Closing Recap

Wednesday, May 28, 2025

U.S. stocks did a whole lot of nothing on Wednesday following a market surge higher on Tuesday, as investors were patient ahead of several key upcoming catalysts in coming days. First, Nvidia (NVDA) earnings are after the bell tonight and will likely be a market mover not just for the tech/AI related space, but the broader market as a whole. Tomorrow morning, we also get a busy round of economic data including quarterly GDP data and PCE readings for the quarter, and then Friday the fresher April core PCE inflation readings which is the Fed’s preferred inflation measure. Today markets digested a few earnings results and the FOMC policy meeting minutes, but nothing that moved the needle. Bitcoin prices eased off recent all-time highs while gold slipped and the dollar/Treasury yields edged higher. Stocks did fade into the bell, closing at lows after holding little changed most of the trading day, into NVDA results.

Minutes from the May 6^th-7^th FOMC policy meeting showed U.S. Federal Reserve officials acknowledged they could face “difficult tradeoffs” in coming months in the form of rising inflation alongside rising unemployment, an outlook supported by Fed staff projections of increased risks of a recession. The combination of inflation and unemployment rising in tandem would leave Central bank officials forced to decide whether to prioritize fighting inflation with tighter monetary policy or cutting interest rates to support growth and employment. “Almost all participants commented on the risk that inflation could prove to be more persistent than expected,” as the economy adapted to higher import taxes proposed by the Trump administration.

NVDA (NVDA) earnings preview: For the quarter, Nvidia is expected to report adjusted earnings per share (EPS) of $0.88 on revenue of $43.3 billion, according to Bloomberg analyst consensus data. The company reported adjusted EPS of $0.61 on revenue of $26 billion in the same period last year. Wall Street anticipates Nvidia’s data center revenue to top out at $39.2 billion, up from $22.5 billion, which works out to a 74% year-over-year increase. Gaming revenue, the company’s second-largest segment, is set to hit $2.8 billion, up from $2.6 billion.

• Fed survey shows 73% of US households said they were at least doing OK in 2024 vs 72% in 2023; Just 29% considered the economy to be "good" or "excellent," up from 22% in 2023; 60% of households felt inflation was making their life worse, down from 65% in 2023; 63% of adults said they had the cash for a $400 emergency expense, unchanged from 2023
• FDIC notes bank profit growth driven by higher noninterest income; U.S. Bank profits climb 5.8% in Q1 2025 to $70.6B; Banks build loan loss provisions in Q1, up 9.1% from year prior. FDIC notes bank asset quality generally favorable, but weakness in commercial real estate portfolios persist. The banking industry reported slower loan growth, just 3% annual growth in Q1 compared to 4.9% pre-pandemic average.

• In Commodity prices, June gold prices slipped -$5.50 or 0.16% to settle at $3,294.90 an ounce while the dollar index (DXY) rebounded 0.3% to 99.80 ahead of key GDP data tomorrow morning and PCE inflation data for April on Friday morning (the Fed’s preferred inflation gauge). U.S. WTI crude oil futures settle at $61.84/bbl, up $0.95 or 1.56% while Brent crude gained $0.81 or 1.26% to settle at $64.90 per barrel.

• Nissan Motor (NSANY) is looking to raise over 1 trillion Yen ($6.93 billion) from debt and asset sales to fund a loan repayment due next year, Bloomberg reports, citing internal documents. As part of the funding options, Nissan is considering a 1-billion-pound ($1.35 billion) loan guaranteed by government-backed export credit agency UK Export Finance. Separately, Nissan has started offering buyouts to U.S. workers and has suspended merit-based wage increases worldwide, internal emails reviewed by Reuters showed.
• STLA named Antonio Filosa as its next CEO, putting an insider behind the wheel. Filosa, a 25-year company veteran who currently serves as chief operating officer for the Americas and chief quality officer, will take up the CEO role on June 23, the automaker said Wednesday. Meanwhile, AMZN’s deal with STLA to create in-car software is "winding down," the companies confirmed after a Reuters inquiry.

• CPRI reported Q1 EPS loss (-$0.30) vs. est. loss (-$0.15) as revs fell -15.4% y/y to $1.04B but was above the consensus $986.57M; reported Q1 Michael Kors revenue fell 15.6% to $694M; CEO said confident in ability to grow Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million over time.
• GME announced that it has purchased 4,710 Bitcoin as shared fall
• Macy’s (M) Q1 comparable sales were down 2% on an owned basis, while sales $4.6B topped the Street est. $4.5B on better Q1 adj EPS of$0.16 vs est. $0.14 while reaffirms 2025 net sales, comparable owned-plus-licensed-plus-marketplace sales guidance; outlook 2025 ADJ EPS $1.60 to $2.00 vs est. $1.93.
• VSCO shares fell after saying its website was offline Wednesday, with some customers saying they’ve been unable to shop online with the lingerie maker since at least Monday.
• Earnings tomorrow for BBY, BURL, EL, BBWI, KSS, CAL, BBW in retailers.

• In Cruise lines: VIK prices secondary offering of 30.53M shares at $44.20 per share; cruise lines little breather after strong performance on Tuesday led by RCL after positive Bernstein comments.

