.png)
May 7, 2025
Dow: 41,065
S&P: 5632
Nasdaq: 17,500
10-YR T-Note: 4.3%
Bitcoin: 97,000
VIX: 24.6
Gold: $3,397
Crude Oil: 59.32
Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
U.S. stocks closed lower Tuesday as quarterly results show more companies are tempering their forecasts for upcoming profits because of uncertainty created by the President’s tariffs.
The Dow fell by 389 points to 40,829 led by selling in AMGN, SHW, GS, HON and UNH, with another late-day decline adding to the pain. The S&P followed the same pattern, for its second drop after breaking a nine-day winning streak, its longest such run in more than 20 years. It ended lower by 43 down to 5602 with many technology stocks and the financials doing the most damage.
The Nasdaq also collapsed late with a 154 point loss to 17,689 with PLTR doing the most damage while DASH fell on weak earnings. The Russell 2000 Index of small stocks did poorly with a 21 point decline down to 1983 due to financial weakness and the VIX rose to 24.76 according to weakness in equities.
As mentioned, PLTR sank 12% as the company, which offers an AI platform for customers, dropped even though it reported a profit for the latest quarter that met analysts’ expectations and raised its forecast for revenue over the full year.
AI-related companies have been finding it more difficult recently to convince investors to support their stocks after they have already shot so high. Its stock’s price remains near $110, when it was sitting at only $20 less than a year ago.
The return to earth for AI stocks is happening as Trump’s tariffs change the economic landscape for other companies.
CLX said that the company saw changes in shopping behavior during the first three months of the year, for example, which led to lower revenue. They reported both weaker revenue and profit for the latest quarter than analysts expected. It expects the slowdowns to continue in the current quarter, and its stock fell by 2.4%.
MAT meanwhile, said it’s “pausing” its financial forecasts for 2025, in part because the “evolving U.S. tariff landscape” is making it difficult to predict how much U.S. shoppers will spend over the holiday season and the rest of this year. But the toymaker closed 2.8% higher after also reporting better results for the latest quarter than analysts feared.
F said it is expecting to take a $1.5 billion hit this year because of tariffs. The automaker also said it’s cancelling financial forecasts for the full year because of “tariff-related uncertainty.” But the stock rose 2.7%.
They are the latest companies to join a lengthening list that have withdrawn their forecasts for the year given uncertainty about what Trump’s on-again, off-again rollout of tariffs will do to the economy. The hope is that Trump will relent on some of his tariffs after reaching trade deals with other countries. Without them, many investors expect the economy to fall into a recession.
Regardless, all the will-he-won’t-he uncertainty around tariffs has already made U.S. households more pessimistic about the economy and could affect their long-term plans for purchases. That uncertainty has helped fuel a surge in imports ahead of potentially more severe tariffs ahead.
The U.S. trade deficit soared to a record $140.5 billion in March as consumers and businesses alike tried to get ahead of tariffs that went into effect in April and others that have been postponed until July. That follows another update from last week showing that the U.S. economy shrank at a 0.3% annual pace during the first quarter of the year because of a surge in imports.
Some companies say they are already seeing impacts to their business from the uncertainty created by tariffs.
Food processing giant ADM said that operating profit for agricultural services slumped 31% during its most recent quarter because of trade policy uncertainty, but its stock managed a gain as well.
DASH fell after reporting weaker revenue than analysts expected for the latest quarter, though it may have also offered a more encouraging snapshot of how U.S. households are doing. The company said order growth in its U.S. marketplace remained healthy and consistent with average growth over the last year.
Treasury yields closed broadly lower in the bond market. The yield on the 10-year Treasury slipped to 4.31% from 4.36% late Monday.
The Federal Reserve will announce its next move on interest rates at 2pm today. Virtually no one expects it to do anything to the federal funds rate, even though Trump has been advocating for cuts. So we would suggest holding off until the rate announcement and news conference after that before making a large investment decision.
And after two straight lower days to start the week, things look higher on the opening because of a meeting this weekend in Switzerland between U.S. and Chinese officials to talk about the tariff and trade situation and the hope that something positive will emerge from this.
Earnings continue this week with the following lineup: yesterday - CLX, HIMS, PLTR, DASH lower; RACE, DUK, UPWK, F, MAT and MAR higher; today - AMD, ANET, EA, ET, Dow component DIS higher and SMCI, WYNN, RIVN, UBER, MRVL, SMCI lower; Thursday – AKAM, COIN.
Economic reports will see: yesterday – March trade deficit rose to $140.5 billion; today – F.O.M.C. fed rate decision, at which they are expected to keep the funds rate unchanged at 4.25% to 4.5%, and let us see the administration response that follows this one; Thursday – weekly jobless claims.
