This week’s winners were companies whose revenue exceeded analyst estimates, but drug and medical stocks continued to decline.
US stocks fell slightly this week, ending a nine-day winning streak and pushed the S&P 500 Index and Dow Jones industrial average to within 5% last fall. Market activity was dominated by headlines on financial and trade policy, obscuring the ongoing revenue stream.
The S&P 500 ended at 5,659 on May 9, down 0.47% for the week. The Dow fell 0.16% to close at 41,249. Nasdaq fell 0.27% to 17,928, while Russell 2000 closed at 2,023, up 0.12%.
Industrial conglomerate Rockwell Automation was another standout. The stock rose 16.22% after reporting strong financial results.
The third winner was Advanced Micro Devices, which in that week rose 4.05% in one week in strong revenues and revenues, based on the growth of the data center business segment.
Due to revenue and pricing concerns, the pinnacle pharmaceutical and medical stocks were among the losers this week. Couple stocks fell sharply on May 6th after reporting lower than expected first-quarter earnings. Regeneron Pharmaceuticals and Gilead Sciences declined, and UnitedHealthcare has extended their losing streak since the last two weeks in response to a disappointing outcome.
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Trade has been volatile this week, with the Chicago Commission’s option exchange volatility index rising early in the Federal Reserve meeting and easing towards the end. Bullish and bearish traders were caught between positive and negative Fed headlines, mixed economic reporting and trade development, with neither side gaining an edge.
The stock opened on the morning of May 5th after nine consecutive days of profit. However, trading has become volatile as a “buy” crowd helped the market recover by May 6, with prices turning sideways than the Federal Reserve policy announcement on May 7.
It turned out to be a non-market moving event as the country’s central banks, as expected, cited a resilient economy operating near a dual mission of price stability and maximum employment, to ensure that it did not change as expected. However, if the economy continued to weaken and inflation continued to be easier, the doors were left open for interest rate cuts later in the year.
Natalie Hwang, founding and managing partner of Apeira Capital, noted that the Fed’s restraint in policy change reflects the complexity of today’s macro environment.
“We are the moment when policy attention is wise,” she told the Epoch Times via email.
“For the private market, meaningful changes in exit activity require more than rate stability. They depend on a broader recovery in market trust, sustained revenue growth and greater clarity in the inflation trajectory,” Fan said.
Robert Frick, a corporate economist with the Navy Federal Credit Union, believes interest rate cuts appear to be increasingly low due to growing Fed concerns about tariff-driven inflation.
“Despite the market’s expectations for three cuts this year, the Fed’s main goal is to cover up inflation as much as possible, which will prioritize rising unemployment.
“Economists generally believe that tariffs will increase CPI to 3.5% and 4%, but they underestimate the inflation caused by supply chain disruptions in the Covid era.”
However, these concerns were eased on May 8 after a headline from Washington reported a trade deal with the UK, helping stocks rise on May 9 ahead of US-China trade talks over the weekend in Switzerland.
Emily Bowersock Hill, CEO and founding partner of Lawrence, Kansas-based Bowersock Capital Partners, manages $850 million in assets under management and hopes investors will continue to settle from the economically sensitive sector.
She told the Epoch Times that the Federal Reserve is unlikely to lower fees until July 8th, when the 90-day tariff suspension ends.
Hill’s year-end target price is 6,000, the year-end target price for the S&P 500. “This has been a huge drop from where we started the year, but it’s almost 6% above the current price,” she said.
“If we’re right, we’ll end the year with single-digit returns on the US stock market. Given the characteristic returns for 2023 and 2024, this profit is not surprising.
