Mid-Morning Look

Thursday, May 29, 2025

U.S. stock futures surged overnight following a few catalysts, as a U.S. trade court ruling blocked most of President Donald Trump’s tariffs, saying he had overstepped his authority, while technology stocks benefitted from a strong quarter and commentary out of AI leader NVDA. Wall Street opened higher but has trimmed some of its big overnight gains (Spuz overnight highs were 6,008 and fell back around 5,925 this morning). Treasuries have rallied as yields tumbled more than 10-bps for the 10-yr off 4.54% highs following weaker GDP data. The U.S. dollar had earlier rallied against the Yen and Swiss franc, but has faded as the trade outlook remained uncertain, and worries emerged about how the President Trump could respond to the judge’s tariff ruling. Nvidia surged 5% after the solid results announced after the bell yesterday, and that’s providing strong bullish momentum. Several retailers are moving on earnings results (BBW, ELF, KSS rise on results and BBWI, BBY, CAL fall); while in tech, big winners outside of NVDA are AI, VEEV but CRM HPQ, NTNX, PSTG, and S fall on results/guidance).

In a unanimous decision, a three-judge panel at the US Court of International Trade (CIT) threw out all of the tariffs Trump put in place on Liberation Day and the ‘fentanyl’ tariffs on China, Canada, and Mexico that came before them. The US Court of International Trade blocked the sweeping US tariffs, ruling “the court does not read IEEPA of 1977 to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the three-judge panel wrote. The court gave the Trump administration 10 days to stop collecting the blocked tariffs. All that remains for now of Trump’s second-term tariffs are those on steel, aluminum, cars, and auto parts. The court forcefully rejected the administration’s argument that the president has unchecked and unlimited authority to impose tariffs. The White House announced it would appeal the recent tariff ruling, stating via social media that it is “not for unelected judges to decide how to properly address a national emergency.”

• Weekly Jobless Claims climbed to 240,000 from 226,000 prior week (and est. 230K); the 4-week moving average fell to 230,750 from 231,000 prior week; continued claims climbed to 1.919M from 1.893M the prior week and vs. estimate 1.894M); the US insured unemployment rate climbed to 1.3% from 1.2% prior.
• April Pending Home sales index fell -6.3% (vs. consensus -1.0%) to 71.3 and April Pending Home sales were down -2.5% from April 2024.

• In Airlines: UAL and JBLU are entering a partnership that will expand JetBlue’s reach and pave the way for United to resume flights at John F. Kennedy International Airport. The arrangement will allow the airline’s customers to earn and spend frequent-flier miles on both airlines. United will get access to slots at New York’s JFK for up to seven daily round-trip flights starting as soon as 2027, and JetBlue will be able to operate more flights at Newark Liberty International Airport. LUV was upgraded to Buy from Hold at Deutsche Bank after the airline refreshed its Board of Directors (along with Elliott Management) which has ushered in a new era of change at the company, which they think will drive higher shareholder returns.
• In Storage: NTNX Q3 Sales accelerated again (+22% vs. 16% LQ) to $639M, beating Street by 2% while raised the implied prior FQ4 sales guide by $6M at the midpoint, implying 17% Y/Y revenue growth; billings rose +16% Y/Y, +12% duration adjusted vs. tougher compare (+21%) while implied new-term license held relatively flat Y/Y as Nutanix added another 620 new-customers; PSTG Q1 revs $778M of revenue re-accelerated to 12% Y/Y (vs. 11% LQ), despite the tough 18% Y/Y compare and topped consensus as upside was driven by Product (+1.5% beat), with Subscription Services growing 17% Y/Y again and E//1 TCV of $95M grew 70% Y/Y (though $1.71B ARR continues to decelerate (18% vs. 21% LQ) while leaving year guidance unchanged.

• AI +28%; posted mixed results as Q4 total revenue beat modestly, as upside from Services revenue was mostly offset by a miss on Subscription revenue; subscription revenue growth excluding demo licenses declined low-20s% y/y and FY26 revenue guidance of 15-20% y/y met consensus on better margins.
• BBW +15%; trades record highs after results; posted Q1 EPS $1.17 vs. $0.82 y/y on revs rising 12% y/y to $128.4M, above consensus $118.9M; said it still expects revenue to grow on a mid-single-digit percentage basis in fiscal 2026 but now expects pretax income in the range of $61M-$67M.
• ELF +28%; reported Q4 sales up +3.6% vs Street estimate of +1.7% and guidance of -1% to +2% while adj. EPS of $0.78 beat estimate of $0.72 and implied guidance of $0.66-$0.71. ELF also announced the acquisition of rhode skin for $800M at closing, plus up to an additional $200M from milestone earnouts.
• KSS +13%; maintained its 2025 sales forecast of a -5% to -7% decline and adj EPS of $0.10-$0.60 after slightly better Q1 sales of $3.05B and a smaller-than-expected EPS loss of (-$0.13); Kohl’s said it plans to have a Sephora outlet at all its U.S. stores by the end of the year.
• NVDA +4%; reported better results as EPS (ex-charges) $0.96 topped est. $0.93 on better revs as Q1 data center revenue $39.1B vs. est. $39.22B and Q1 Gaming revenue was a record $3.8B, up 48% q/q and 42% y/y; said incurred a $4.5B charge due to H20 inventory and noted it was unable to ship an additional $2.5B of H20 revenue in Q1; sees Q2 revenue $45B plus or minus 2%, vs. est. $45.5B.
• ORIC +35%; after saying its experimental prostate cancer drug, ORIC-944, in combination with other treatments reduced prostate-specific antigen levels in 59% of patients in an early-stage trial. Separately, the company announced a $125 mln private placement financing to support development of the drug.
• VEEV +18%; Q1 revenue came in at $759M, representing a $3B+ run-rate and a beat of $32M, driven by strong execution and aided by faster timing of delivery services, with standout performance from Crossix; also Q1 Commercial subscription grew 17% y/y, above 2024 full-year growth of 11%.

• CRM -6%; reported better-than-expected FQ126 results, with non-GAAP EPS of $2.58 vs. consensus $2.52 and non-GAAP operating margin of 32.3% and revs of $9.75B beating consensus, but growing 8%, down from 9% growth prior.
• HPQ -8%; shares tumbled as reported FQ2 EPS below expectations and guidance due to a $0.12 or 100 bps impact on OMs due to tariffs; HPQ cut F25 EPS guide by $0.45; now expects 2025 adjusted EPS $3.00-$3.30 a share, below prior estimates of $3.45-$3.75.
• NTLA -26%; after 8-K filing late yesterday disclosing that a patient in the Phase 3 MAGNITUDE study experienced asymptomatic Grade 4 elevations in liver transaminases.
• S -12%; following a $4M Q1 ARR miss as macro caused deal pushouts—continuing the trend of softer results from off-quarter cybersecurity peer while also guiding both Q2 and FY26 ARR/revenue guided below.