Closing Recap

Tuesday, May 27, 2025

It was an up, up, and away kinda day on Wall Street as U.S. investors breathed a sigh of relief after the long holiday weekend, after positive trade negotiation headlines between the U.S. and Europe helped boost market sentiment. On Friday, President Trump threatened to impose a 50% rate on the European Union by June 1^st and warned Apple that foreign-made iPhones could face significant levies due to recent developments – sending US markets lower for the day (and week). However, following a weekend phone call with European Commission (EC) President Ursula von der Leyen, Trump said he would delay the introduction of new 50% EU tariffs until July 9^th. The EU said it would fast-track talks with the U.S. as their trade chief Maros Sefcovic said the bloc wants to avoid the “mutual pain of tariffs.” In a post on Truth Social, Trump said the EU had called to set dates for trade talks. Stock markets liked the headlines with the S&P 500 rising 1.9% and the Nasdaq Composite over 2.4% while the U.S. dollar strengthened, and Treasury yields fell amid a global bond rally. A better-than-expected consumer confidence report for May also boosted investor optimism. Next up for Wall Street, the Federal Reserve’s minutes from its last policy meeting this week, the April reading of the Fed’s preferred inflation gauge (PCE), GDP data on Thursday and a handful of notable companies reporting earnings including tech/chip giant Nvidia (NVDA). The Dollar Index (DXY) strengthened after settling Friday at its weakest level since September while Bitcoin jumped again, above $110,000 as the Bitcoin conference takes place this week in Las Vegas. Also watch for headlines on ongoing tax bill negotiations, as it heads to the Senate following this week’s approval in the House.

• April Durables orders -6.3% (consensus -7.8%) vs March +7.6% (prev +7.5%); April Durables ex-transportation orders +0.2% (cons -0.1%) vs March -0.2% (prev -0.4%); Durables ex-defense orders -7.5% vs March +9.0% (prev +8.9%); Nondefense cap orders ex-aircraft -1.3%, (cons -0.1%) vs March +0.3% (prev -0.2%); April Durables shipments +0.4% vs March +0.2%; April nondefense cap shipments ex-aircraft -0.1% vs March +0.5%.
• US March 20-metro area home prices +4.1% (consensus +4.5%) from year ago (previous +4.5%) — S&P CoreLogic Case-Shiller reported; March home prices in 20 metro areas -0.1% seasonally adj (consensus +0.3%) (previous +0.4%) and March 20-metro area home prices non-adjusted +1.1% (previous +0.7%)
• Atlanta Fed GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.2% on May 27, down from 2.4% on May 16. After recent releases from the US Census Bureau and the National Association of Realtors, the nowcast of second quarter real gross private domestic investment growth decreased from 0.7% to -0.2%.

• Treasury prices rose all day, sinking Treasury yields which pulled back from recent yearly highs as investors loaded up on stocks, bonds and crypto in a massive buying frenzy on Monday. The U.S. Treasury sold $69B 2-year notes at high yield 3.955%, (vs 3.965% when issued prior) as the bid-to-cover ratio 2.57, vs. recent prior average 2.65 as primary dealers take 10.48% of U.S. 2-year notes sale, direct 26.18% and indirect 63.34%. The US dollar advanced after settling at its lowest levels of the year on Friday, rising against the euro and yen.
• U.S. WTI crude oil futures settle at $60.89 per barrel, falling -$0.64 or 1.04% on the day while Brent Crude futures settle at $64.09 per barrel, falling -$0.65 or 1%. Front month Nymex Natural Gas rose 1.92% to settle at $3.3980. Oil prices slipped on concerns about a supply glut after Iranian and U.S. delegations made progress in their talks and on expectations that OPEC+ will decide to increase output at a meeting this week.

• TSLA sales in Europe fell 49% in April from a year earlier, even as battery-electric sales rose by 27.8. Overall car sales in the region remained roughly consistent with last year, falling just 0.3%, with the strongest sales growth coming from electric and plug-in hybrid cars. Meanwhile Elon Musk said this past Saturday that he’s “back to spending 24/7 at work and sleeping in conference/server/factory rooms.”
• Volvo Car (VLVLY) plans to cut around 3,000 jobs as part of its plan to reduce costs and become more efficient, the WSJ reported this weekend.
• Xiaomi (XIACY) reported a 47.4% jump in first-quarter revenue as the company doubled down on making electric vehicles; Q1 revs were 111.3 billion yuan ($15.48 billion), beating the 107.6-billion-yuan average and said adj net profit jumped 64.5% y/y to 10.7 billion yuan, ahead of the average estimate of 8.96 billion yuan
• Chinese EV stocks tumbled after industry leader BYD Co. (BYDDF) introduced sweeping price cuts of as much as 34%. To kickstart sluggish consumer demand automakers in the world’s biggest car market have slashed sticker prices. Even so, stock levels at dealerships last month reached 3.5 million cars, or 57 inventory days.
• GM files for three-part senior notes offering.

