Capital markets experienced volatility following President Trump's posts about potential tariffs, creating uncertainty just before the holiday weekend.
- Apple (AAPL, Financial) warned of a 25% tariff on iPhones not made in the U.S.
- President suggested a 50% tariff on the EU, effective June 1.
- Flight-to-safety led to a drop in Treasury yields; 10-yr note fell to 4.45%.
- CBOE Volatility Index surged to 25.53, indicating increased market anxiety.
- Major indices fell: Dow (-1.2%), Nasdaq (-1.7%), S&P 500 (-1.3%), Russell 2000 (-1.7%).
- Disappointing guidance from Deckers Outdoor (DECK, Financial) and Ross Stores (ROST, Financial) added pressure.
- Calm returned after White House clarified remarks as negotiating tactics.
- Treasury Secretary Bessent not concerned about rising yields, attributing them to stronger growth expectations.
- 10-yr note yield settled at 4.51%, 30-yr bond at 5.04%, with VIX easing to 21.92.
- Apple and mega-cap stocks led declines in information technology, communication services, and consumer discretionary sectors.
- Utilities sector (+1.2%) was the only sector with significant gains.
- Decliners outpaced advancers on both NYSE and Nasdaq.
- U.S. markets will remain closed on Monday for Memorial Day.
Year-to-date performance:
- DJIA: -2.2%
- S&P 500: -1.3%
- Nasdaq: -3.0%
- S&P 400: -4.6%
- Russell 2000: -8.5%
Economic data showed a 10.9% surge in new home sales in April, reaching an annual rate of 743,000 units. This increase was supported by a decline in median sales prices, though tempered by a downward revision of March sales figures.
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● Microsoft (MSFT, Financial) saw a significant regulatory hurdle removed as the Federal Trade Commission (FTC) withdrew its lawsuit against the company's $68.7 billion acquisition of Activision Blizzard. This decision marks the end of a prolonged legal battle, allowing Microsoft to proceed with the deal, which is expected to enhance its gaming portfolio significantly.
● Informatica (INFA, Financial) shares surged over 25% following reports that Salesforce (CRM, Financial) is in talks to acquire the company. The potential acquisition, which could be announced next week, has caused Salesforce shares to dip by 3%, reflecting investor concerns over the financial implications of the deal.
● Douglas Elliman (DOUG, Financial) experienced a 33% stock surge after reports of a takeover bid from Anywhere Real Estate (HOUS, Financial). The offer values Douglas Elliman at more than $4 per share, nearly double its previous closing price, although the company is likely to reject the current proposal.
● Intuit (INTU, Financial) raised its fiscal 2025 revenue growth guidance to 15%, driven by strong performance in its TurboTax Live and mid-market segments. The company reported a 15% increase in revenue to $7.8 billion for the third quarter, highlighting the impact of its AI-driven platform on customer engagement and operational efficiency.
● Autodesk (ADSK, Financial) outlined a revenue target of $6.925 billion to $6.995 billion for fiscal 2026, emphasizing its strategic focus on cloud and AI technologies. The company reported a 15% revenue growth in the first quarter, with significant contributions from its new transaction model.
● Deckers Outdoor Corporation (DECK, Financial) announced a $150 million tariff headwind for fiscal 2026, which is expected to impact its gross margins. Despite this, the company reported a 16% revenue growth for fiscal 2025, driven by strong performances from its HOKA and UGG brands.
● Rio Tinto (RIO, Financial) was selected for a second major lithium project in Chile, partnering with Empresa Nacional de Minería for the Altoandinos project. This follows a similar selection earlier in the week, reinforcing Rio Tinto's strategic focus on expanding its lithium portfolio.
● Gilead Sciences (GILD, Financial) announced successful results from a late-stage trial of its breast cancer therapy, Trodelvy. The drug met its primary endpoint in a Phase 3 trial, showing significant efficacy as a first-line treatment for triple-negative breast cancer, potentially expanding its market reach.
● Palantir Technologies (PLTR, Financial) received a bullish outlook from Wedbush following a $795 million U.S. Army contract modification. The deal, part of the Department of Defense's AI initiative, positions Palantir as a key player in federal AI projects, with potential for further growth.
● Merus N.V. (MRUS, Financial) shares rose 16% after interim data from a mid-stage trial showed promising results for its lead cancer therapy. The combination treatment demonstrated a 63% response rate in head and neck cancer patients, suggesting potential as a new standard of care.
● Gyre Therapeutics (GYRE, Financial) saw its stock decline by 16% following the pricing of a $20 million stock offering. The proceeds will fund clinical trials and operational expenses, but the dilution impact weighed on investor sentiment.
● Vermilion Energy (VET, Financial) announced the sale of its Saskatchewan and Manitoba assets for C$415 million, with plans to use the proceeds for debt reduction. The sale aligns with Vermilion's strategy to focus on long-duration, high-return assets.
● Foxconn Technology (FXCOF, Financial) emerged as a potential bidder for UTAC Holdings in a deal valued at approximately $3 billion. The acquisition would expand Foxconn's semiconductor capabilities amid ongoing U.S.-China trade tensions.
● Phillips 66 (PSX, Financial) plans to lay off most workers at its Los Angeles refinery in December, following a decision to close the facility. The closure, along with Valero's Benicia refinery, will impact 20% of California's gasoline supply.
● International Paper (IP, Financial) announced the closure of five UK sites, resulting in 300 job losses. The move follows its acquisition of DS Smith and aims to streamline operations amid challenging market conditions.
● Shell (SHEL, Financial) is transferring its Indonesian gas station operations to a joint venture between Citadel Pacific and Sefas Group. The deal includes a brand licensing agreement, allowing Shell to maintain its presence in the region.
● Apple (AAPL, Financial) is offering trade-in discounts for new iPhones in China to counter competition from local brands like Huawei. The promotion aims to boost sales amid a challenging market environment, as Apple's stock continues to face downward pressure.
● Wix.com (WIX, Financial) acquired Hour One to enhance its generative AI capabilities. The acquisition is expected to improve Wix's web and visual design offerings, although the company's stock saw a slight decline following the announcement.
● Wolfspeed (WOLF, Financial) appointed David Emerson as COO, responsible for operations, supply chain, and quality divisions. The leadership change comes as Wolfspeed navigates financial challenges and strategic shifts.
● Disney (DIS, Financial) is attempting to block YouTube from hiring its former executive, Justin Connolly, for a sports role. The legal action underscores Disney's efforts to protect its contractual agreements and competitive position in the media landscape.
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