Stocks Climb on Possible US-China Trade Talks and a Resilient US Labor Market
The S&P 500 Index ($SPX) (SPY) today is up +1.07%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.06%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.15%. June E-mini S&P futures (ESM25) are up +0.99%, and June E-mini Nasdaq futures (NQM25) are up +1.09%.
Stock indexes today are trading higher, with the S&P 500 and the Dow Jones Industrials posting 1-month highs and the Nasdaq 100 posting a 5-week high. Stocks are climbing today on a possible thaw in the US-China trade stalemate. China's Commerce Ministry is assessing the possibility of trade talks with the US. Today, it said, 'The US has recently sent messages to China through relevant parties, hoping to start trade talks with China, and we are currently evaluating this.'
Stocks added to their gains on signs the US labor market remains resilient with slack wage pressures after Apr nonfarm payrolls rose more than expected and Apr average hourly earnings rose less than expected.
US Apr nonfarm payrolls rose +177,000, stronger than expectations of +138,000, although Mar nonfarm payrolls were revised lower by 43,000 jobs to +185,000 from the previously reported +228,000. The Apr unemployment rate was unchanged at 4.2%, right in line with expectations.
US Apr average hourly earnings rose +0.2% m/m and +3.8% y/y, slightly weaker than expectations of +0.3% m/m and +3.9% y/y.
The weakness in some megacap technology stocks is limiting the upside in the overall market. Apple is down more than -4% after it reported falling China sales and warned that tariffs will increase costs. Also, Amazon.com is down more than -1% after it gave a weaker-than-expected outlook for operating income and said it is bracing for a tougher business climate.
The markets are discounting the chances at 3% for a -25 bp rate cut after the May 6-7 FOMC meeting.
Q1 earnings reporting season is in full swing. According to data compiled by Bloomberg Intelligence, the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500 stocks, down from expectations of +11.1% in early November. So far, of the 303 companies in the S&P 500 companies that have reported quarterly results, 78% have beaten estimates. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.
Overseas stock markets today are higher. The Euro Stoxx 50 climbed to a 1-month high and is up +2.08%. China's Shanghai Composite was closed for the Labor Day holiday. Japan's Nikkei Stock 225 rallied to a 5-week high and closed up +1.04%.
Interest Rates
June 10-year T-notes (ZNM2 5) today are down -16 ticks. The 10-year T-note yield is up +6.9 bp to 4.287%. June T-notes today are under pressure from a larger-than-expected increase in US Apr nonfarm payrolls. Also, a possible thaw in the US-China trade war has curbed safe-haven demand for T-notes after China's Commerce Ministry said it is assessing the possibility of trade talks with the US. Today's stock rally has also reduced safe-haven demand for T-notes.
Losses in T-notes are contained due to benign US wage pressures after Apr average hourly earnings rose less than expected. T-notes also have carryover support from today's rally in 10-year UK gilts to a 3-1/2 week high.
European government bond yields today are mixed. The 10-year German bund yield is up +5.0 bp to 2.494%. The 10-year UK gilt yield fell to a 3-1/2 week low of 4.408% and is down -1.8 bp to 4.463%.
The Eurozone Apr core CPI was revised upward to 2.7% y/y from the previously reported 2.4% y/y.
The Eurozone Apr S&P manufacturing PMI was revised upward by +0.3 to 49.0 from the previously reported 48.7.
The Eurozone Mar unemployment rate was unchanged at a record low 6.2%.
Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at the June 5 policy meeting.
US Stock Movers
Chip stocks are rallying today and are giving the broader market a boost. Lam Research (LRCX) and Microchip Technology (MCHP) are up more than +4%. Also, Nvidia (NVDA), Applied Materials (AMAT), ON Semiconductor (ON), KLA Corp (KLAC), GlobalFoundries (GFS), Texas Instruments (TXN), and Micron Technology (MU) are up more than +3%.
Travel stocks are moving higher today on signs of economic strength after US Apr nonfarm payrolls rose more than expected. Delta Air Lines (DAL), United Airlines Holdings (UAL), and Norwegian Cruise Line Holdings (NCLH) are up more than +4%. Also, Southwest Airlines (LUV) and Carnival (CCL) are up more than +3%.
