Stocks Climb on Hopes of US Trade Deals

The S&P 500 Index ($SPX) (SPY) today is up +0.44%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.71%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.25%.  June E-mini S&P futures (ESM25) are up +0.41%, and June E-mini Nasdaq futures (NQM25) are up +0.26%. 

Stock indexes today are mildly higher on hopes that the US will be close to trade deals with its trading partners.  US Treasury Secretary Bessent said the Trump administration is working on bilateral trade deals with 17 key trading partners, not including China. The markets await earnings from four Magnificent Seven technology stocks this week, including Microsoft, Meta Platforms, Amazon.com, and Apple. 

Higher T-note yields today are a negative factor for stocks, with the 10-year T-note yield up +4.4 bp to 4.280%.  Also, Nvidia is down -2% to lead chip stocks lower after the Wall Street Journal reported that Huawei is getting ready to test an artificial intelligence processor that could replace some Nvidia products.

Market attention this week will focus on news of US tariffs and trade negotiations.  On Tuesday, the Conference Board Apr consumer confidence index is expected to fall -5.3 points to 87.6.  On Wednesday, Q1 GDP is expected at +0.4% (q/q annualized), with the Q1 core PCE price index up +3.0%.  Wednesday also brings Mar personal spending (expected +0.6% m/m), Mar personal income (expected +0.4% m/m), and the Mar core PCE price index (expected unchanged m/m and +2.2% y/y).  Finally, Microsoft and Meta Platforms release their quarterly earnings on Wednesday. On Thursday, the Apr ISM manufacturing index is expected to fall -1.0 to 48.0.  Thursday also brings earnings results from Amazon.com and Apple. Friday brings Apr nonfarm payrolls (expected +130,000) and the Apr unemployment rate (expected unchanged at 4.2%). Also, Apr average hourly earnings are expected to climb +0.3% m/m and +3.9% y/y.   

The markets are discounting the chances at 8% for a -25 bp rate cut after the May 6-7 FOMC meeting.

Q1 earnings reporting season is in full swing.  According to data compiled by Bloomberg Intelligence, the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500 stocks, down from expectations of +11.1% in early November.  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 mixed.  The Euro Stoxx 50 rose to a 3-week high and is up +0.61%.  China’s Shanghai Composite closed down -0.29%.  Japan’s Nikkei Stock 225 climbed to a 4-week high and closed up +0.38%.

Interest Rates

June 10-year T-notes (ZNM25) today are down -5 ticks.  The 10-year T-note yield is up +4.4 bp to 4.280%.  June T-notes today are posting mild .losses, pressured by negative carryover from weakness in European government bonds.  Increased corporate bond issuance will also prompt bond dealers to short T-notes to hedge against as much as $35 billion in new securities expected to be priced this week. 

European government bond yields today are moving higher.  The 10-year German bund yield is up +4.0 bp to 2.510%.  The 10-year UK gilt yield is up +3.4 bp to 4.513%.

ECB Governing Council member Villeroy de Galhau said the ECB has room to lower interest rates as the trade war triggered by US tariffs will weigh on the global economy but won’t affect the inflation trend in Europe.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Boeing (BA) is up more than +2% to lead gainers in the Dow Jones Industrials after Bernstein upgraded the stock to outperform from market perform with a price target of $218.

Zscaler (ZS) is up more than +2% to lead gainers in the Nasdaq 100 after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $260. 

CG Oncology (CGON) is up more than +32% after reporting positive results in a late-stage trial of its experimental therapy for bladder cancer. 

ON Holding (ONON) is up more than +2% after Citigroup upgraded the stock to buy from neutral with a price target of $60. 

LyondellBasell Industries NV (LYB) is up more than +2% after Fermium Research LLC upgraded the stock to buy from hold with a price target of $70.

Jack in the Box (JACK) is up more than +3% after Stifel upgraded the stock to buy from hold with a price target of $32.   

Revvity (RVTY) is up more than +1% after raising its full-year revenue forecast to $2.83 billion to $2.87 billion from a previous forecast of $2.80 billion to $2.85 billion.

Nvidia (NVDA) is down more than -2% to lead chip makers lower after the Wall Street Journal reported that Huawei is getting ready to test an artificial intelligence processor that could replace some Nvidia products.  Also, Marvell Technology (MRVL), ARM Holdings Plc (ARM), ASML Holding NV (ASML), and Micron Technology (MU) are down more than -1%.  In addition, Broadcom (AVGO) is down -0.90%, and Applied Materials (AMAT) and Advanced Micro Devices (AMD) are down -0.50%.

Eli Lilly (LLY) is down more than -1% after HSBC double-downgraded the stock to sell from buy with a price target of $700, saying the company’s risk-reward “is not attractive.”

Roper Technologies (ROP) is down more than -1% after forecasting Q2 adjusted EPS from continuing operations $4.80 to $4.84, below the consensus of $4.87. 

Domino’s Pizza (DPZ) is down more than -2% after reporting Q1 revenue of $1.11 billion, weaker than the consensus of $1.12 billion.

Earnings Reports (4/28/2025)

Alexandria Real Estate Equities (ARE), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Cincinnati Financial Corp (CINF), Domino’s Pizza Inc (DPZ), F5 Inc (FFIV), Nucor Corp (NUE), NXP Semiconductors NV (NXPI), Revvity Inc (RVTY), Roper Technologies Inc (ROP), SBA Communications Corp (SBAC), Teradyne Inc (TER), Universal Health Services Inc (UHS), Waste Management Inc (WM), Welltower Inc (WELL).