Markets
Nia Warfield, Luke Kawa

Tech and energy fuel positive start to the week for US stocks

US stocks enjoyed a positive start to the week, shaking off early losses to finish near their highs of the day. The S&P 500 rose 0.4%, the Nasdaq 100 gained 0.7%, and the Russell 2000 went up 0.2%.

The S&P 500’s rally came despite decliners outnumbering advancers by 22.

Energy was the best-performing S&P 500 sector ETF despite another production increase from OPEC+, while tech also put in a solid gain. Industrials was the lone sector to finish in the red.

Meta surged, while ad agencies fell, on the social media giant’s plan to launch an AI ad-creation tool.

US steel giants Nucor and Steel Dynamics surged double digits, leading S&P 500 gainers after President Trump said he would double tariffs on steel and aluminum imports beginning this Wednesday. On the flip side…

Detroit automakers Ford and GM both fell about 4% on the news and additional comments from the president that he wanted automakers to move full production to the US.

Advertising firms Omnicom, Interpublic, and WPP dipped over 2% on reports that Meta hopes to launch a tool that will use AI to create ad campaigns by the end of next year.

DraftKings shares dropped 6% and FanDuel parent Flutter Entertainment slipped nearly 3% after Illinois quietly passed a new budget over the weekend that tacks on steep new fees for high-volume sportsbook operators.

Shares of Tempus AI, an unprofitable vendor of cancer screening tests that also licenses data for use in drug discovery, soared 15%, erasing much of the loss it suffered after a short seller released a searing analysis of the stock last week.

Applied Digital soared 48% while CoreWeave jumped 8% after the former announced a pair of 15-year deals between the two tech companies to support the latter’s AI capabilities.

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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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