Stocks Supported by Tariff Ruling and Nvidia Earnings

The S&P 500 Index ($SPX) (SPY) today is up +0.46%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.58%.  June E-mini S&P futures (ESM25) are up +0.51%, and June E-mini Nasdaq futures (NQM25) are up +0.63%. 

Stock indexes today are moving higher, with the S&P 500 posting a 1-week high and the Nasdaq 100 posting a 3-month high.  Stocks are climbing today after a court ruling blocked some of President Trump’s import tariffs.  Also, AI and chips stocks are climbing after Nvidia posted stellar earnings results and CEO Huang predicted “exponential growth” for the AI computing market.  Gains in the Dow Jones Industrial are limited as Salesforce tumbled more than -6% after being downgraded at RBC Capital Markets.

Stocks found support today after the US Court of International Trade issued a unanimous ruling late Wednesday that said President Trump wrongfully invoked an emergency ruling to justify his “Liberation Day” tariffs on global goods.  The order applies to Trump’s global 10% flat tariff, elevated rates on China and other countries, and his fentanyl-related tariffs on China, Canada, and Mexico. Other tariffs imposed under different powers, like the Section 232 and Section 301 tariffs, are unaffected and include the tariffs on steel, aluminum, and automobiles.  The court gave the administration 10 days to “effectuate” its order.

Stocks maintained their gains after today’s US economic news knocked T-note yields lower.  The Q1 core PCE price index was revised downward, weekly jobless claims rose more than expected, and Apr pending home sales posted their biggest decline in more than 2-1/2 years, dovish factors for Fed policy.  The 10-year T-note yield is down -3 bp to 4.45%

US weekly initial unemployment claims rose +14,000 to 340,000, showing a weaker labor market than expectations of 230,000.  Weekly continuing claims unexpectedly rose +22,000 to a 3-1/2 year high of 1.919 million versus expectations of a decline to 1.893 million. 

US Q1 GDP was revised upward to -0.2% (q/q annualized) from the previously reported -0.3%.  The Q1 core PCE price index was revised lower to 3.4% q/q from the previously reported 3.5% q/q.

US Apr pending home sales fell -6.3% m/m, weaker than expectations of -1.0% m/m and the largest decline in more than 2-1/2 years.

The markets are discounting the chances at 2% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

The markets this week will focus on any tariff news or signs of new trade deals.  On Friday, Apr personal spending is expected to be up +0.2% m/m, and Apr personal income is expected to be up +0.3% m/m.  Also, the Apr core PCE price index, the Fed’s preferred inflation gauge, is expected to rise +0.1% m/m and +2.5% y/y.  Finally, on Friday, the University of Michigan May consumer sentiment index is expected to be revised upward by +0.2 points to 51.0 from the previously reported 50.8.

Q1 earnings reporting season is winding down.  So far, more than 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest percentage since Q2 of 2024.  Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season.  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 is down -0.17%.  China’s Shanghai Composite closed up +0.70%.  Japan’s Nikkei Stock 225 rallied to a 2-week high and closed up +1.88%.

Interest Rates

June 10-year T-notes (ZNM25) today are up +7 ticks.  The 10-year T-note yield is down -2.8 bp to 4.450%.  June T-notes today recovered from early losses and are moving higher. Short covering emerged in T-notes today after the US Q1 core PCE price index was revised lower, and weekly jobless claims rose more than expected, dovish factors for Fed policy.  Easing inflation expectations are also supportive for T-notes after the 10-year breakeven inflation rate fell to a 2-week low today at 2.32%.

T-notes today initially moved lower on reduced safe-haven demand as stocks rallied sharply after a US trade court ruled the vast majority of President Trump’s global tariffs were illegal.  Also, supply pressures are weighing on T-notes as the Treasury will auction $44 billion of 7-year T-notes later today. 

European government bond yields today are moving lower.  The 10-year German bund yield is down -2.9 bp to 2.525%. The 10-year UK gilt yield is down -5.1 bp to 4.676%.

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

Semiconductor stocks are rallying today, led by a +5% jump in Nvidia (NVDA) after it reported Q1 revenue of $44.06 billion, stronger than the consensus of $43.29 billion.  Also, Advanced Micro Devices (AMD), ON Semiconductor (ON), ASML Holding NV (ASML), Microchip Technology (MCHP), GlobalFoundries (GFS), and Qualcomm (QCOM) are up more than +1%. 

Nordson (NDSN) is up more than +8% to lead gainers in the S&P 500 after reporting Q2 sales of $682.9 million, better than the consensus of $674.8 million, and forecast Q3 sales of $710 million-$750 million, stronger than the consensus of $709.5 million.

Elf Beauty (ELF) is up more than +25% after reporting Q4 net sales of $332.6 million, better than the consensus of $327.4 million, and acquiring Hailey Bieber’s Rhode beauty brand for $800 million. 

Veeva Systems (VEEV) is up more than +18% after reporting Q1 revenue of $759.0 million, stronger than the consensus of $728.1 million, and raised its 2026 revenue forecast to $3.09 billion to $3.10 billion from a previous forecast of $3.04 billion to $3.06 billion, well above the consensus of $3.05 billion. 

Agilent (A) is up more than +3% after reporting Q2 net revenue of $1.67 billion, stronger than the consensus of $1.63 billion, and raised its full-year revenue forecast to $6.73 billion-$6.81 billion from a previous forecast of $6.68 billion-$6.76 billion, above the consensus of $6.73 billion. 

Boeing (BA) is up more than +3% after announcing it will boost the output of its 737 jetliners to 47 per month by the end of this year.

Southwest Airlines (LUV) is up more than +3% after Deutsche Bank upgraded the stock to buy from hold with a price target of $40. 

Best Buy (BBY) is down more than -9% to lead losers in the S&P 500 after cutting its 2026 adjusted EPS estimate to $6.15-$6.30 from a previous estimate of $6.20-$6.60. 

Salesforce Inc (CRM) is down more than -6% to lead losers in the Dow Jones Industrials after RBC Capital Markets downgraded the stock to sector perform from outperform. 

HP Inc (HPQ) is down more than -4% after reporting Q2 adjusted EPS of 71 cents, weaker than the consensus of 80 cents, and cut its full-year adjusted EPS forecast to $3.00-$3.30 from a previous forecast of $3.45-$4.75, well below the consensus of $3.50. 

SentinelOne (S) is down more than -9% after cutting its 2026 revenue forecast to $996 million-$1.00 billion from a previous forecast of $1.01 billion, below the consensus of $1.01 billion.

GE Vernova (GEV) is down more than -3% after Jeffries downgraded the stock to hold from buy, citing valuation.

Hormel Foods (HRL) is down more than -1% after reporting Q2 net sales of $2.90 billion, weaker than the consensus of $2.91 billion. 

Earnings Reports (5/29/2025)

Bath & Body Works Inc (BBWI), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Cooper Cos Inc/The (COO), Costco Wholesale Corp (COST), Dell Technologies Inc (DELL), Elastic NV (ESTC), Gap Inc/The (GAP), Hormel Foods Corp (HRL), Kohl’s Corp (KSS), Marvell Technology Inc (MRVL), NetApp Inc (NTAP), Roivant Sciences Ltd (ROIV), UiPath Inc (PATH), Ulta Beauty Inc (ULTA), Zscaler Inc (ZS).