Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:13 AM

May 10, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

Economic & Market Overview

U.S. equities remained subdued during the week of May 5-9, 2025, as trade policy uncertainty and a cautious Federal Reserve weighed on investor sentiment.

The S&P 500 and Nasdaq Composite both declined 0.5% and 0.3%, respectively, while the Dow Jones saw a slight loss of 0.2%.

The Federal Reserve maintained interest rates at 4.25%-4.50%, citing increased economic risks from trade tensions. Jobless claims fell to 228,000, signaling labor market resilience, but Q1 unit labor costs surged 5.7%, suggesting potential inflationary pressures.

The U.S. trade deficit hit a record $140.5 billion in March, exacerbated by pre-tariff import surges, which also contributed to Q1 GDP contraction.

Gold prices remained stable around $3,335/oz, and oil prices rose 4.6% to $60.98 per barrel, supported by supply-side factors.

Technology & Growth

Big tech stocks experienced mixed performance. Microsoft’s cloud revenue soared 20%, with its Azure segment growing 33%.

Meanwhile, Apple warned of margin contraction in Q3 due to a $900M tariff impact on accessories, though its Services revenue hit an all-time high. Alphabet’s stock dropped 6.4% after weaker-than-expected earnings, despite a 28% rise in Cloud revenue.

Tesla’s shares climbed 4.8% despite reporting a 13% drop in Q1 vehicle sales amid rising competition.

The AI narrative continued to evolve, with Amazon and Microsoft expanding their cloud and AI investments, reflecting strong demand for AI infrastructure.

Meta’s advertising revenue surged 16%, but Reality Labs continued to post significant losses, underscoring the growing focus on AI-driven business outcomes.

Financial Institutions

JPMorgan Chase posted strong first-quarter profits, benefiting from higher interest rates, loan growth, and strong consumer credit card spending. Bank of America traded higher following its report, while Wells Fargo and Morgan Stanley exceeded profit expectations.

The 10-year U.S. Treasury yield climbed, suggesting rising borrowing costs for consumers and businesses. The Fed's stance on maintaining rates, along with its acknowledgment of the economic risks posed by trade tensions, continued to provide support to financials.

In addition, Bank of America redeemed €1.25 billion in senior notes, reflecting confidence in its financial position.

Consumer Staples & Healthcare

AbbVie’s stock slipped due to regulatory pressure, as the company faced legal battles over state laws aimed at limiting drug prices.

The FDA approved Eli Lilly’s drug Omvoh for Crohn’s disease, giving the company a boost. UnitedHealth Group’s shares rose following a government announcement that Medicare Advantage reimbursement rates for 2026 would increase by 5.06%.

In the broader healthcare sector, Procter & Gamble’s stock faced pressure, as the company highlighted supply chain adjustments amid tariff concerns.

Eli Lilly's strong performance, driven by its GLP-1 drugs, helped offset some of the market volatility in the healthcare space.

Energy & Industrial

ExxonMobil’s stock rebounded after releasing an update indicating a nearly $900 million profit boost from higher oil prices early in the quarter.

Despite a record $140.5 billion U.S. trade deficit, oil prices rose by 4.6%, driven by supply constraints and geopolitical factors.

West Texas Intermediate (WTI) crude closed at $60.98 per barrel, up from previous lows.

The energy sector is seen as increasingly attractive, benefiting from higher oil prices, as some analysts predict continued support for oil prices due to supply discipline from OPEC+.

On the industrial side, investors are also watching the impact of rising energy prices on manufacturing and global supply chains.

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Baked with love,

Anna Eisenberg ❤️