The Standard & Poor’s 500 Index rose every day last week, and along with the other major stock market averages, posted a large weekly gain, jumping 5.3% to 5,958. The Dow Jones Industrial Average gained 3.4% to 42,654 and the NASDAQ Composite surged 7.2%, finishing the week at 19,211. The market was able to look past some deteriorating consumer sentiment readings and focused instead on the easing trade tensions between the U.S. and China, after the two countries agreed to 90-day “truce” regarding the extreme tariffs.
Investors will be continuing to watch for developments on the global tariff and trade front to see if the market can continue its rally. Also on tap this week, as first-quarter earnings season ends, is a batch of earnings reports from some high-profile retailers. Home Depot, Lowe’s, Target, and TJX Companies are all scheduled to announce results, giving us a nice look at the strength of the consumer. These reports come after industry behemoth Walmart beat their earnings numbers but warned of higher prices to come.
Away from retailers, Palo Alto Networks, Toll Brothers and Snowflake will also be announcing results. Overall, corporate earnings for the first quarter of 2025 have come in relatively strong. With 92% of Standard & Poor’s 500 companies having reported actual results, 78% have reported a positive EPS (Earnings Per Share) surprise, which is above the 5-year average of 77% and above the 10-year average of 75%, according to data from FactSet.
The major averages all opened a bit lower this morning after Moody’s cut the credit rating of the United States by a notch, citing rising debt and interest payments. This will put more attention on the tax and spending bill currently working its way through Congress. So with tariffs, global trade, the future path of interest rates, inflation, and the budget bill, to name just a few, we don’t expect market volatility to go away any time soon.
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All the best – Southport Station Financial Management, LLC