Dexcom (DXCM) is up more than +14% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $1.04 billion, better than the consensus of $1.02 billion.
Exact Sciences (EXAS) is up more than +10% after reporting Q1 revenue of $706.8 million, better than the consensus of $688.7 million, and raised its full-year revenue forecast to $3.07 billion-$3.12 billion from a previous estimate of $3.03 billion-$3.09 billion, stronger than the consensus of $3.06 billion.
Duolingo (DUOL) is up more than +12% after boosting its full-year bookings estimate to $1.12 billion- $1.13 billion from a previous estimate of $1.08 billion-$1.10 billion, stronger than the consensus of $1.09 billion.
US-listed Chinese stocks are climbing after China's Commerce Ministry is assessing the possibility of trade talks with the US. As a result, PDD Holdings (PDD), JD.com (JD), Baidu (BIDU), and Alibaba Group Holding Ltd (BABA) are up more than +2%.
Apple (AAPL) is down more than -4% to lead losers in the Dow Jones Industrials after reporting Q2 greater China revenue of $16.00 billion, weaker than the consensus of $16.83 billion.
Amazon.com (AMZN) is down more than -1% after forecasting Q2 operating income of $13.0 billion to $17.5 billion, weaker than the consensus of $17.82 billion.
Block (XYZ) is down more than -23% after reporting Q1 net revenue of $5.77 billion, weaker than the consensus of $6.22 billion, and cut its full-year adjusted operating income estimate to $1.9 billion from a previous estimate of $2.1 billion, below the consensus of $2.12 billion.
Motorola Solutions (MSI) is down more than -8% to lead losers in the S&P 500 after forecasting Q2 adjusted EPS of $3.32-$3.37, weaker than the consensus of $3.47.
Take-Two Interactive Software (TTWO) is down more than -8% to lead losers in the Nasdaq 100 after announcing a delay in releasing the Grand Theft Auto VI game.
Atlassian (TEAM) is down more than -7% after forecasting Q4 revenue of $1.35 billion to $1.36 billion, the midpoint below the consensus of $1.36 billion.
Airbnb (ABNB) is down more than -2% after forecasting Q2 revenue of $2.99 billion to $3.05 billion, the midpoint below the consensus of $3.03 billion.
Earnings Reports (5/2/2025)
AES Corp/The (AES), Apollo Global Management Inc (APO), Cboe Global Markets Inc (CBOE), Chevron Corp (CVX), Cigna Group/The (CI), DaVita Inc (DVA), DuPont de Nemours Inc (DD), Eaton Corp PLC (ETN), Exxon Mobil Corp (XOM), Franklin Resources Inc (BEN), Monster Beverage Corp (MNST), T Rowe Price Group Inc (TROW).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
2 hours ago
- Global News
Global streamers fight CRTC's rule requiring them to fund Canadian content
Some of the world's biggest streaming companies will argue in court on Monday that they shouldn't have to make CRTC-ordered financial contributions to Canadian content and news. The companies are fighting an order from the federal broadcast regulator that says they must pay five per cent of their annual Canadian revenues to funds devoted to producing Canadian content, including local TV news. The case, which consolidates several appeals by streamers, will be heard by the Federal Court of Appeal in Toronto. Apple, Amazon and Spotify are fighting the CRTC's 2024 order. Motion Picture Association-Canada, which represents such companies as Netflix and Paramount, is challenging a section of the CRTC's order requiring them to contribute to local news. In December, the court put a pause on the payments — estimated to be at least $1.25 million annually per company. Amazon, Apple and Spotify had argued that if they made the payments and then won the appeal and overturned the CRTC order, they wouldn't be able to recover the money. Story continues below advertisement In court documents, the streamers put forward a long list of arguments on why they shouldn't have to pay, including technical points regarding the CRTC's powers under the Broadcasting Act. Spotify argued that the contribution requirement amounts to a tax, which the CRTC doesn't have the authority to impose. The music streamer also took issue with the CRTC requiring the payments without first deciding how it will define Canadian content. Amazon argued the federal cabinet specified the CRTC's requirements have to be 'equitable.' It said the contribution requirement is 'inequitable because it applies only to foreign online undertakings and only to such undertakings with more than $25 million in annual Canadian broadcasting revenues.' Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Apple also said the regulator 'acted prematurely' and argued the CRTC didn't consider whether the order was 'equitable.' It pointed out Apple is required to contribute five per cent, while radio stations must only pay 0.5 per cent — and streamers don't have the same access to the funds into which they pay. The CRTC imposes different rules on Canadian content contributions from traditional media players. It requires large English-language broadcasters to contribute 30 per cent of revenues to Canadian programming. Motion Picture Association—Canada is only challenging one aspect of the CRTC's order — the part requiring companies to contribute 1.5 per cent of revenues to a fund for local news on independent TV stations. Story continues below advertisement It said in court documents that none of the streamers 'has any connection to news production' and argued the CRTC doesn't have the authority to require them to fund news. 'What the CRTC did, erroneously, is purport to justify the … contribution simply on the basis that local news is important and local news operations provided by independent television stations are short of money,' it said. 'That is a reason why news should be funded by someone, but is devoid of any analysis, legal or factual, as to why it is equitable for foreign online undertakings to fund Canadian news production.' In its response, the Canadian Association of Broadcasters said the CRTC has wide authority under the Broadcasting Act. It argued streamers have contributed to the funding crisis facing local news. 'While the industry was once dominated by traditional television and radio services, those services are now in decline, as Canadians increasingly turn to online streaming services,' the broadcasters said. 'For decades, traditional broadcasting undertakings have supported the production of Canadian content through a complex array of CRTC-directed measures … By contrast, online undertakings have not been required to provide any financial support to the Canadian broadcasting system, despite operating here for well over a decade.' A submission from the federal government in defence of the CRTC argued the regulator was within its rights to order the payments. Story continues below advertisement 'The orders challenged in these proceedings … are a valid exercise of the Canadian Radio-television and Telecommunications Commission's regulatory powers. These orders seek to remedy the inequity that has resulted from the ascendance of online streaming giants like the Appellants,' the office of the attorney general said. 'Online undertakings have greatly profited from their access to Canadian audiences, without any corresponding obligation to make meaningful contributions supporting Canadian programming and creators — an obligation that has long been imposed on traditional domestic broadcasters.' The government said that if the streamers get their way, that would preserve 'an inequitable circumstance in which domestic broadcasters — operating in an industry under economic strain — shoulder a disproportionate regulatory burden.' 'This result would be plainly out of step with the policy aims of Parliament' and cabinet, it added. The court hearing comes as trade tensions between the U.S. and Canada have cast a shadow over the CRTC's attempts to regulate online streamers. The regulator launched a suite of proceedings and hearings as part of its implementation of the Online Streaming Act, legislation that in 2023 updated the Broadcasting Act to set up the CRTC to regulate streaming companies. In January, as U.S. President Donald Trump was inaugurated for his second term, groups representing U.S. businesses and big tech companies warned the CRTC that its efforts to modernize Canadian content rules could worsen trade relations and lead to retaliation. Story continues below advertisement Then, as the CRTC launched its hearing on modernizing the definition of Canadian content in May, Netflix, Paramount and Apple cancelled their individual appearances. While the companies didn't provide a reason, the move came shortly after Trump threatened to impose a tariff of up to 100 per cent on movies made outside the United States. Foreign streamers have long pointed to their existing spending in Canada in response to calls to bring them into the regulated system.
