Early Look

Tuesday, May 27, 2025

U.S. stock prices are rebounding as Wall Street returns from the 3-day Memorial Day holiday weekend, as U.S. President Donald Trump’s postponement of his threatened 50% duties on European Union shipments boost sentiment. President Trump stated in a post to Truth Social: “I received a call today from Ursula von der Leyen, President of the European Commission, requesting an extension on the June 1st deadline on the 50% Tariff with respect to Trade and the European Union. I agreed to the extension – July 9, 2025 – It was my privilege to do so. The Commission President said that talks will begin rapidly.” The headlines are reversing stock market weakness Friday where Trump had initially threatened to impose 50% tariffs on imports from the EU starting June 1^st. Outside of the trade news, markets wake up to a potential deal in the software space as the WSJ reported Salesforce (CRM) is in talks to acquire Informatica (INFA) in a roughly $8B deal, while earnings from some mega cap tech leaders, including AI chip giant NVDA reporting this week. Stock markets look to rebound after declining last week where the S&P 500 fell -2.61%, the Nasdaq declined -2.47%, and the Dow fell -2.47%. In Asian markets, The Nikkei Index gained 192 points to 37,724, the Shanghai Index fell -6 points to 3,340, and the Hang Seng Index rises 99 points to 23,381. In Europe, the German DAX is up 190 points to 24,218, while the FTSE 100 is up 83 points to 8,801 (3-week highs). The US dollar rebounds against the Japanese yen, and Japanese bond yields ease after Bank of Japan Governor Ueda signaled a willingness to hike rates if the economy evolves as expected and that monetary easing will be adjusted as needed to meet the BoJ’s inflation target. While the bank recently downgraded its economic and inflation outlook due to trade uncertainty, Ueda noted that underlying inflation is closer to 2% than it has been in years. U.S. Treasury yields were steady on Tuesday, with the two-year yield at 3.95% and the benchmark 10-year yield at 4.5%. Speeches from a slew of Federal Reserve policymakers this week and Friday’s U.S. core PCE price index are also due, which could provide clues on the outlook for U.S. rates.

• The Dow Jones Industrial Average fell -256.02 points, or 0.61%, to 41,603.07
• The Nasdaq Composite dropped -188.53 points, or 1.00%, to 18,737.21
• The Russell 2000 Index declined -5.71 points, or 0.28% to 2,039.85

• 8:30 AM ET                  Durable Goods Orders M/M for April…est. (-7.8%)
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 9:00 AM ET                  Monthly Home Price Index for March…prior +0.1%
• 9:00 AM ET                  CaseShiller 20-city index for March…est. +0.2%
• 10:00 AM ET                Consumer Confidence for May…est. 87.0
• 10:30 AM ET                Dallas Fed Manufacturing for May
• 1:00 PM ET U.S. Treasury to sell $69B in 2-year notes

• Earnings After the Close: API BOX OKTA SMTC SQM

• Craig Hallum 22^nd Annual Institutional Investor Conference, 5/27-5/28, in Minneapolis, MN
• Deutsche Bank 15th Annual Global Financial Services Conference, 5/27-5/29 in New York
• Wells Fargo Semis Bus Tour, 5/27-5/29

• China total industrial profits rose in April at a faster pace as profits of industrial enterprises above designated size nationwide grew by 3.0% year-on-year, compared with 2.6% in March.
• Crude oil prices dipped as traders braced for a potential OPEC+ supply boost, with a 411,000-bpd hike expected to be finalized this week. Losses were capped after Trump extended EU tariff talks, easing demand concerns and supporting sentiment.

• Tesla’s (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.
• 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.

• Idacorp Inc. (IDA), Idaho’s main electric utility mentioned positively in Barron’s saying the company is emerging as a rare growth story in the regulated utility sector, making it a solid investment despite modest stock performance. Idacorp projects 8.3% power demand growth over five years, well above industry norms.
• Southwest Airlines (LUV) upgraded to Hold from Underperform at Jefferies.
• U.S. Steel (X) was downgraded to Hold from Buy at Jefferies and raised its tgt to $55 from $50, after President Trump announced his approval of “some form of partnership” between the company and Nippon Steel. Details of what he has approved are vague, the market reacted as if a full takeover at $55 per share is likely.

• Prothena (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.

• Nvidia (NVDA) earnings to reveal hit from US export curbs on China; the Trump administration last month put export limits on Nvidia’s H20 chip – a move the company said would result in $5.5 billion in charges.
• E2open (ETWO) agreed to be acquired by WiseTech Global Limited (WTCHF), which marks the conclusion of e2open’s previously announced strategic review process. Under the terms of the transaction, e2open stockholders will receive $3.30 per share in cash equating to an enterprise value of $2.1B.
• Taiwan Semiconductor Manufacturing Co (TSM) will open a chip design centre in Munich, Germany, a company executive said on Tuesday.
• Trump Media & Technology Group (DJT) shares rose after The Financial Times reported the company, the social media website started by Trump following his first term in office, is planning to raise $3 billion to buy cryptocurrencies such as Bitcoin.