Luke Kawa3/28/25

US stocks slump into the weekend on turmoil with tariffs and tech

Friday was the same as Thursday — only worse.

Stocks tumbled and dip buyers were nowhere to be found, with the lowest share of up volumes across the New York Stock Exchange of this year. The S&P 500 fell just shy of 2%, the Russell 2000 was down 2.1%, and the Nasdaq 100 ended off 2.6%.

The pummeling of megacap tech stocks and tariff-sensitive companies was in focus to end the week. Consumer discretionary, communication services, tech, and industrials were the worst-performing S&P 500 sector ETFs, all down more than 2%.

Credit spreads also hit their widest levels of the year, signaling enhanced fear about a US economic slowdown.

Tesla tumbled as the analyst community warned the electric vehicle maker isn’t immune from tariffs and ahead of Q1 delivery results next week that are expected to be weak.

A fresh push from the US Department of Defense to cut software costs weighed on shares of Palantir.

Crypto-linked stocks like Strategy, Coinbase, and Robinhood sank along with bitcoin in the broad-based risk retreat.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company.)

Lululemon had its worst day in more than a year after issuing a weak full-year sales forecast.

Ubisoft’s plans to spin off some of its major franchises were initially greeted warmly by investors before the stock got caught up in the sell-off and was shellacked.

Airlines continued their retreat, with Delta Air Lines, Southwest Airlines, American Airlines, and United Airlines shedding about $5 billion in value this week.

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Helena Cheng22h

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.

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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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