The stock market rally had a solid week, with the S&P 500 and Nasdaq trying to clear recent ranges. Elon Musk and President Donald Trump had a massive meltdown, slamming Tesla stock, though it pared losses. Meta Platforms signed a big nuclear power deal with Constellation Energy, but CEG and many nuclear stocks reversed lower. Credo Technology, Guidewire Software, Argan were earnings winners while Broadcom was among many losers. Treasury yields reversed higher from solid losses on a reasonably solid jobs report.
Stock Market Rises
The Nasdaq and S&P 500 cleared their recent ranges, though perhaps not decisively, while the Dow Jones reclaimed its 200-day line and tested recent highs. A number of leading stocks flashed buy signals, though a few ran into trouble. Elon Musk and President Donald Trump feuded, triggering big Tesla losses. Treasury yields reversed higher for the week on Friday's jobs report.
Jobs Report
The May jobs report's 139,000 rise in nonfarm payrolls was decent enough to deflate the chances an inflation-wary Fed will resume rate cuts this summer. But the labor market appears to be verging on a slump. The private sector added 140,000 positions. The federal government, in a hiring freeze, shed 22,000 jobs, which was mostly offset by state and local hiring. However, the prior two months' overall job gains were revised down by a combined 95,000. The separate household survey showed the jobless rate holding steady at 4.2%, but only because of the drop in labor force participants. Those working or looking for work dived by 625,000 – almost as much as the 696,000 plunge in the ranks of the employed. Fresher data shows jobless claims rising 8,000 to 247,000 in the last week of May, well above the sub-220,000 readings early this year.
Tesla Dives On Trump-Musk Feud
A feud between Tesla and SpaceX CEO Elon Musk and President Trump quickly boiled over. Musk's harsh criticism of the Trump budget "abomination" led to nasty personal attacks on Thursday, often on social media. Trump finally threatened to terminate Musk's government contracts while Musk briefly threatened to decommission the SpaceX Dragon capsule that ferries crew to and from the International Space Station. There was some effort to defuse tensions, at least publicly. Meanwhile, Tesla sales in China and Europe remain weak, while the robotaxi launch in Austin looms. Tesla stock crashed 14.3% on Thursday, knifing through key support levels and an aggressive buy point. Shares bounced Friday, but hit resistance at the 200-day line.
Broadcom Posts Slight Beat
Broadcom narrowly beat estimates for its fiscal second quarter and with its guidance. The fabless chipmaker and infrastructure software provider's earnings grew 44% with revenue up 20% to $15 billion. AI chip revenue grew 46% to more than $4.4 billion. For the current quarter, Broadcom is targeting AI chip sales of $5.1 billion, with total sales rising 21% to $15.8 billion. Still, Broadcom stock fell.
Cybersecurity Leaders Beat Views
With much of Wall Street still focused on the impact of 2024's global IT outage on customer contract renewals, CrowdStrike Holdings said earnings fell 8% while revenue rose 20% to $1.1 billion and annual recurring revenue increased 22% to $4.44 billion. All modestly beat views. CrowdStrike guided up on Q2 EPS but down on revenue. The cybersecurity firm also raised its stock buyback to $1 billion. Shares tumbled from record highs on earnings, but only fell modestly for the week. Rubrik reported a smaller-than-expected Q1 loss of 15 cents vs. a $1.58 per share loss a year earlier. Revenue rose 49% to $278.5 million, topping estimates. For the July quarter Rubrik guided revenue higher. Rubrik sells a cloud-computing data backup and recovery platform aimed at warding off ransomware attacks.
Discount Retailers Beat, Raise Outlooks
Specialty discounters lifted their outlooks amid a string of better-than-expected earnings. Dollar General stock vaulted out of a base on Thursday after reporting its first year-over-year EPS gain in nine quarters. Dollar Tree reported a 2% EPS gain on 11.3% revenue growth, with results adjusted to reflect the upcoming sale of its Family Dollar segment. Shares jumped to an eight-month high despite initially tumbling on results. Ollie's Bargain Outlet reported a surprise EPS gain of 3%. The closeout retailer raised sales targets but stuck with EPS goals, which are below consensus at the midpoint. Shares initially fell but rebounded for a gain. Five Below surged to an 11-month best on a 43% EPS gain on a 20% revenue rise.