Globe and Mail
3 hours ago
- Globe and Mail
Warren Buffett's AI Bets: 22% of Berkshire Hathaway's $282 Billion Stock Portfolio Is in These 2 Artificial Intelligence Stocks
At the end of this year, Warren Buffett will be stepping down as Berkshire Hathaway 's CEO. Buffett has built an incredible track record of success since taking over the business in 1965 and using it as the foundation for an investment conglomerate that would go on to become one of the world's largest and most successful companies. Buffett mostly made his name and delivered fantastic returns for shareholders through the principles of value investing, but Berkshire has also come to have a larger exposure to technology trends and growth stocks in recent years. And in the tech space, no trend is bigger or more important than artificial intelligence (AI) right now. With that in mind, read on for a look at two stocks that account for roughly 22% of Berkshire Hathaway's $282 billion stock portfolio. 1. Apple Keith Noonan (Apple): With a market capitalization of $3 trillion, Apple (NASDAQ: AAPL) stands as the world's third-largest company, trailing only Microsoft and Nvidia. Coming in at 21.6% of Berkshire's total stock portfolio, it's also the investment conglomerate's single largest publicly traded company. It retains that distinction even though Buffett's company sold more than 600 million shares of Apple stock last year. In general, Berkshire Hathaway has been reducing its stock holdings and building up its cash position recently. The move likely reflects concerns that the market at large has become expensive relative to the level of macroeconomic and geopolitical risks that Berkshire's analysts see on the horizon. On the other hand, the move to significantly reduce its Apple holdings likely reflects some specific concerns facing the business. While Apple's leading position in mobile hardware gives it a strong foundation to build out its artificial intelligence (AI) business, the company also seems to be behind leading players including Microsoft, Alphabet, and Meta Platforms in some key respects. For example, Apple has reportedly had significant trouble getting its next-gen, AI-powered Siri platform up to the performance levels that developers were targeting. Additionally, Apple is facing some significant challenges in the Chinese market. The rollout of the company's Apple Intelligence platform was delayed last year because Apple had not found a Chinese company to partner with to roll out the software locally. As a result, sales for the iPhone 16 were relatively soft in the market. The mobile hardware giant has now partnered with Alibaba Group Holding to make its AI software available, but Chinese customers are still showing increased preference for domestic technology brands -- and geopolitical dynamics could create continued headwinds. Berkshire's move to reduce its position in Apple has meant that Buffett's company has also actually reduced its investment exposure to the overall AI trend. On the other hand, Apple has still retained its status as Berkshire's largest stock holding -- and it seems clear that Buffett remains a big fan of the business. Apple has yet to match the AI successes of some other top tech players, but the company's many strengths suggest it still has many opportunities to be a big winner in the space. 2. Amazon Jennifer Saibil (Amazon): Amazon (NASDAQ: AMZN) makes up a small percentage of the Berkshire Hathaway portfolio, and Buffett didn't even buy it. He said that one of the portfolio's investing managers, Todd Combs or Ted Weschler, pushed the button on Amazon stock, because tech isn't really in his wheelhouse. However, he's also said that he made a mistake by not buying it earlier. Amazon is so much more than AI, but generative AI is leading it forward today, representing its greatest growth opportunities. Amazon Web Services (AWS) is Amazon's cloud computing business, where much of the generative AI is taking place. It's the largest cloud services business in the world, with 30% of the market, according to Statista. CEO Andy Jassy believes that very soon all apps will be built with a generative AI component, like databases and storage today. Most of that is going to be built on the cloud, and as the leader, Amazon will account for a vast amount of it. "Before this generation of AI, we thought AWS had the chance to ultimately be a multi-hundred-billion dollar revenue run rate business," Jassy said on a recent earnings call. "We now think it could be even larger." To make that happen, Amazon offers the largest assortment of generative AI tools and services throughout the three layers of its program. The bottom layer is complete customization for its largest clients to build their own large language models (LLMs), the foundation of generative AI. The middle layer is semi-custom solutions through the Amazon Bedrock program, and Amazon offers several tools in the top layer for small businesses that need ready-made programs. These are tools like the ability to create full product descriptions based on prompts. AWS already pulls more than its own weight for Amazon. Sales increased 17% year over year in the first quarter, making it the second-fastest-growing segment behind advertising, and it accounted for 63% of operating income. Will Berkshire Hathaway buy more Amazon stock after Buffett steps down as CEO at the end of the year? It will be interesting to see whether or not the equity positions change without Buffett in the top spot. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in Apple. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
3 hours ago
- Globe and Mail
3 Top AI Stocks to Buy in June 2025
