My underlying bullishness remains intact, says Ed Yardeni
Ed Yardeni, Yardeni Research president, joins 'Squawk Box' to discuss the latest market trends, state of the economy, impact of the administration's policy uncertainty, what to make of the recent bond market volatility, and more.
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Yahoo
14 hours ago
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq close higher as US-China trade tensions flare up
US stocks closed higher on Monday as investors largely shrugged off escalating US trade tensions with China and the European Union. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. China hit back at President Trump's claim that it violated the Geneva tariff truce on Monday, blaming the US instead for failing to keep up its end of the deal. The mutual finger-pointing has undermined hopes for a revival of trade talks between the two top economies and stoked lingering trade uncertainty. The escalation comes after Trump ratcheted up pressure on Friday, saying he would double US tariffs on imported steel and aluminum to 50% from 25%. While a federal court last week struck down significant portions of Trump's duties, easing market fears, a higher court temporarily reinstated the duties a day later to allow legal proceedings to continue. Meanwhile, the EU said Monday that it opposed Trump's steel and aluminum escalation, throwing a wrench into those looming talks. The US dollar ( fell as markets assessed trade-war risks, with rising inflation and slowing growth in particular focus. Meanwhile, gold (GC=F) futures rose amid demand for safer assets. Against this backdrop, all eyes now turn to a critical slate of economic data this week — most notably the May nonfarm payrolls report due Friday, which will offer fresh clues on how trade frictions and interest rate expectations are shaping the broader US economy. On Monday, new data from the Institute for Supply Management showed economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%.
Yahoo
14 hours ago
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq close higher as US-China trade tensions flare up
US stocks closed higher on Monday as investors largely shrugged off escalating US trade tensions with China and the European Union. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. China hit back at President Trump's claim that it violated the Geneva tariff truce on Monday, blaming the US instead for failing to keep up its end of the deal. The mutual finger-pointing has undermined hopes for a revival of trade talks between the two top economies and stoked lingering trade uncertainty. The escalation comes after Trump ratcheted up pressure on Friday, saying he would double US tariffs on imported steel and aluminum to 50% from 25%. While a federal court last week struck down significant portions of Trump's duties, easing market fears, a higher court temporarily reinstated the duties a day later to allow legal proceedings to continue. Meanwhile, the EU said Monday that it opposed Trump's steel and aluminum escalation, throwing a wrench into those looming talks. The US dollar ( fell as markets assessed trade-war risks, with rising inflation and slowing growth in particular focus. Meanwhile, gold (GC=F) futures rose amid demand for safer assets. Against this backdrop, all eyes now turn to a critical slate of economic data this week — most notably the May nonfarm payrolls report due Friday, which will offer fresh clues on how trade frictions and interest rate expectations are shaping the broader US economy. On Monday, new data from the Institute for Supply Management showed economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%.
CNBC
17 hours ago
- CNBC
Private equity firm Roark Capital invests in fast-growing restaurant chain Dave's Hot Chicken
Private equity firm Roark Capital has bought a majority stake in Dave's Hot Chicken, the company announced on Monday. Financial terms were not disclosed, but Dave's CEO Bill Phelps said on CNBC's "Squawk Box" that the reported $1 billion valuation for the deal is "pretty close." Since its founding in a Los Angeles parking lot in 2017, the fast-growing chicken chain has expanded to more than 300 locations by franchising its restaurants. Dave's U.S. sales soared 57% last year and surpassed $600 million, according to data from market research firm Technomic. Roark's investment follows a boom for chicken-focused restaurants, fueled by the so-called "Chicken Sandwich Wars" sparked by Popeyes in 2019. A wave of quickly expanding upstarts, like Dave's and Raising Cane's, have challenged legacy chains like Yum Brands' KFC, further boosting the category's growth. Dave's success also comes as younger consumers seek more heat in their food. The chain offers a diverse range for the chicken's "hotness" — from no spice to "Reaper," which requires the orderer to waive liability. The Reaper has sent at least one customer to the hospital; co-founder and Chief Business Officer Arman Oganesyan said the diner who signed the waiver offered a bite to her boyfriend, who couldn't handle the heat. But the restaurant's menu overall is small and focused on its oversized chicken tenders, which can also be inserted into a bun to make sliders. According to Oganesyan, its sliders are the perfect size to eat with one hand, leaving the other free to scroll on a phone. Phelps, who previously led Wetzel's Pretzels for 25 years, joined Dave's in 2019, less than two years after its founding. Co-founders Dave Kopushyan, Tommy Rubenyan and Oganesyan have stuck around and plan to continue in their roles after the deal closes. Along with Phelps, they're also holding onto their equity as minority stakeholders. "The timing was absolutely right," Phelps said. "We were at an inflection point where we could get an incredible valuation, and yet there was still significant upside for Roark, so that's the perfect place to be. "Roark has the ability to use their international supply chain to reduce the costs. And it's a better deal for the franchisees, but they also have the international ability to grow with all of their franchisees around the world, so we have an opportunity to blow this thing up very quickly," he added. Looking ahead, Dave's could reach up to 4,000 locations worldwide over the next 10 years, Phelps said. So far, Dave's has resisted conforming to industry practices, like focusing on speed of service, switching to cheaper ingredients or expanding its short menu. Sticking to many of its founders' original practices allowed the chain to keep the quality of its signature chicken high even as it opens new restaurants every day, Dave's COO and President Jim Bitticks said. Executives don't expect that to change under Roark's ownership either. "How did we get to that billion-dollar brand status? We leaned into what they created, rather than adjusting it or changing it based on conventional wisdom," Bitticks said. The deal marks Roark's first restaurant deal since the firm's blockbuster purchase of Subway for a reported $9.6 billion in 2023. Roark's portfolio also includes two holding companies, Inspire Brands and GoTo Foods, that collectively own more than a dozen restaurant brands, like Arby's, Dunkin' and Cinnabon. Roark has been keeping an eye on Dave's since the early days. "They came to our 15-store grand opening," Oganesyan said. "We'd see them at conferences all the time. They understood the potential of the brand. ... When the time came where we needed that new investor to come in, they were some of the only people on our minds. Early Dave's investors aren't the only ones making money from the deal. Masterminded by Phelps, the company plans to give dozens of its employees, from its support center team to restaurant assistant managers, significant bonuses. "He literally made 20 millionaires," Oganesyan said.
