 19105.83, S&P +2.43 at 5914.60
[BRIEFING.COM] The stock market has been on a steady rebound march since about 1:00 p.m. ET in another patented buy-the-dip trade. Earlier, the S&P 500 had slipped to 5,843 on reports the U.S. might impose more technology-related sanctions on China, but buyers returned, drawn in by the break of the 5,900 level and a calming remark from President Trump, who said he will talk to President Xi and hopefully work things out.
The latter contained the right semantics for the algorithms, which have presumably underpinned the bullish-minded tape in the afternoon trade.
Most sectors (eight to be exact) are now higher for the day, the CBOE Volatility Index (19.07, -0.11, -0.6%) has gone negative, and breadth figures, while still leaning in favor of decliners at the NYSE and Nasdaq, have narrowed.
Off the lows
30-May-25 15:05 ET
Dow +36.89 at 42252.62, Nasdaq -118.95 at 19056.91, S&P -10.47 at 5901.70
[BRIEFING.COM] The stock market has moved comfortably off its lows for the session, bolstered by President Trump's pronouncement that he is sure that he will talk to President Xi and hopefully work things out. That is an open-ended prospect; nonetheless, market participants liked the softer tone relative to his pre-open exclamation, "So much for being MR. NICE GUY!"
Once again, the S&P 500 is vacillating around the 5,900 level, which has served as a baseline of sorts in this week's trading that has seen the S&P 500 move as high as 5,943 and as low as 5,843.
As of now, the S&P 500 is up 1.7% for the week, which is nice in its own right but entirely a function of Tuesday's rally, when it rallied 2.1% after the president said he would defer the 50% tariff rate for the EU until July 9 to allow more time to negotiate a deal.
The consumer staples sector (+1.4%), led by Costco (COST 1049.6, +40.42, +4.0%) after its earnings report, is the best-performing sector and the only sector up or down at least 1.0%.
S&P 500 slips as Cooper, Lam Research, Eastman drag; Ulta soars on earnings
30-May-25 14:30 ET
Dow +12.75 at 42228.48, Nasdaq -144.21 at 19031.65, S&P -16.48 at 5895.69
[BRIEFING.COM] The S&P 500 (-0.28%) is in second place on Friday afternoon, slightly higher compared to levels from the previous half hour.
Briefly, S&P 500 constituents Cooper (COO 69.00, -10.96, -13.71%), Lam Research (LRCX 80.32, -3.84, -4.56%), and Eastman Chemical (EMN 77.94, -3.56, -4.37%) dot the bottom of the standings. COO slides after lowering its FY25 organic growth outlook despite beating Q2 estimates. Analysts flagged softening demand in vision and fertility markets, with JPMorgan downgrading the stock on concerns the slower growth profile no longer justifies a premium valuation. EMN dips after losing a $375M DoE grant tied to its Longview molecular recycling project, forcing a likely scale-back of the facility. The setback raises concerns about project economics and delays tied to its rPET supply contract with Pepsi (PEP 131.70, -0.22, -0.17%).
Meanwhile, Ulta Beauty (ULTA 470.67, +48.88, +11.59%) is today's top performer following earnings.
Gold slips as safe-haven demand eases, ends May slightly lower on Fed caution, stronger dollar
30-May-25 14:00 ET
Dow -128.11 at 42087.62, Nasdaq -225.25 at 18950.61, S&P -40.17 at 5872.00
[BRIEFING.COM] The tech-heavy Nasdaq Composite (-1.17%) is down 225 points, little changed over the last half hour.
Gold futures settled $28.50 lower (-0.9%) at $3,315.40/oz, ending the month down about -0.1%, as a stronger dollar and cautious Fed tone weighed on sentiment in May. Safe-haven demand also eased amid reduced geopolitical tensions and investor focus shifted to upcoming U.S. inflation data.
Meanwhile, the U.S. Dollar Index is down about -0.1% to $99.27.
Elastic's strong Q4 results undermined by cautious FY26 revenue guidance, triggering selloff (ESTC)
Elastic (ESTC), the provider of a search and observability platform, delivered solid 4Q25 results, surpassing EPS expectations, continuing its consistent trend of beating earnings forecasts. Revenue grew by a healthy 16% yr/yr, also exceeding analysts' estimates, driven by strong adoption of ESTC's AI-driven solutions, particularly within the Elastic Cloud segment, which grew 23% yr/yr to $182 mln. Additionally, improved sales execution targeting high-value enterprise accounts provided another boost. However, these strong results are being overshadowed by ESTC's cautious FY26 revenue guidance of $1.655-$1.670 bln, which fell short of the consensus estimate, raising concerns about future growth potential.
- Coming off an impressive Q3 beat-and-raise report, ESTC had set a high bar for investor expectations. The Q3 performance was fueled by robust enterprise demand for consolidating observability tools on ESTC’s Elasticsearch platform, bolstered by enhanced sales execution following a strategic shift to focus on larger accounts. This shift addressed earlier Q1 sales execution challenges, resulting in a customer net expansion rate of 112% and a total of 1,460 customers with annual contract values (ACV) exceeding $100,000, signaling strong customer loyalty and upselling opportunities.
