Stocks pull back, but so does volatility
- Semiconductor stumble erases tech tariff-exemption gains
- Energy sector rebounds as oil stabilizes, gold tops $3,300
- This week: first Mag-7 earnings, consumer sentiment
The US stock market wasn’t able to hold on to an early rally last week, but it did manage to dial down volatility from the previous week’s record-setting levels.
It was a story of tariffs and tech. The S&P 500 (SPX) kicked off the week with a strong rally after the White House announced certain technology (e.g., smartphones, laptops) would be exempt from reciprocal tariffs, but a tech-led sell-off on Wednesday derailed the index’s bid to end the holiday-shortened week with a gain:
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest in an index.)
The headline: NVDA weighs on tech, tech weighs on broad market.
The fine print: Nvidia’s (NVDA) 9.6% Wednesday-Thursday loss followed the chipmaker’s announcement that it would take a $5.5 billion hit because of new export restrictions on the H20 semiconductor it sells to China. Other chip stocks joined in the sell-off, dragging down the tech sector.
The number: 215,000, the lower-than-expected number of weekly jobless claims reported last Thursday.
The scorecard: The Russell 2000 (RUT) bucked the week’s trend with a small gain:
Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)
Sector returns: The strongest S&P 500 sectors last week were real estate (3.9%), energy (3.2%), and consumer staples (2%). The weakest sectors were communication services (-2.9%), consumer discretionary (-3.2%), and tech (-3.7%).
Stock moves: USA Rare Earth (USAR) +41% to $11.75 on Monday, Uniqure (QURE) +38% to $13 on Friday. On the downside, MicroAlgo (MLGO) -31% to $8.34 on Wednesday (and -15% to $11.96 on Monday), UnitedHealth (UNH) -22% to $454.11 on Friday.
Yields: Bond prices bounced last week as yields pulled back from the seven-week high they hit on April 11. The benchmark 10-year Treasury yield ended the week 0.14% lower at 4.33%.
US dollar: The US Dollar Index (DXY) hung around the three-year low it hit the previous week, closing Thursday down 0.73 at 99.37.
Futures: June gold (GCM5) surged 3.3% last Wednesday to a new record close of $3,346.40, ending the week up $83.80 at $3,328.40. June WTI crude oil (CLM5) had its own 3%-plus rally on Thursday, rallying $3.11 to $64.01 for the week.
Coming this week
In addition to Google (GOOGL) and Tesla (TSLA), defense, big pharma, and consumer names are highlights on this week’s earnings calendar. Here’s a sample:
●Monday: Medpace (MEDP), Wintrust (WTFC)
●Tuesday: Quest Diagnostics (DGX), Danaher (DHR), GE Aerospace (GE), Halliburton (HAL), Kimberly-Clark (KMB), Lockheed Martin (LMT), 3M (MMM), Northrop Grumman (NOC), Verizon (VZ), Baker Hughes (BKR), Enphase Energy (ENPH), Tesla (TSLA)
●Wednesday: Boeing (BA), General Dynamics (GD), Lennox (LII), Philip Morris (PM), Silicon Laboratories (SLAB), AT&T (T), Teledyne (TDY), Chipotle (CMG), International Business Machines (IBM), Mattel (MAT), O'Reilly Automotive (ORLY), Texas Instruments (TXN)
●Thursday: American Airlines (AAL), Bristol-Myers Squibb (BMY), Freeport-McMoRan (FCX), Keurig Dr. Pepper (KDP), Southwest Airlines (LUV), Merck (MRK), PepsiCo (PEP), Procter and Gamble (PG), Union Pacific (UNP), Alphabet (GOOG), Intel (INTC), Verisign (VRSN)
●Friday: AbbVie (ABBV), AutoNation (AN), Aon (AON), Colgate-Palmolive (CL), Phillips 66 (PSX), Schlumberger (SLB)
This week’s numbers include:
●Monday: Leading Economic Indicators Index
●Wednesday: S&P Global Manufacturing and Services PMI (flash), new home sales, Fed Beige Book
●Thursday: durable goods orders, Chicago Fed National Activity Index, Existing Home Sales
●Friday: consumer sentiment (final)
Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.
Momentum at the industry level
With nine of the SPX’s 11 sectors in negative territory for the year, investors can be forgiven for thinking of 2025 as, more or less, a sea of red.
Below the sector level, though, there’s more variation in returns, as well as some surprising sources of strength. The following table shows the 2025 returns of the 15 SPX industries that were up for the year as of Friday, along with their respective sectors:
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest directly in an industry index.)
While most traders and investors likely expected heavy representation from the year’s top-performing sector, consumer staples, many may be surprised to find its leading industry is tobacco, which has more or less left other industries in the dust so far this year.
Another possible eye-opener: The strong showing by commercial services and supplies—a relatively low-profile industry that includes businesses ranging from payroll-processing firm Automatic Data Processing (ADP) to garbage collector Waste Management (WM).
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