Markets Climb as Big Tech Drives Weekly Gains

 US Weekly Recap: Dow +3.41%, S&P 500 +5.27%, Nasdaq +7.15%, Russell 2000 +4.46%US Weekly Recap: Dow +1.60%, S&P +1.88%, Nasdaq +2.01%, Russell 2000 +1.30%
Friday, May 30, 2025 (GMT)

Underperformers: Energy (0.56%), Materials +0.80%, Utilities +1.10%, Industrials +1.45%, Consumer Disc. +1.70%, Financials +1.78%, Consumer Spls. +1.78%, Healthcare +1.80%

Overview:

US equities were higher for the week, gaining back some of the prior week’s losses. Official S&P 500 index outperformed Equal Weight S&P by ~70bps. Big tech was broadly higher. Other areas of strength included REITs, cosmetics, insurance, banks, airlines, managed care, and casual diners. Underperformers included oil majors, industrial metals, building materials, China tech, networking/comms, homebuilders, and QSRs.

Treasuries were firmer with yields lower across the curve. Dollar Index was up 0.3%. Bitcoin futures were down 3.4%. Gold ended down 1.5%. WTI crude ended down 1.2% for the week with OPEC+ set to approve new production hike this weekend.

What happened?:

A US federal court struck down the Trump administration’s tariffs, including the 10% baseline tariff, the 20% incremental tariff on China, and the 25% tariff on non-USMCA-compliant imports from Mexico and Canada. However, a US federal appeals court subsequently allowed the tariffs to remain. The White House is now looking to shift the legal authorization for the tariffs. Goldman Sachs noted the block on Trump’s tariffs would likely be temporary but is still expected to slow and disrupt ongoing trade talks. This follows Trump’s move to delay the 50% tariff deadline on the EU by just over a month to 9-Jul, with the EU agreeing to fast-track trade talks with the US.

Elsewhere on trade, Treasury Secretary Bessent said talks between US and China are “a bit stalled,” and may need to be revived through call between Trump and China’s Xi. Bessent said he believes US will be having more talks in coming weeks. Notably, on Friday morning Trump accused China on Truth Social of violating agreement with the US to ease tariffs. Analysts speculate Trump’s post was prompted by reports Beijing is dragging its feet on increasing rare earth exports. Report Friday afternoon says US planning wider China tech sanctions with subsidiary crackdown, while other media reported US-China trade deal is at risk of collapsing over rare earth dispute.

Beyond trade, Nvidia earnings were a major event this week. Results and guidance came in both strong and better than feared, despite $2.5B in lost sales from the China H2O embargo. Key takeaways included Blackwell driving nearly 70% of Data Center compute revenue in April. Yield improvements are expected to lift gross margins to the mid-70% range later this year, with Blackwell Ultra on track for launch. Management emphasized strong structural AI demand offsetting China-related headwinds, fueled by rapid growth in reasoning AI, AI infrastructure build-outs, sovereign projects, and enterprise adoption.

Moving to this week’s economic calendar: 1) April core PCE was in-line with expectations, rising 0.1% m/m. Personal spending rose a bit lower than expected, though personal income increased above expectations. 2) Second read of Q1 GDP had an upward revision from (0.3%) to (0.2%). 3) Consumer confidence jumped in May, increasing for first time in five months amid some easing trade pessimism. 4) Preliminary April durable goods orders fell by less than expected. 5) Jobless claims jumped; 6) May FOMC minutes had few surprises with Fed indicating they are taking a cautious approach to rate cuts amid great uncertainty.

In other news: 1) Japan’s finance ministry reportedly considering tweaking JGB issuance to dampen pressure at long end of the curve. 2) Reconciliation bill saw pushback from GOP fiscal hawks, though bill ultimately expected to clear both chambers. 3) OPEC+ to meet this weekend to set June output policy and eight members volunteering production cuts could discuss a larger output acceleration than the +411K bpd ones made back in May and June according to reports.

Corporate highlights:

On the earnings front, NVDA +2.9% results and guidance seen as both strong and better than feared. CRM -2.8% helped by Data cloud and AI momentum though some growth slowdown in core cloud segments. COST +3.1% fiscal Q3 largely in line. DELL -0.8% highlighted strong AI server orders. ANF +7.2%was up big with Hollister driven beat, outsized buybacks and better guidance. DKS +7.5% results fit with positive preannouncement and it reiterated FY guidance. M +2.8%Q1 better while FY sales guide reiterated and EPS down. HPQ -11.0%down big on margin-driven EPS miss and lower FY EPS guidance. HRL +4.2%cut top end of EPS forecast, saw retail organic net sales decline. S -10.9% hit by ARR miss, deal pushouts and guidance cut. ELF +34.0%fiscal Q4 better though no FY26 guidance and announced $1B acquisition. AZO -2.4% takeaways were mixed with US comps better but margins worse. BURL -2.7% margins a bright spot. BBY -5.2% cut guidance. KSS +8.7% earnings, revenue, and OM beat. ULTA +15.8%beat on comps, margins and EPS and raised FY guidance. NTAP +1.2% hit by softer Q1 guidance. GAP flagged unmitigated tariff impact of $250-300M.

Beyond earnings, Reuters reported NVDA +2.9% will launch new Blackwell AI chip for China. CRM -2.8% to acquire INFA +6.4%in an $8B deal. TSLA +2.1% helped by Musk formerly stepping down from White House role. FNMA -4.2% and FMCC +2.3%were up on Trump government backing comments. X +3.4% boosted on report Trump will allow company to be wholly owned by Nippon Steel. BA +2.4% reached deal with DOJ to avoid prosecution related to two fatal 737 MAX crashes. GM +1.9% pushing ahead on EVs despite adoption hesitancy in US. SATS -10.2% elected not to make a scheduled interest payment.

Coming next week:

Notable macro events: Monday AM: May ISM Manufacturing, April Construction Spending; Tuesday AM: April Factory Orders, April JOLTS Job Openings; Wednesday AM: May ADP Employment, May ISM Services; Wednesday PM: Fed Beige Book; Thursday AM: Jobless Claims, April Trade Balance, Q1 Productivity; Friday AM: May Nonfarm Payrolls.

Notable earnings: Monday AM: CPB; Tuesday AM: DG; Tuesday PM: CRWD, HPE; Wednesday AM: DLTR; Wednesday PM: FIVE, MDB, GME, PVH; Thursday AM: CIEN, CBRL, VSCO; Thursday PM: ACGO, DOCU, LULU, WOOF.

S&P 500 Sector Performance:

Outperformers: Real Estate +2.73%, Tech +2.36%, Communication Svcs. +2.11%

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