The stock market rally gained momentum with the Nasdaq composite and S&P 500 hitting record highs amid generally favorable economic data as well as positive news from Nvidia, CrowdStrike, ASML and more. But the small-cap Russell 2000 retreated. Treasury yields fell solidly even with a Friday jump.
Stock Market Rally Hits Highs
The Nasdaq and S&P 500 hit record highs amid upbeat news from Nvidia, CrowdStrike, ASML as well as positive economic data. However, the small-cap Russell 2000 retreated. Treasury yields tumbled, even with a big Friday jump following the jobs report. Crude oil prices steadied.
Jobs, Economic Data Mixed
Friday's May jobs report offered two very different stories about the labor market. The survey of employers, which comes with a much smaller margin of error than the household survey, revealed the second strongest month of hiring over the past year. Payrolls rose by 272,000, beating forecasts by 90,000. Average hourly wages also topped forecasts, up 4.1% from a year ago. Yet household survey data showed the jobless rate climbing to 4% for the first time since January 2022. The ranks of employed workers fell by 408,000 with 250,000 people exiting the labor force. Earlier in the week, ISM surveys showed that the manufacturing sector contraction deepened in May, while the services-sector returned to moderate growth. However, both ISM reports showed employment declines. Additionally, the Labor Department reported that job openings in April tumbled more than expected.
Nvidia, AMD, Intel Talk AI Chips
The chief executives of Nvidia, AMD and Intel outlined their product roadmaps for artificial intelligence processors at the Computex trade show in Taiwan this week. Nvidia CEO Jensen Huang previewed the company's Blackwell Ultra chip in 2025 and next-generation Rubin chip platform in 2026. Advanced Micro Devices CEO Lisa Su said AMD, like Nvidia, is now on an annual cadence for its data center AI processors. Su discussed new Instinct AI accelerators coming later this year as well as in 2025 and 2026. Intel CEO Pat Gelsinger revealed an aggressive pricing strategy for Intel's Gaudi 2 and Gaudi 3 AI accelerators. Nvidia ran to fresh highs while AMD was little changed and Intel slightly lower.
Chip Gear Maker ASML Nabs Big Sale
ASML jumped after the semiconductor equipment leader logged a big sale to major customer Taiwan Semiconductor Manufacturing. Chip foundry TSMC has purchased ASML's high numerical aperture, extreme ultraviolet lithography system. The cutting-edge machines cost about $380 million apiece. Meanwhile, Intel has already taken delivery of a high-NA EUV system from Netherlands-based ASML. The gear enables chipmakers to make smaller transistors with higher transistor densities than previously possible.
CrowdStrike Jumps On Strong Earnings, Guidance
CrowdStrike Holdings said adjusted Q1 earnings per share jumped 63% while revenue, including acquisitions, rose 33% to $921 million. Both modestly topped views. Annual recurring revenue, tied to subscription services growth, increased 33% to $3.65 billion, slightly beating. The cybersecurity leader raised its full-year revenue guidance slightly to $3.993 billion at the midpoint, up 31%. CrowdStrike stock jumped.
China EV Sales Charging Up
Most EV makers in China reported higher sales vs. April and a year earlier, boosted by new subsidies, models and promotions. Nio and Geely's Zeekr posted their best-ever monthly deliveries. Premium startup Li Auto outpaced peers with 35,020 EV deliveries, a 2024 high and increasing almost 36% from April. That came on the back of price cuts and Li also said the smaller and cheaper L6 SUV is selling briskly. XPeng lagged. Tesla archrival BYD sold 331,817 EVs in May, rising 6% from April, with plug-in hybrids spearheading growth. A just-released new hybrid system should fuel sales going forward. Tesla's made-in-China sales rose vs. April but declined vs. a year earlier despite generous incentives. Separately, Nio posted a worse-than-feared Q1 loss as revenue sank 12% to $1.372 billion.
Ollie's Jumps While Other Discounters Slump
Ollie's Bargain Outlet reported a 49% EPS gain while sales rose 11% to $508.8 million, beating views. The closeout retailer also guided higher. OLLI stock broke out, but later pared gains. Dollar Tree matched FactSet estimates with a 3% EPS drop and 4% revenue rise to $7.63 billion. Dollar Tree also said it's exploring the potential sale or spinoff of its Family Dollar business. Shares fell to 2024 lows. Five Below tumbled after reporting a 15% earnings decline on a 12% revenue growth, both missing. The tween-and-teen focused discounter guided Q2 and full-year EPS below consensus.
In Brief
Edwards Lifesciences agreed to sell its critical care business to Becton Dickinson for $4.2 billion. The all-cash deal will bolster BD's smart connected-care solutions. Edwards had been planning to spin off the division, which makes remote monitoring tools for patients in hospitals.
Viking Therapeutics tumbled Tuesday despite seemingly positive results from its study in nonalcoholic steatohepatitis, or NASH. After a year, 63% to 75% of patients who received Viking's drug didn't have any inflammatory symptoms of the liver disease. Some 44% to 57% of patients had at least a one-stage improvement in fibrosis, with no worsening in their NASH symptoms. On Wednesday, Eli Lilly trial results for metabolic dysfunction-associated steatohepatitis, or MASH — another name for NASH — drove shares of drug developers focusing on the liver disease lower. More than half of patients reached MASH resolution, with no worsening in fibrosis. And 51% to 55% of patients, depending on the dosage, had at least a one-stage improvement in fibrosis.
Hewlett Packard Enterprise reported fiscal Q2 earnings that fell from a year earlier but topped expectations as strong computer server sales drove a surprise revenue gain. HPE earnings sank 19% while revenue rose 3% to $7.2 billion. Management disclosed AI systems revenue for the first time. It doubled to $900 million vs. the previous quarter. HPE stock soared.
Ford U.S. sales rose 11% in May vs. a year earlier. Traditional auto sales climbed nearly 6%. Both EV and hybrid sales jumped 65%, albeit from a relatively low base, with the F-150 Lightning sales almost doubling to 3,260. Meanwhile. General Motors reportedly saw strong EV gains in May amid new models and getting past months of battery woes that cripple production.
Spotify Technology raised prices for its ad-free streaming music service tiers in the U.S. Shares jumped to a new high.
Waste Management will buy medical waste specialist Stericycle for $7.2 billion including assumed debt, or $62 a share. Waste Management fell while Stericycle jumped.
Lululemon popped after clearing estimates for Q1 views. Earnings increased 11% on 10% revenue growth to $2.2 billion. Comparable sales rose 6%, driven by a 25% increase internationally. Lululemon guided low on Q2, but up on full-year EPS. The athleisure retailer also OK'd a $1 billion increase to its stock buyback program.
DocuSign reported a 14% EPS gain with sales up 7% to $709.6 million, both beating but with growth slowing for a fourth straight quarter. The e-signature company gave roughly in-line revenue guidance but also announced a $1 billion add to its buyback program. Shares slumped.
HealthEquity reported adjusted EPS jumped 60% with revenue up 18% to $287.6 million, both beating fiscal Q1 views. Health saving account members grew 13% to 9.1 million, boosted by the acquisition of BenefitWallet's portfolio of 616,000 HSAs. Shares jumped, hitting a three-year high.
