The S&P 500 Index ($SPX) (SPY) Thursday closed up +0.40%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.28%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.21%.  June E-mini S&P futures (ESM25) are up +0.31%, and June E-mini Nasdaq futures (NQM25) are up +0.10%. 

Stock indexes on Thursday settled higher, with the S&P 500 posting a 1-week high and the Nasdaq 100 posting a 3-month high. Stocks rose Thursday as Nvidia rallied more than +3% after posting stellar earnings results, and CEO Huang predicted “exponential growth” for the AI computing market.  Stocks also benefited from a court ruling that blocked some of President Trump’s import tariffs.

Stocks found support Thursday after the US Court of International Trade issued a unanimous ruling late Wednesday that said President Trump wrongfully invoked an emergency ruling to justify his “Liberation Day” tariffs on global goods.  The order applies to Trump’s global 10% flat tariff, elevated rates on China and other countries, and his fentanyl-related tariffs on China, Canada, and Mexico. Other tariffs imposed under different powers, like the Section 232 and Section 301 tariffs, are unaffected and include the tariffs on steel, aluminum, and automobiles.  The court gave the administration 10 days to “effectuate” its order.

Stocks maintained their gains after Thursday’s US economic news knocked T-note yields lower.  The Q1 core PCE price index was revised downward, weekly jobless claims rose more than expected, and Apr pending home sales posted their biggest decline in more than 2-1/2 years, dovish factors for Fed policy.  Also, dovish comments from Chicago Fed President Goolsbee kept bond yields lower when he said a resolution in US trade policy could push the US economy back toward its pre-tariff trajectory and allow the Fed to lower interest rates. The 10-year T-note yield fell -5 bp to 4.43%

Stocks fell back from their best levels Thursday afternoon when a federal appeals court temporarily paused a ruling by the US Court of International Trade against President Trump’s global tariffs while considering a longer-lasting hold on the decision.  The Trump administration vowed to take the matter to the Supreme Court if necessary.

US weekly initial unemployment claims rose +14,000 to 340,000, showing a weaker labor market than expectations of 230,000.  Weekly continuing claims unexpectedly rose +22,000 to a 3-1/2 year high of 1.919 million versus expectations of a decline to 1.893 million. 

US Q1 GDP was revised upward to -0.2% (q/q annualized) from the previously reported -0.3%.  The Q1 core PCE price index was revised lower to 3.4% q/q from the previously reported 3.5% q/q.

US Apr pending home sales fell -6.3% m/m, weaker than expectations of -1.0% m/m and the largest decline in more than 2-1/2 years.

The markets are discounting the chances at 6% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

The markets this week will focus on any tariff news or signs of new trade deals.  On Friday, Apr personal spending is expected to be up +0.2% m/m, and Apr personal income is expected to be up +0.3% m/m.  Also, the Apr core PCE price index, the Fed’s preferred inflation gauge, is expected to rise +0.1% m/m and +2.5% y/y.  Finally, on Friday, the University of Michigan May consumer sentiment index is expected to be revised upward by +0.2 points to 51.0 from the previously reported 50.8.

Q1 earnings reporting season is winding down.  So far, more than 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest percentage since Q2 of 2024.  Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season.  Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.  

Overseas stock markets on Thursday settled mixed.  The Euro Stoxx 50 closed down -0.14%.  China’s Shanghai Composite closed up +0.70%.  Japan’s Nikkei Stock 225 rallied to a 2-week high and closed up +1.88%.

Interest Rates

June 10-year T-notes (ZNM25) Thursday closed up +13.5 ticks.  The 10-year T-note yield fell -4.9 bp to 4.428%.  June T-notes on Thursday recovered from early losses and moved higher.  Short covering emerged in T-notes Thursday on Fed-friendly US economic news that showed the Q1 core PCE price index revised lower, weekly jobless claims rising more than expected, and Apr pending home sales falling by the most in 2-1/2 years, dovish factors for Fed policy.  Easing inflation expectations are also supportive of T-notes after the 10-year breakeven inflation rate fell to a 2-week low Thursday at 2.312%. 

