Splash Mountain in Critter Country at Disneyland in Anaheim, CA (Jeff Gritchen/Getty Images)

S&P 500’s earnings momentum brightens as tariff-induced plunge runs out of steam

There’s a newfound calm on Wall Street, with few analysts changing estimates up or down.

5/19/25 12:14PM

With a red-hot rally erasing the S&P 500’s 2025 losses, Wall Street analysts entered “wait and see” mode when it comes to the fundamental outlook for the companies they cover.

The below chart tracks the number of S&P 500 companies with a four-week average of 12-month forward earnings per share that’s gone up over the past week, less the number of companies in which it’s lower, divided by the total number of revisions. It’s clear that earnings revision momentum has inflected positively.

But a peek under the hood to disaggregate the data shows this isn’t because of any newfound vigor for boosting earnings estimates after tariffs were paused — those are at their lows of the year. It’s simply because analysts have stopped cutting estimates after the initial tariff-induced shock.

A smattering of observations and thoughts about all this:

You can really think of this as “analysts scrambled to take out their pencils and calculate how much large tariffs would hurt companies in their coverage universe, and delivered their first draft very quickly.”
With this first draft complete, no one is going to be rushing to cut estimates again unless given a reason to do so by the economic data, a negative turn in tariff policy, or evidence that what’s on the books is more of a headwind than originally thought. These things take time (and would probably be reflected in prices well before that actually happens).
It is impressive — and a testament to how strong the Q1 earnings season has been — that corporate guidance, in aggregate, was able to relieve rather than accentuate the negative pressure on estimates.

“The recent tariff de-escalation is a positive development to be sure, but there are significant challenges in place to public company profitability today that were simply not there to start the year,” wrote RBC Capital Markets Chief US Equity Strategist Lori Calvasina, who anticipates additional cuts to 2025 estimates will be in the offing. “We also think it will take more time to understand the impacts of the uncertainty around policy that occurred.”

Luke Kawa9h

Strategy jumps as MSCI allows digital asset treasury companies to stay in global indexes

In a massive reprieve for Strategy, index provider MSCI is letting digital asset companies stay in its benchmarks, sending shares sharply higher in after-hours trading.

The index provider had floated a proposal in which firms where crypto holdings are more than 50% of assets would be excluded from its global indexes, but has decided not to proceed with this for now.

“MSCI has determined at this time not to implement the proposal to exclude digital asset treasury companies (‘DATCOs’) from the MSCI Global Investable Market Indexes (‘MSCI Indexes’) as part of the February 2026 Index Review,” per a statement.

Getting kicked out of key indexes would have caused funds to flow out of Strategy, the largest digital asset treasury company, and its peers.

“At this time,” of course, means the door is open to reconsidering this down the road, as MSCI plans on having a broader review and consultation on the treatment of DAT companies.

“Distinguishing between investment companies and other companies that hold non-operating assets, such as digital assets, as part of their core operations rather than for investment purposes requires further research and consultation with market participants,” according to MSCI.

Matt Phillips10h

Rocket Lab surges to second straight record-high close

Retail favorite Rocket Lab closed at a new all-time high on Tuesday, continuing a remarkable run over the last month that has carried the launch services provider and aspiring Space X competitor up more than 70% over the last month (compared to its close of $49.06 on December 5).

Rocket Lab saw elevated options activity during its run-up today, with well over 3.5x the 90-day average in options volume changing hands over the course of the day.

Other space plays such as AST SpaceMobile and EchoStar surged today.

Despite being a money-losing company — it’s never turned an annual profit as a public company — Rocket Lab’s share price has soared nearly 1,500% over the last two years, generating tons of loyalty and enthusiasm among retail investors.

In fact, Goldman Sachs has made Rocket Lab the heaviest weighting in the latest iteration of its GS Memes basket of thematic stocks, just ahead of AST SpaceMobile, showing how enamored traders have become of such space stocks.

CHICAGO, IL - MARCH 05: Benny, the mascot for the Chicago Bulls entertains during a break between the Bulls and the Boston Celtics at the United Center on March 5, 2018 in Chicago, Illinois.

The S&P 500 closes at a record high

The Nasdaq 100 and Russell 2000 outperformed, rising 0.9% and 1.4%, respectively.

Tasha Matsumoto10h

Max Knoblauch14h

JetBlue takes off on bullish options activity

Low-cost airline JetBlue is up more than 8% on Tuesday, on pace for its biggest daily gain since August. If the price momentum holds, Tuesday will mark JetBlue’s sixth-best trading day of the past 52 weeks.

The carrier is being propelled by bullish options activity, with more than 53,000 call options changing hands as of 12:14 p.m. ET, nearly 4x the 20-day average for a full session.

JetBlue closed up 4.6% on Monday, as traders appeared to price in medium-term oil supply relief due to the possibility of Venezuela’s reserves getting more developed amid tensions with the US.

J. Edward Moreno15h

Moderna rallies after BofA raises its price target to $24 from $21

Moderna rose on Tuesday after Bank of America analysts raised their price target for the ailing biotech behind the COVID-19 vaccine, painting a rosy picture of the products in its pipeline.

BofA kept Moderna’s “underperform” rating but raised its price target to $24 from $21, which now accounts for “refreshed revenue builds for lead assets.” Analysts said the company’s cost-cutting measures, paired with potential new revenue from its investigatory oncology vaccines, could bring it back to profitability in the coming years.

Moderna is best known for being tapped by the US government to quickly develop a vaccine for COVID-19 in 2020, a product that remains its single source of revenue. The company has yet to bring new products to market and is now faced with a second Trump administration hostile to that product.