Costco Wholesale reported May same-store sales excluding currency swings and gasoline rose 6%, or 5.5% in the U.S. But both were slower than in April. Shares fell solidly below buy points.
Meta-Constellation Deal Splits Nuke Stocks
Constellation Energy announced a 20-year nuclear power deal with Facebook-parent Meta Platforms, with the tech giant buying more than 1.1 gigawatts of electricity from the Clinton Clean Energy Center in Clinton, Ill., starting in 2027. Last September, Constellation reached a 20-year deal with Microsoft that will reopen Three Mile Island, but Meta reportedly will be paying far less. Nuclear stocks initially spiked on the news, but many reversed lower, including Constellation Energy.
Thor Thunders, REV Group Revs
Thor Industries on Wednesday reported a 19% increase in earnings on 3% sales growth to beat FactSet views. North American towable RV sales increased 9.1% for the quarter, while unit shipments rose 5.5%. CEO Bob Martin sees some upcoming challenges, but Thor maintained its full-year outlook. THO stock jumped, but is in a long downtrend. REV Group on Wednesday gapped up to a new high with a 79% increase in earnings on 2% revenue growth. Specialty vehicle sales increased 3.8%, while RV sales declined 2.4%. The company also lifted its sales outlook by $500 million. Winnebago tumbled Thursday after giving preliminary quarterly results that were well below views, citing souring consumer sentiment.
Stock Market News In Brief
Circle Internet Group shot up 168% in Thursday's debut after the stablecoin issuer raised $1.1 billion in an IPO after selling an upsized 34 million shares at an above-range $31 per share.
Guidewire Software crushed fiscal Q3 earnings views, with EPS up 238% vs. a year earlier. Revenue grew 22% to $293.5 million, slightly beating. The insurance underwriting software maker also guided up. Shares gapped up to a new high.
HealthEquity topped Q1 consensus with EPS rising 21% as revenue grew 15% to $330.8 million. The health savings account giant guided up on full-year revenue, citing declining fraud costs and possible legislative changes to expand HSAs. Shares jumped.
Wells Fargo rose as the Federal Reserve lifted asset growth restrictions imposed back in 2018 in the wake of the bank's fake-accounts scandal.
Hims & Hers Health said it will buy ZAVA, a European telehealth platform, to expand its presence in the U.K. and officially launch its efforts in Germany, France and Ireland. Shares initially surged Tuesday, but reversed lower.
Argan easily beat EPS views. The heavy construction firm's revenue met views for a 23% gain to $193.7 million.
Credo Technology surged after the maker of high-speed connectivity systems for data centers delivered a beat-and-raise earnings report. Earnings spiked 400% year over year, as revenue soared 180% to $170 million in the fiscal fourth quarter. For the current quarter, Credo sees sales rising 218% to $190 million.
Signet Jewelers cleared estimates, with a surprise 6% EPS gain and sales rising 2% to $1.54 billion, just beating. The parent of Kay, Zales and Jared brands raised its full-year adjusted earnings forecast. Shares gapped up to around the 200-day line.
Samsara reported Q1 EPS spiked 266% with revenue up 31% to $366.9 million, both beating. Annual recurring revenue from subscriptions rose 31% to $1.54 billion, just topping. For the July quarter, Samsara guided slightly higher on Q2 revenue.
Ciena reported fiscal second-quarter earnings rose 55%, but missed views, while a 24% revenue rise to $1.13 billion slightly beat. Its fiber optics gear is built into telecom networks and hyperscale data centers. Shares tumbled.
DocuSign said Q1 adjusted profit climbed 10%, while revenue rose 8% to $763.7 million. The maker of electronic signature and contractual software raised full-year revenue targets, but cut billings targets. Shares dived.
ServiceTitan said Q1 EPS rose 229% with revenue rising 27% to $215.7 million, both beating. The cloud-based platform to connect a wide array of business operations launched an IPO in December. Shares tumbled.