• In Industrials: HON Honeywell agreed to cooperate with Elliott Investment Management and add a member of the activist shareholder to its board as the industrial firm prepares to split into three companies, Bloomberg News reported. AOS shares 3.3%, among top decliners in the S&P; note overnight, LII just announced that they have entered into a JV with Ariston Group to resi water heaters in the US & Canada, combining LII’s distribution channels and customer network with Artison’s water heating product technology.

• In Lending: GSEs FNMA and FMCC shares jumped after U.S. President Donald Trump said he was working on taking the housing giants public in a post on Truth Social. "I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump wrote in the post late on Tuesday.
• In Payments: GPN agreed to divest its payroll business to financial-technology company Acrisure for a total consideration of $1.1 billion; intends to use the after-tax proceeds from the divestiture to return capital to shareholders while maintaining leverage neutrality.
• In Insurance: TRV said it has signed a definitive agreement to sell the personal insurance business and the majority of the commercial insurance business of Travelers Canada to Definity Financial Corporation for approximately $2.4 billion.
• In Crypto: WULF announced the acquisition of 100% of the membership interests of Beowulf Electricity & Data LLC and its affiliates for total consideration for the transaction is approximately $52.4M, consisting of $3M in cash and 5M shares of TeraWulf common stock issued at closing. GLXY shares slid after the crypto company reported an underwritten offering of 29 million shares.
• Banking technology/services: NCNO disclosed a workforce reduction of approximately 7% (~120 employees) along with office space reductions to improve operational efficiencies.
• Financial Services: RDDT to Join Russell 3000 Index

• EOLS announces the departure of its Chief Financial Officer.
• ITOS said it plans to wind down operations, explore potential asset sale.
• SPRO shares surged on data; the co and partner GSK said to stop trial of experimental urinary tract drug tebipenem HBr due to early success after it met the main goal of a late-stage study. In the trial, the drug showed it was at least as good as an existing intravenous treatment in hospitalized adult patients
• VERU said it reported positive safety results from phase 2b quality study: Enobosarm added to semaglutide led to greater fat loss, preservation of muscle, and fewer gastrointestinal side effects compared to semaglutide alone; trial met its prespecified primary endpoint.
• In Managed Care: ELV reaffirmed its EPS guidance of adj EPS of $34.15 to $34.85 (with 60% in 1H25) and FY benefit expense ratio guidance of 89.1% +/- 50 bps.
• In Healthcare Technology: TEM shares slid after short seller Spruce Point Capital Management issued a report entitled, "The Tempest Surrounding Tempus AI", that outlines why the firm believes and estimates that shares of Tempus AI face up to 50%-60% potential downside risk, or $26.35 – $32.95 per share.
• In Medical Devices: BSX said it is discontinuing worldwide sales of its experimental heart device and will no longer seek US FDA approval in the country or other regions; says the decision was made due to increased regulatory requirements; said expects to meet its Q2 and FY25 sales and adjusted earnings forecast
• In Hospitals (HCA, CYH, UHS, THC), Deutsche Bank said its Hospital Same-Store Revenue Tracker, with 229 hospitals and $6.8B of revenues, is tracking for April at +9.0%. Last year provided for messy comps as March 2024 slowed due to the Easter holiday shift, which reversed in April 2024 for which the data pointed to 15.1% revenue growth last year. So, on a tough comp from last year, the 9% growth is significant.

• BAH was downgraded to Sell from Neutral at Goldman Sachs and cut tgt to $94 from $108 as it sees limited revenue and earnings growth over the medium-term, while valuation still has downside risk; sees medium-term revenue growth now closer to flat as federal civilian spending is under pressure.
• JOBY closed on the first $250M payment of its previously disclosed partnership with Toyota Motor (TM). The payment comes after Toyota said in October that it would invest an additional $500M to support certification and commercial production of Joby’s electric air taxi as it seeks to boost air mobility.
• RKLB announced an agreement to acquire Geost LLC, an electro-optical and infrared payload development and manufacturing company and provider to high-priority national security satellites for $275M ($125M in cash and $150M in privately placed shares of RKLB, with an earnout of up to $50M tied to revenue targets).

• In the EDA Sector: Shares of CDNS and SNPS (ahead of earnings tonight) declined after the Financial Times reported the Trump administration has told US companies that offer software used to design semiconductors to stop selling their services to Chinese groups, in the latest attempt to make it harder for China to develop advanced chips. Several people familiar with the move said the commerce department had told Electronic Design Automation groups, which include CDNS, SNPS to stop supplying their technology to China.
• In Security Software: OKTA shares slumped after delivering a solid FQ126 print, with all key metrics above guidance and/or street estimates, but did post a q/q decline in cRPO in FQ1 (though results of +14% topped Street est. 12% y/y it was below 15% q/q) and guidance for another q/q decline in FQ2
• In Communications & Networking: MSI to acquire Silvus Technologies, a global leader in mission-critical mobile ad-hoc networks, for $4.4B cash w/ potential for an additional $600M of earnout compensation over the next few years
• In the Storage Sector: BOX shares jumped on results as Q1 adj EPS $0.30/$276M revs beat consensus of $0.26 and $274.8Mm while guides Q2 revs $290-291Mm above the est. $285.11Mm on better earnings while also raised its year EPS and sales outlook saying AI is helping boost its products.