An Incredible Hulk figure display is seen during 2024 Los Angeles Comic-Con (Paul Butterfield/WireImage)

This earnings season isn’t about corporate results. It’s about tariffs.

Implied correlations are climbing into the reporting period, a signal that macro fears outweigh any company-specific nuances.

Luke Kawa

4/10/25 10:35AM

On the eve of JPMorgan’s earnings release, the unofficial kickoff to earnings season, one of the most tried-and-true stock market rules for the reporting period has been completely torn asunder by the trade war.

Typically, the implied correlation of S&P 500 stocks over the next month — that is, how much the members of the index are priced to move independently or in unison — tumbles as we approach the start of earnings.

The reasoning here is simple: different things matter for different companies. So, during a time when we’re getting a lot of company-specific news, stocks are expected to march to the beat of their own drummers.

It’s tough to do that this earnings season because everyone and their mother is squarely focused on one common factor: how much do tariffs change a company’s outlook. So far, a common answer is to say, “I’m not sure.” That’s what Walmart did in pulling its Q1 operating income guidance, what Delta Air Lines’s management said when yanking its full-year outlook, and what CarMax signaled in removing time frames for its financial goals.

The result is that implied correlations are doing the opposite of what they usually do in this window. The chart below shows the one-month change in S&P 500 implied correlations, with vertical lines marking days when JPMorgan reports. The market is saying that macro fears mean we can’t be too nuanced about how individual companies are doing.

As the old adage goes, in a crisis, all correlations go to one. And a recession, for both markets and humans, is a crisis, because as much as you might hate to hear it, the stock market is the economy. There’s a strong correlation between crescendoes in fear about the economy, as judged by mentions of “recession” in news articles, and the one-month implied correlation for the S&P 500.

That being said, traders are somewhat expecting a reduction in the intensity of the high-volume, everyone-in-or-out-of-the-pool environment we’ve been in during earnings season. That is to say, implied correlations are running below what the strong trading relationship between members of the S&P 500 has been over the past month.

Matt Phillips2h

AST SpaceMobile surges as satellite services theme gains market traction

Space stocks jumped on Thursday, led by a surge in AST SpaceMobile after Bell Canada named the Texas-based satellite services provider as a partner for a new direct-to-cellular service it plans to offer next year.

AST is up more than 20% just this week after announcing that its latest Bluebird 6 satellite was assembled, tested, and ready for launch and that its launch schedule appears to be on track.

“AST reiterated its expectation of launches every one to two months on average during 2025 and 2026, which is expected to result in between 45 and 60 satellites in orbit by the end of 2026,” wrote Louie DePalma, an analyst at William Blair. “Reaching 45 to 60 satellites in orbit is significant because it allows for continuous broadband coverage for AST’s core markets in the U.S., Europe, and Japan. We view this update positively.”

Space and satellite stocks Rocket Lab and Planet Labs ascended alongside AST Thursday. But all of these stocks are, in a sense, drafting off dynamics being driven by Tesla CEO Elon Musk’s SpaceX, the leader in the private space sector.

The company has played a key role in lowering the costs of space launches, thereby “fostering intense competition and accelerating innovation across the sector. This has led to significantly lower launch prices, reshaping the economics of deploying large-scale Low Earth Orbit constellations,” wrote Barclays analysts in a recent note on the outlook for the satellite industry. This has opened up new possibilities such as providing consumer broadband services, they noted.

Bell Canada to roll out direct-to-cell satellite service in 2026

“AST reiterated its expectation of launches every one to two months on average during 2025 and 2026, which is expected to result in between 45 and 60 satellites in orbit by the end of 2026,” wrote Louie DePalma, an analyst at William Blair. “Reaching 45 to 60 satellites in orbit is significant because it allows for continuous broadband coverage for AST’s core markets in the U.S., Europe, and Japan. We view this update positively.”

Luke Kawa3h

Bloom Energy falls as Mizuho downgrades the stock to “neutral” from “outperform”

There’s an immense need for power to fuel the AI data centers playing the starring role in driving up electricity prices.

Mizuho just isn’t sure that the high-flying fuel cell company Bloom Energy is well placed to provide it.

Analyst Maheep Mandloi cited the firm’s internal constraints on growth in lowering his rating on the stock to “neutral” from “outperform,” suggesting that Bloom will likely need to develop a bigger pipeline of customers before expanding its manufacturing footprint.

Still, he hiked his price target to $79 from $48 while downgrading the stock.

Last week, JPMorgan flagged that retail traders were beginning to sour on the shares, which had enjoyed a massive run-up that kicked into high gear thanks to a deal with Oracle announced in late July to supply power to data centers.

Wall Street is broadly negative on Bloom Energy, relative to most of the universe of the stocks the sell side covers. Its consensus rating, per analysts polled by Bloomberg, is just shy of 3.35. For reference, that’s a worse average rating than nearly 90% of the stocks in the S&P 500 (which Bloom is not a part of).

Jefferies downgraded the stock last week on the same day Bank of America analysts wrote, “We are still not buying into BE’s AI hype.” Nonetheless, most are still revising price targets higher to account for the stock’s move. But all that leaves the average price target well below where the shares are currently trading.

Matt Phillips3h

Western Digital, a top S&P stock over the last month, is attracting retail traders

We’ve been covering the sudden sexiness of data storage as a market theme a lot recently, with Western Digital and Seagate Technology Holdings turning into top trades of 2025.

The makers of relatively affordable data storage devices known as hard disk drives were leading the S&P 500 until recently, when they were supplanted by an index newbie.

WDC JPM Retail Radar Chart — A chart from JPM’s Retail Radar note showing increased retail buying of WDC.

But Western Digital, which has been trading at a discount to Seagate due to its spottier earnings record over the last couple years, seems to have suddenly found fans among the unwashed stock-trading masses, with JPMorgan’s always informative Retail Radar note spotlighting “strong buying in WDC rally” Wednesday as they climbed aboard a rally that has carried the shares up more than 60% over the last month.

Luke Kawa4h

Quantum computing stocks soar

Quantum stocks are going gangbusters in early trading on Thursday, with Rigetti Computing, D-Wave Quantum, IonQ, and Quantum Computing all up at least 5.5% as of 10:10 a.m. ET.

Surprisingly, most of these gains are taking place on relatively light volume (and a dearth of news) so far, though Rigetti and Quantum Computing are both enjoying elevated call demand, having already outstripped Wednesday’s call volumes traded a little over half an hour into the session.

The quantum space has benefited from a number of fresh deals with governments and affiliated agencies over the past month, with hopes of more to come, as the Trump administration recently highlighted quantum technology as an R&D budgetary priority for fiscal 2027.

Max Knoblauch5h

Rivian dips after lowering its full-year guidance while posting better-than-expected Q3 sales

Shares of EV maker Rivian dipped more than 3% in premarket trading on Thursday after the company reported its third-quarter production and delivery totals.

Rivian said it delivered 13,201 vehicles in the period ended September 30, beating analyst estimates of about 12,000. The figure represents a 32% jump from the same period last year, with the expiring EV tax credit boosting purchasing activity.

The company also narrowed its full-year delivery total to between 41,500 and 43,500 vehicles. That’s on the lower end of its prior range of 40,000 to 46,000 vehicles, likely fueling the investor pullback. That delivery outlook has been trending the wrong way: in April, the automaker was guiding for between 46,000 and 51,000 vehicles.

Tesla, the leader in the US EV market, sold a record 497,000 cars in Q3.