• In Restaurants: WING was upgraded from Hold to Buy at Truist and raised tgt to $400 from $274 saying they have increased confidence that WING’s comp store sales will trough in Q225 and accelerate in ’26, with the Truist Card Data pointing to improved trends in May. Truist also downgraded JACK from Buy to Hold and slashed tgt to $22 from $51 following another quarter of comp sales underperformance and upcoming menu innovation/promotions at competitors and doesn’t see NT SSS catalysts driving the stock higher. YUM said its KFC plans to invest 1.49B pounds ($2.0B) in Britain and Ireland over the next five years, creating over 7,000 jobs within its business and across its supply chain – Reuters.
• In Beauty & Consumer Products: Canaccord noted Circana reported mass and prestige beauty data in the US for Q1, indicating prestige beauty was flat while mass was up +3%. Notably, this is the first time Canaccord can remember in many years as mass outperformed prestige beauty. Looking at drivers of the flat prestige performance, fragrance continued to be strong, with sales up +4%, hair up +4%, makeup down -1%, and skin care down -3%.
• In Food & Beverages: BRBR was upgraded to Buy from Neutral at Davidson with an $85 price target and named BellRing as its best idea in Food noting shares have sold off 21% since the Q2 results on May 6, and the firm doesn’t think the decreased inventory and increased promotion foreshadow a bigger headwind.

• In Delivery: DASH announces proposed private offering of $2.0B of convertible senior notes

• In Transports: Dow Transports outperformed, rising around 2% in a broad market rebound today that saw NYSE market breadth showing a more than 6:1 lead by advancers over decliners; LUV was upgraded to Hold from Underperform at Jefferies in the airline space, but strength was across the board for airlines, truckers, rails and freight.            
• In Industrials: Goldman Sachs with several ratings changes as they upgraded CMI to Buy saying they see structurally higher Power Systems profitability, derisked EPA 2027 expectations, and US truck demand expectations that have been significantly reduced; the firm upgraded TEX to Buy saying believe Aerials segment earnings are bottoming in Q1 amid a 30% production cut, and tariff headwinds are now the base case in estimates; they also downgraded KBR to Neutral on valuation after stock price move. MSM was upgraded from Neutral to Overweight at JP Morgan and raised tgt to $89 saying with various self-help initiatives in flight, the company is better positioned than it has been in some time to leverage a return to growth in end markets and tariff-driven price as it comes.

•  Trade Schools LINC, UTI saw early strength, possibly attributed to post yesterday noting Trump considers redirecting $3B in Harvard grants to US trade schools: “I am considering taking THREE Billion DOLLARS of Grant Money away from a very antisemitic Harvard, and giving it to TRADE SCHOOLS all across our land."
• In FinTech: XYZ was upgraded by BNP Paribas Exane to Outperform from Neutral with a $72 price target saying the company’s guidance for mid-teens gross profit growth acceleration in Q4 looks attainable as headwinds fade, such as high comps in bitcoin and continued pressure in the cash business.
• In Mortgage Sector: RDFN noted the typical U.S. luxury home sold for a near-record $1,348,065 in April, up 6.5% y/y, as pending sales dropped to the lowest level in over a decade amid economic uncertainty. Non-luxury home prices grew 4.1% to a record high median of $374,598. Pending luxury sales drop nearly 10%, the largest decline since August 2023. The number of luxury homes on the market grew 7% last month to the highest level in April since 2021.

• BIIB and City Therapeutics, a privately held developer of RNA-based "trigger molecules," announced a partnership to develop a drug for an undisclosed central nervous system disease.
• HOLX shares spiked midafternoon after the Financial Times reported TPG and Blackstone offered $16B to take health group Hologic private in recent weeks. Hologic in recent weeks rejected the nonbinding offer, which would value the group at $16.3bn to $16.7bn including debt, the people said  https://tinyurl.com/5d73e8d5
• NPCE reaffirms its previously issued full-year 2025 financial guidance; completes primary endpoint analysis for idiopathic generalized epilepsy study; study meets 12-week post-implant safety endpoint.
• PRTA shares slide after saying it would reduce its workforce after a recent trial failed to meet its primary and secondary endpoints. Prothena reported unfavorable data from a Phase 3 trial of birtamimab to treat the blood disorder AL amyloidosis saying the study didn’t meet its primary endpoint.
• RCKT shares tumbled after disclosing an update on its Phase 2 trial of RP-A501 in Danon disease, where a patient experienced an unexpected Serious Adverse Event (SAE) related to a capillary leak syndrome, with that patient since passing away after an acute systemic infection. The FDA has placed a clinical hold on the trial.
• SNY notes the US FDA on Friday approved Co’s meningococcal vaccine Menquadfi for use in infants as young as 6 weeks of age.
• SVRA shares slide after receives Refusal to File Letter From the U.S. FDA for the Biologics License Application (BLA) for MOLBREEVI* to Treat Patients With Autoimmune Pulmonary Alveolar Proteinosis (autoimmune PAP).
• In vaccine names (MRNA, PFE, NVAX, BNTX), The Centers for Disease Control and Prevention has stopped recommendations for routine COVID-19 vaccines for pregnant women and healthy children, U.S. health regulators said on Tuesday. Health Secretary Robert F. Kennedy Jr. said in a video posted on X that the vaccines have been removed from the CDC’s immunization schedule for those groups.

• In Semis: NVDA earnings midweek the highlight for the sector while the Philadelphia Semi Index (SOX) +3.43% at its 200dma average now of 4,863 late day; NVDA rally giving boost to AI related sector with chips, data center names rallying all day (AVGO, ARM, SMCI, VRT, CRWV and others).
• In Media & Telecom: DJT agreed to issue and sell approximately $1.5B in the Company’s common stock and $1.0B in principal amount of 0.00% convertible senior secured notes, for gross proceeds of an aggregate approximately $2.5B, in a private placement offering for the creation of a bitcoin treasury.