Markets
Nia Warfield, Luke Kawa

US stocks surge on solid earnings and dearth of negative trade headlines

US stocks started out the session flat and proceeded to rise throughout the rest of the day, as sentiment and positioning continued to repair with the absence of any negative headlines on global trade.

The S&P 500 and Russell 2000 rose 2% while the Nasdaq 100 outperformed with a 2.8% gain.

Tech was the standout gainer among S&P 500 sector ETFs, while industrials, materials, and communications services also booked advances of more than 2%. Consumer staples were the worst-performing sector, with disappointing earnings results and a general move away from safer stocks weighing on the group.

ServiceNow and Hasbro led the S&P 500’s gains after topping earnings expectations. ServiceNow benefited from a significant boost in government sales. Meanwhile, Hasbro cashed in on its high-margin game licensing deals. The two were only a few out of a barrage of quarterly results from major companies across industries. 

Airlines faced turbulence as American Airlines and Southwest Airlines both pulled their full-year guidance, citing rising costs and tariff uncertainty.

Media giant Comcast posted a strong Q1 earnings beat but saw its stock fall as broadband customer losses had Wall Street rethinking the future of its cable business.

Procter & Gamble shares slid after the consumer staples giant slashed its sales outlook in response to “challenging and volatile” economic conditions and said it planned to raise prices. 

Kering shares reversed their losses on the day even as the luxury giant missed first-quarter sales targets and warned of further challenges ahead.

Texas Instruments surged after the chipmaker broke a multiyear streak of declining sales, signaling recovery and growth prospects.

IBM shares fell by the most in nearly a year, despite posting strong Q1 results, as investors fear that Elon Musk-led DOGE inquiries could jeopardize the company’s government contracts.

United Rentals shares soared after the world’s largest equipment company said it would likely benefit from ongoing trade uncertainties.

Outside of earnings… Nintendo surged after preorders for its highly anticipated Switch 2 consoles finally kicked off in the US after a weeks-long delay due to tariffs.

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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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