- The Q3 success, coupled with ESTC’s advancements in generative AI capabilities, such as the Elastic Rerank Model and Cloud Detection and Response integrations, significantly boosted investor sentiment, amplifying the disappointment when FY26 guidance underwhelmed expectations.
- For 1Q26, ESTC provided in-line EPS guidance of $0.41 to $0.43 and revenue guidance of $396 -$398 mln, slightly above expectations, while its FY26 revenue growth forecast of 12-13% missed the mark. The cautious guidance stems from several factors, including macroeconomic uncertainties impacting enterprise spending, a $10 mln sequential headwind from three fewer days in Q4 compared to earlier quarters, and a $1-2 mln foreign exchange impact.
- Additionally, ESTC’s investments in AI innovation and sales initiatives, particularly front-loaded in 1Q26 for events like sales kickoffs, may pressure near-term margins, contributing to the conservative outlook.
- Elastic Cloud revenue, a critical metric for investors, grew 23% yr/yr in Q4, down from 26% growth in Q3, raising some concerns about potential deceleration in cloud adoption. This growth, though still robust, contrasts with prior quarters’ stronger growth rates (e.g., 30% in 1Q25), reflecting possible challenges in scaling cloud deployments amid competitive pressures from other observability and security platforms. Investors are closely monitoring Elastic Cloud’s trajectory, as it represents a key growth driver, accounting for a significant portion of the company’s subscription revenue.
- ESTC's customer metrics remain a bright spot, with the total customer count with ACV greater than $100,000 rising to over 1,510 in Q4, up from 1,460 in Q3 and 1,330 in 4Q24, reflecting a 14% yr/yr increase. This growth is driven by ESTC’s strategic focus on landing and expanding within enterprise and high-potential mid-market accounts, supported by its field segmentation changes initiated at the start of FY25.
ESTC’s Q4 results showcased strong execution, with EPS and revenue beats driven by robust cloud growth and enterprise adoption, yet the stock’s sharp sell-off reflects investor disappointment with cautious FY26 revenue guidance that fell below expectations. Despite near-term macroeconomic headwinds, ESTC’s observability platform remains well-positioned for sustained demand, particularly as enterprises leverage its AI-driven capabilities for generative AI use cases, which could drive long-term growth.
Marvell heads lower despite modest Q1 upside; investors wanted more robust guidance (MRVL)
Marvell (MRVL -6%) is heading lower despite reporting upside with its Q1 (Apr) report last night. The data infrastructure chipmaker reported its typical modest EPS upside. Revenue jumped 63.3% yr/yr to $1.90 bln, which also was slightly better than expected. The Q2 (Jul) guidance was in-line. Its Data Center end market continued to benefit from robust AI demand. In addition, Marvell is seeing ongoing recovery in its Carrier Infrastructure and Enterprise Networking end markets.
- Its Data Center end market, which represented 76% of Q1 sales, posted 76% yr/yr and 5% sequential sales growth to a record $1.44 bln. Growth is being driven by the rapid scaling of its custom AI silicon programs to high volume production, along with robust shipments of its electro-optics products for AI and cloud applications. Marvell expects the momentum to continue in Q2 with mid-single digit sequential growth.
- Marvell continues to see strong tailwinds in AI, including robust capital expenditure plans from hyperscalers, an increasing number of sovereign data center announcements, and an emerging group of hyperscalers further expanding the market.
- Turning to its Enterprise Networking segment, sales grew 16% y/yr to $177.5 mln while Carrier Infrastructure jumped 93% to $138.4 mln. Collectively, EN+CI revenue grew by 14% sequentially, exceeding the midpoint of guidance and reflecting the ongoing recovery in both end markets. Marvell expects EN+CI to grow sequentially in the mid-single digit range in Q2.
- Consumer sales grew 50% yr/yr but fell 29% sequentially to $63.1 mln. Automotive/Industrial was down 2% yr/yr to $75.7 mln.
Overall, investors are disappointed with Marvell's Q1 report and guidance. The numbers were decent, but could have been better. The results were pretty lackluster relative to what we saw from Nvidia's (NVDA) report and its commentary this week. Given the recent stock performance with shares having been roughly cut in half from its January highs, we thought a lot of negativity was priced in, but investors are taking the stock even lower today. We think investors wanted to see more robust Q2 guidance following big reports from data center infrastructure peers NVDA and even Dell (DELL) last night.
Costco defies FX headwinds, leveraging its membership model and digital strength for EPS beat (COST)
Costco's (COST) 3Q25 earnings report showcased a solid recovery from its 2Q25 earnings miss as EPS of $4.28 exceeded expectations, driven by strong comparable sales growth of 8.0% (adjusted for gasoline prices and foreign exchange impacts). Despite persistent foreign exchange (FX) headwinds that continued to pressure EPS in Q3, clipping $0.08 off EPS, COST’s resilient business model, anchored by its value-driven bulk purchasing proposition, enabled the company to overcome these challenges. Furthermore, the company’s ability to maintain competitive pricing and high customer loyalty through its membership model mitigated the adverse effects of currency fluctuations.
