In an historic move, Moody's downgraded the U.S. credit rating
Stocks struggled to find traction this week, as rising bond yields, a Moody’s U.S. credit downgrade, and profit-taking kept investors on edge. Early gains gave way to choppy price action as Wall Street reacted to renewed macroeconomic pressures. A sharp rise in the 10-year Treasury yield sparked broad selling midweek, with traders increasingly cautious about interest rate policy and the potential for prolonged inflation headwinds.
Profit-taking also hit recent high-flying sectors, particularly tech, while broader sentiment was dampened by uncertainty around U.S. credit stability. Even strong earnings and sector-specific breakouts couldn’t fully offset the drag from rate-driven volatility. Stocks are on track to close the week lower, as Friday’s session turned cautious following fresh tariff commentary from President Donald Trump.
Retail Caution Meets Cloud Confidence in Latest Earnings
Home Depot (HD) stock popped after reaffirming its full-year forecast, giving investors some relief amid ongoing concerns about consumer spending. Snowflake (SNOW) also impressed, hitting 52-week highs on an upbeat revenue outlook, reinforcing optimism around cloud demand.
On the downside, Palo Alto Networks (PANW) slipped after its fiscal third-quarter results, as investors digested slowing billings growth and cautious guidance. Target (TGT) and TJX Companies (TJX) moved lower as tariff fears and consumer spending concerns weighed on the broader retail outlook. Deckers Outdoor (DECK) was one of the companies to pull its full-year guidance, sending the stock plummeting.
Policy Moves Put These Stocks in Focus
Solar stocks SolarEdge Technologies (SEDG) and Enphase Energy (ENPH) slid as a new tax bill cleared the House, raising concerns about renewable energy incentives as it moves to the Senate. In contrast, crypto names like Marathon Digital (MARA), Riot Platforms (RIOT), and Coinbase (COIN) surged alongside a breakout in Bitcoin, with regulatory developments and capital inflows adding fuel.
Elsewhere, defense stocks including Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX Corp (RTX) caught attention after Trump’s "golden dome" defense proposal, while energy names like ExxonMobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY) gained traction on renewed geopolitical tensions and oil market speculation.
Crunch Time: Fed Minutes and PCE to Close Out May
The final week of May could bring heightened volatility as investors digest Federal Reserve meeting minutes and the closely watched personal consumption expenditures (PCE) price index -- a key inflation gauge. Both events may offer fresh insight into the Fed’s next move on interest rates. Plus, a deluge of earnings reports are on deck.
Meanwhile, Schaeffer’s Senior Quantitative Analyst Rocky White identifies the best- and worst-performing stocks during Memorial Day week, and Senior V.P. of Research Todd Salamone breaks down three key resistance levels that are currently steering the S&P 500’s advance.