Stocks Mixed on Trade News and Chip Stock Weakness

The S&P 500 Index ($SPX) (SPY) today is up +0.02%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.35%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.29%.  June E-mini S&P futures (ESM25) are up +0.02%, and June E-mini Nasdaq futures (NQM25) are down -0.23%. 

Stock indexes today are mixed.  Hopes that the US will be close to trade deals with its trading partners is a positive factor for stocks.  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. 

Today’s US economic news was negative for stocks after the Apr Dallas Fed manufacturing survey of general business activity index fell more than expected to a 5-year low.  Also, Nvidia is down -2% to lead chip stocks lower and pressure the Nasdaq 100 after the Wall Street Journal reported that Huawei is getting ready to test an artificial intelligence processor that could replace some Nvidia products.

The US Apr Dallas Fed manufacturing survey of general business activity index fell -19.5 to a 5-year low of -35.8, weaker than expectations of -17.0.

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 9% 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 +0.63%.  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 up +3 ticks.  The 10-year T-note yield is down -2.9 bp to 4.237%.  June T-notes today recovered from early losses and moved higher after the US Apr Dallas Fed manufacturing survey of general business activity index fell more than expected to a 5-year low, a dovish factor for Fed policy. 

T-notes today initially moved lower due to negative carryover from weakness in European government bonds.  Increased corporate bond issuance is also bearish for T-notes as it will 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 +3.7 bp to 2.507%.  The 10-year UK gilt yield is up +2.8 bp to 4.507%.

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.

ECB Governing Council member Rehn said that due to the fallout from US tariffs, “I find it reasonable to assume that there are downside risks to the inflation outlook in the ECB’s March projections.”

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

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, Micron Technology (MU) is down more than -1%.  In addition, ASML Holding NV (ASML) is down -0.98%, Applied Materials (AMAT) is down -0.92%, Advanced Micro Devices (AMD) is down -0.87% and Marvell Technology (MRVL) is down -0.75%.

Defensive consumer staples and food makers are under pressure today.  Colgate-Palmolive (CL) is down more than -2%, and Kraft Heinz (KHC), Conagra Brands (CAG), J M Smucker (SJM), General Mills (GIS), and the Campbell’s Company (CPB) are down more than -1%. 

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 nearly -1% after forecasting Q2 adjusted EPS from continuing operations $4.80 to $4.84, below the consensus of $4.87. 

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.

CG Oncology (CGON) is up more than +34% 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. 

Jack in the Box (JACK) is up more than +4% after Stifel upgraded the stock to buy from hold with a price target of $32.   

Zscaler (ZS) is up more than +1% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $260. 

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.

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).