- The 8.0% adjusted comparable sales growth in Q3 outperformed expectations of 6.0%, reflecting COST’s competitive edge over peers like Walmart (WMT) and Target (TGT). For 1Q26, WMT and TGT reported comps of +4.3% and (3.8)%, respectively. Key product categories driving COST’s comp growth included its Kirkland Signature private label brand, which outpaced the overall sales growth rate, and food and sundries, which posted mid-to-high single-digit comp growth.
- COST’s e-commerce channel continued to shine, delivering an impressive 15.7% comparable sales growth on an adjusted basis. This surge was driven by increased online penetration, enhanced digital infrastructure, and a broader assortment of high-demand items such as electronics, jewelry, and luggage. Strategic investments in user experience, including faster delivery options and an expanded online-only product portfolio, catered to shifting consumer preferences for convenience. Additionally, COST’s ability to leverage its membership base to drive online engagement further amplified e-commerce growth, positioning the channel as a critical growth driver.
- Membership fee income rose 10.4% yr/yr to $1.24 bln, bolstered by a membership fee increase implemented in the prior year. Despite the hike, COST maintained a stellar renewal rate of 92.7% in the U.S. and Canada, with executive memberships accounting for 47.3% of paid members and driving 73.1% of sales. Paid household member growth remained robust at +6.8%, reflecting the enduring appeal of COST’s value proposition and loyalty-driven model. The fee increase, combined with strong renewal rates and a growing executive membership base, underscores COST’s ability to sustain revenue growth without alienating its customer base.
In conclusion, COST’s Q3 performance highlights its ability to navigate FX headwinds and macroeconomic uncertainty through its resilient membership model, competitive pricing, and strong e-commerce growth. The company’s consistent outperformance in comparable sales relative to peers like WMT and TGT positions it to gain market share, particularly during periods of economic volatility when consumers prioritize value.
Dell trades flat following a Q1 report with a lot of crosscurrents (DELL)
Dell (DELL) is trading roughly flat after reporting Q1 (Apr) results last night. Dell reported its first EPS miss in 12 quarters while revenue grew 5.1% yr/yr to $23.38 bln, a bit better than expected. What really makes up for the EPS miss is huge EPS and revenue upside for Q2 (Jul). With that as context, it was a letdown that Dell only reaffirmed full year revs at $101-105 bln. We would have liked to have seen a guidance increase given the Q2 upside.
- Growth continues to be driven by its Infrastructure Solutions Group (ISG) segment, where revenue rose 12% yr/yr to $10.32 bln with 9.7% segment operating margin vs 8.0% last year. Server and networking revenue jumped 16% yr/yr to a record $6.32 bln. Dell enjoyed exceptionally strong demand for AI-optimized servers. It booked $12.1 bln in orders in Q1, surpassing the entirety of shipments in all of FY25. It shipped $1.8 bln of AI servers in Q1, leaving a backlog of $14.4 bln.
- AI momentum continues to remain strong. However, Dell expects variability in timing, choices around technology, and the nonlinear nature of demand to persist. In traditional servers, revenue increased double digits, however, demand moderated compared to Q4 (Jan). Additionally, Dell saw a lower mix of North America and traditional server, which is a higher-margin geography. In storage, revenue increased 6% yr/yr to $4.0 bln.
- Turning to Client Solutions Group (CSG), segment revenue grew 5% yr/yr to $12.51 bln with 5.2% op margin vs 6.5% last year. Commercial revenue grew 9% to $11.05 bln, while consumer revenue was down 19% to $1.46 bln. Dell saw a strong performance across small and medium business and large enterprise. In consumer, Dell said the demand environment remains soft and profitability remains challenged.
- In terms of the Q2 guidance, in ISG, Dell expects to ship roughly $7 bln of AI servers as it fulfills some large deals. Dell is expecting sub-seasonal performance in traditional server and storage as customers evaluate their IT spend for the year given the dynamic macro environment. In CSG, Dell expects the PC refresh cycle to continue as the install base upgrades to new devices, resulting in improved profitability sequentially.
- In terms of the full year and its decision to reaffirm revenue guidance, Dell is optimistic on its portfolio and ability to execute. However, it wants to be thoughtful on how customers think through their IT spend relative to the macro environment. Dell expects ISG to grow high-teens, driven by over $15 bln in AI server shipments and continued growth in traditional server and storage. And it expects CSG to grow low- to mid-single digits.
Overall, this was a mixed quarter. On the positive side, the Q2 guidance was quite robust as Dell expects to deliver on some large deals. However, the Q1 miss and some of the language on the call was a bit tepid. In particular, demand has softened for its traditional servers and there was some weakness in North America, a high margin geography. Also, just reaffirming full year revenue guidance after the big upside Q2 was a letdown. There were a lot of crosscurrents in its Q1 report.
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.
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