Wall Street lost steam due to higher bond yields and tariff concerns
Stocks came out of the holiday gate strong this week, bolstered by stabilizing consumer confidence and upbeat economic readings. However, momentum fizzled midweek as cautious Federal Reserve commentary and rising bond yields weighed on sentiment. Investors also contended with ongoing tariff volatility, which sparked sharp moves in both directions across sectors. As May wraps up, Wall Street appears on track for weekly and monthly gains, after a bump from better-than-expected inflation and spending data.
Winners and Losers in This Week’s Retail Earnings
Retail earnings were a mixed bag this week. Gap (GAP) stock plunged after the company issued a flat sales forecast and warned tariffs could weigh on margins, and Best Buy (BBY) also slipped on a slashed sales outlook. On the upside, e.l.f. Beauty (ELF) popped after the company shared an earnings beat and acquired Rhode, while Costco Wholesale (COST) attracted analyst praise after a quarterly win. Elsewhere, a few apparel retailers, including American Eagle (AEO), impressed with stronger-than-expected results, providing some hope for the sector heading into the summer.
Stocks to Watch in June
A few stocks are have potential going into the new month. Sprouts Farmers Market (SFM) is approaching two historically bullish trendlines that could support a short-term breakout. Tesla (TSLA) may be on the verge of a bigger rally if it can clear near-term resistance. On the other hand, Walgreens Boots Alliance (WBA) has consistently underperformed in June, historically speaking, suggesting more downside could be in store.
Looking Ahead: Jobs Data, Earnings Close Out May
The first week of June kicks off with a fresh batch of economic data, including jobs readings that could influence the Federal Reserve’s next move. A few earnings reports will be trickling in, too, with giants from the retail and cloud sectors set to offer insight into consumer and enterprise spending. Schaeffer's Senior Quantitative Analyst Rocky White examined what new all-time highs mean for short-term stock performance, and Senior V.P. of Research Todd Salamone outlined why not all hope is lost for the SPX.