T-notes added to their gains Thursday on dovish comments from Chicago Fed President Goolsbee, who said the Fed could begin to cut interest rates if there is a resolution in US trade policy.  T-notes jumped their highs Thursday afternoon on strong demand for the Treasury’s $44 billion auction of 7-year T-notes that had a bid-to-cover ratio of 2.69, above the 10-auction average of 2.63.

T-notes on Thursday initially moved lower on reduced safe-haven demand as stocks rallied sharply after a US trade court ruled the vast majority of President Trump’s global tariffs were illegal.  Also, supply pressures weighed on T-notes Thursday as the Treasury auctioned $44 billion of 7-year T-notes. 

European government bond yields on Thursday moved lower.  The 10-year German bund yield dropped to a 3-week low of 2.508% and finished on that low, down -4.6 bp.  The 10-year UK gilt yield fell -7.9 bp to 4.648%.

Swaps are discounting the chances at 99% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Nvidia (NVDA) closed up more than +3% after it reported Q1 revenue of $44.06 billion, stronger than the consensus of $43.29 billion. 

Nordson (NDSN) closed up more than +6% to lead gainers in the S&P 500 after reporting Q2 sales of $682.9 million, better than the consensus of $674.8 million and forecast Q3 sales of $710 million-$750 million, stronger than the consensus of $709.5 million.

Elf Beauty (ELF) closed up more than +22% after reporting Q4 net sales of $332.6 million, better than the consensus of $327.4 million, and acquiring Hailey Bieber’s Rhode beauty brand for $800 million. 

Veeva Systems (VEEV) closed up more than +18% after reporting Q1 revenue of $759.0 million, stronger than the consensus of $728.1 million, and raised its 2026 revenue forecast to $3.09 billion to $3.10 billion from a previous forecast of $3.04 billion to $3.06 billion, well above the consensus of $3.05 billion. 

Boeing (BA) closed up more than +3% to lead gainers in the Dow Jones Industrials after announcing it will boost the output of its 737 jetliners to 47 per month by the end of this year.

Agilent (A) closed up more than +2% after reporting Q2 net revenue of $1.67 billion, stronger than the consensus of $1.63 billion, and raised its full-year revenue forecast to $6.73 billion-$6.81 billion from a previous forecast of $6.68 billion-$6.76 billion, above the consensus of $6.73 billion. 

Southwest Airlines (LUV) closed up more than +2% after Deutsche Bank upgraded the stock to buy from hold with a price target of $40. 

HP Inc (HPQ) closed down more than -8% to lead losers in the S&P 500 after reporting Q2 adjusted EPS of 71 cents, weaker than the consensus of 80 cents, and cut its full-year adjusted EPS forecast to $3.00-$3.30 from a previous forecast of $3.45-$4.75, well below the consensus of $3.50. 

SentinelOne (S) closed down more than -11% after cutting its 2026 revenue forecast to $996 million-$1.00 billion from a previous forecast of $1.01 billion, below the consensus of $1.01 billion.

Best Buy (BBY) is down more than -9% after cutting its 2026 adjusted EPS estimate to $6.15-$6.30 from a previous estimate of $6.20-$6.60. 

Arista Networks (ANET) closed down more than -6% after Nvidia, in an earnings call, cited its network business and deals with Meta Platforms, which is a big Arista customer.

Uber Technologies (UBER) closed down more than -4% after Tesla CEO Musk said his company has been testing its self-driving taxis in Austin, Texas, where Uber already operates self-driving taxis in a partnership with Waymo. 

Salesforce Inc (CRM) closed down more than -3% to lead losers in the Dow Jones Industrials after RBC Capital Markets downgraded the stock to sector perform from outperform. 

GE Vernova (GEV) closed down more than -2% after Jeffries downgraded the stock to hold from buy, citing valuation.

Earnings Reports (5/30/2025)

B Riley Financial Inc (RILY), Compass Diversified Holdings (CODI), Roadzen Inc (RDZN), Shoe Carnival Inc (SCVL), Sunnova Energy International Inc (NOVA).