Markets
Nia Warfield, Luke Kawa

S&P 500 goes nowhere with earnings season set to pick up steam

The S&P 500 and Nasdaq 100 ended fractionally lower while the Russell 2000 fell 0.6% in a ho-hum end to the week.

Volatility seems to have gone on vacation for the summer. The S&P 500 has traded in a weekly range of less than 2% in each of the past three weeks, the first time it’s done that this year.

Utilities was the only S&P 500 sector ETF to end with a gain of more than 1%; energy, healthcare, and communications services were the biggest decliners.

Gains were led by Invesco, which jumped 15% after the investment management firm told the SEC that it’s seeking permission from owners of its Invesco QQQ Trust to change the fund structure. Elevance Health was among the decliners, falling 8% after disappointing Q2 results and signaling uncertainty around the future of ACA enrollment. Centene and Molina Healthcare also dropped 4% and 10%, respectively.

Charles Schwab shares rose about 3%, hitting a record high, after relentless retail trading activity throughout the tariff-infused volatile second quarter helped drive better-than-expected results.

Both Coinbase and Robinhood reached record highs after the House passed two critical crypto legislative bills focused on stablecoins and market structure oversight.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

Shares of online real estate company Opendoor were up 36%, continuing its rally after call volumes set a new daily record for the fourth straight session, nearly eclipsing 1 million.

Tiny AI company Blaize jumped more than 50% after announcing a $120 million deal to deploy its platform in Asia “for smart city applications.”

Netflix shares fell 5% a day after reporting a Q2 beat and receiving a wave of analyst price target hikes, as investors reacted to the company’s warning that second-half margins would be lower than the first half.

Sarepta shares sank 36% after reports that the FDA plans to halt all shipments of the company’s top-selling drug following a second patient death link to its experimental gene therapy. 

Exxon shares fell 3.5% after rival Chevron won a ruling that gives the company access to one of the world’s fastest-growing offshore oil regions, allowing Chevron to close its $53 billion acquisition of Hess. Chevron shares dipped down less than 1%.

Talen Energy, a power provider for hire with a focus on selling juice to the booming AI data center industry, jumped nearly 25% after announcing the purchase of two gas-fired power plants.

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markets
Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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