The U.S. equity market made a strong recovery in May 2025, fueled by robust earnings, decreasing trade tensions, and rising investor confidence in the U.S. economy -- a significant improvement compared to the market's performance in April 2025. Now, Deutsche Bank analysts have raised the target for the benchmark S&P 500 index from 6,150 to 6,550 by the end of 2025. Given this renewed market optimism, artificial intelligence (AI) stocks are poised to be key beneficiaries of the next wave of capital inflows. Long-term investors can benefit from this trend by investing in these high-quality, artificial intelligence (AI)-powered companies that offer significant growth potential in the evolving market landscape. June is a good time to take a closer look at these three top AI stocks. 1. Nvidia Nvidia (NASDAQ: NVDA) has reported stellar results for the first quarter of fiscal 2026 (ended April 27, 2025). The company reported revenue of $44.1 billion, representing a 69% year-over-year increase. Nvidia also generated a solid $26 billion in free cash flow. Nvidia currently accounts for nearly 80% of the AI accelerator market. While a dominant presence in AI training workloads, the company is also focused on inference (real-time deployment of pre-trained models) workloads. The company is at the forefront of handling reasoning workloads (computationally intense and complex inference workloads) with its Blackwell architecture systems. Major cloud providers are already deploying these chips at a massive scale -- almost 72,000 GPUs weekly -- and plan to ramp up even more in the coming quarter. Hence, Blackwell is powering the next phase of AI where technology is thinking longer, solving problems, and giving better answers than just responding with pre-written answers. Besides hardware leadership, Nvidia's robust software ecosystem has ensured developer lock-in and a sticky customer base. With the CUDA parallel programming platform, TensorRT for deployment, and NIM microservices for inference, clients find it extremely costly and time-consuming to switch to competitors. The company has also built a healthy networking business, with this segment's revenue growing 64% quarter over quarter to $5 billion in the first quarter. Thanks to the technological superiority of its comprehensive ecosystem, Nvidia managed to provide a healthy outlook for fiscal 2026's Q2, despite its revenue being negatively affected by nearly $8 billion due to export restrictions for the Chinese market. Nvidia stock trades at 31.8 times forward earnings, which is not a particularly cheap valuation. But considering its growth trajectory and competitive advantages, Nvidia is a smart AI pick now, even at elevated valuation levels. 2. Broadcom Broadcom (NASDAQ: AVGO) has emerged as a prominent AI infrastructure player in 2025. The company's custom AI chips and networking solutions are being increasingly used by three prominent hyperscaler clients -- rumored to be Alphabet, Meta Platforms, and Chinese company ByteDance -- to optimize the execution of their specific workloads. CEO Hock Tan expects the three hyperscalers to generate a serviceable addressable market (SAM) of $60 billion to $90 billion in fiscal 2027. Additionally, the company is engaging with four additional hyperscalers to develop custom chips, underscoring the even larger market potential. Beyond custom chips, Broadcom is building the critical networking infrastructure that enables the training and deployment of large and powerful frontier AI models. The company's recent $69 billion acquisition of VMware positioned it as a key player in the enterprise software and hybrid cloud infrastructure space. With VMware's cloud orchestration and virtualization technologies, Broadcom can offer full-stack AI infrastructure solutions to its clients. Broadcom stock currently trades at 37.8 times forward earnings. However, considering its critical role in building global AI infrastructure, the company is an excellent pick, despite the rich valuation. 3. CoreWeave Previously a cryptocurrency mining operator, CoreWeave (NASDAQ: CRWV) has now positioned itself as a prominent "AI Hyperscaler." Unlike traditional hyperscalers such as Amazon 's AWS, Microsoft 's Azure, or Alphabet's Google Cloud Platform, which are primarily designed for general-purpose applications, CoreWeave's cloud infrastructure has been specifically designed for AI and machine-learning workloads. The company has established an extensive network of 33 purpose-built AI data centers across the United States and Europe. Solid demand for CoreWeave's specialized AI-first cloud infrastructure is directly driving its exceptional financial performance. The company reported $982 million in revenue in the first quarter of fiscal 2025, up 420% year over year. At the same time, the company's adjusted operating income rose 550% year over year to $163 million. This highlights that the company is on its way to becoming profitable, despite the high level of capital expenditures typical in the AI data center business. The company had a massive $25.9 billion revenue backlog from multi-year contracts at end of the first quarter. CoreWeave's strategic partnership with Nvidia is proving to be a significant competitive advantage. The deep relationship has given the company preferential access to Nvidia's cutting-edge GPUs and advanced networking technologies. With Nvidia having more than a $2.5 billion equity stake in CoreWeave (at current prices), the latter is practically assured of continued access to next-generation GPUs in the coming years. CoreWeave stock currently trades at 37.5 times sales, which seems quite rich. However, the elevated valuation is justified considering the company's huge addressable market, robust contract backlog, and impressive financial performance, making it a buy now. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
