On Wednesday, Top 10 Things to Watch in U.S. Stock Market: Trade Talks, Federal Reserve Decisions, and Corporate Earnings

Taiwan • Business • 05/07 13:30
On Wednesday, Top 10 Things to Watch in U.S. Stock Market: Trade Talks, Federal Reserve Decisions, and Corporate Earnings

On May 7, 2025, the U.S. stock market edged up slightly due to factors such as U.S.-China trade negotiations, the Federal Reserve's interest rate decision, and corporate earnings reports. Disney's earnings exceeded expectations, causing its stock price to surge nearly 8%; AMD's strong data center business led to a rise in its stock price; Uber's revenue missed expectations, resulting in a 4% drop in its stock price. The Federal Reserve kept interest rates unchanged, and the market focused on Chairman Powell's remarks. Senior U.S. and Chinese officials will meet over the weekend to restart trade negotiations. Retail sales data showed a rebound in consumer spending, while a decline in the PPI indicated easing inflationary pressures.

Key Updates

05/08 02:00

Goldman Sachs Report: U.S.-China Trade Tensions Expected to Escalate in 2025, U.S. Stocks Likely to Face Pressure, Non-U.S. Markets Expected to Perform Steadily

In 2025, global stock markets are turbulent due to geopolitical and policy uncertainties. A Goldman Sachs report indicates that US-China trade tensions and Trump's policies are putting pressure on US stocks, with the market worried about a recession. Federal Reserve Chair Powell is not in a hurry to cut interest rates, and the strong dollar is impacting capital flows. Stock markets outside the US are performing steadily due to favorable valuations and policy support, becoming a key focus for investors.

05/08 01:01

The Dow Jones Industrial Average climbed over 280 points, with chip stocks leading the gains as easing US-China trade tensions boosted market confidence.

On May 7, 2025, U.S. stock markets closed higher, with the Dow Jones Industrial Average rising 284.97 points to 41,113.97, a gain of 0.70%. Despite Alphabet's stock price dropping and hawkish signals from Federal Reserve Chairman Powell, the strong performance of chip stocks and the easing of U.S.-China trade tensions boosted the market. The Philadelphia Semiconductor Index increased by 1.74%. The Dow's trading volume was 534 million shares, indicating strong momentum of capital inflow.

05/07 23:29

European stocks fell due to Federal Reserve policy decisions and corporate earnings reports, while shares of Novo Nordisk and BMW rose, and US-China trade relations eased.

On May 7, 2025, European stock markets experienced a broad decline, with the pan-European Stoxx 600 index dropping by 0.54%. Investors were focused on the Federal Reserve's decision to maintain interest rates and on corporate earnings reports. Novo Nordisk from Denmark and BMW from Germany reported earnings that exceeded expectations, leading to their stock prices rising by 1.3% and 1.6%, respectively. U.S.-China trade relations have eased, as senior officials from both countries are scheduled to meet in Switzerland. The Bank of England is expected to lower interest rates by a quarter point on May 8 to address market volatility.

05/07 22:00

The Federal Reserve keeps rates unchanged, US stocks finish higher: Chip stocks see a rebound, Nvidia gains 3%, Alphabet falls 7%, Disney jumps 10%

On May 7, 2025, the Federal Reserve kept interest rates unchanged, with Chairman Powell releasing a hawkish signal, but major U.S. stock indices closed higher. Chip stocks rebounded due to the Trump administration's potential easing of AI chip export restrictions, with Nvidia's stock rising 3.10%. Alphabet's stock plummeted 7.26% due to Apple's potential introduction of AI search features. Disney's stock soared over 10% due to strong earnings and expansion plans in the Middle East.

05/07 17:31

Warren Buffett Minimizes Concerns About Market Volatility at Berkshire Hathaway Shareholders Meeting: Drawing on 18,000 Trading Days of Investment Experience

In early May 2025, at the Berkshire Hathaway annual shareholders meeting, Chairman Warren Buffett stated that recent market fluctuations are "really no big deal," emphasizing the importance of his long-term investment philosophy and rational approach. Buffett noted that in his investment career spanning over sixty years, he has experienced approximately 18,000 trading days, and the current market fluctuations are trivial compared to past crises. He reiterated that investors should remain calm and pointed out that Berkshire has $348 billion in cash ready for future opportunities.

05/07 13:30

On Wednesday, Top 10 Things to Watch in U.S. Stock Market: Trade Talks, Federal Reserve Decisions, and Corporate Earnings

On May 7, 2025, the U.S. stock market edged up slightly due to factors such as U.S.-China trade negotiations, the Federal Reserve's interest rate decision, and corporate earnings reports. Disney's earnings exceeded expectations, causing its stock price to surge nearly 8%; AMD's strong data center business led to a rise in its stock price; Uber's revenue missed expectations, resulting in a 4% drop in its stock price. The Federal Reserve kept interest rates unchanged, and the market focused on Chairman Powell's remarks. Senior U.S. and Chinese officials will meet over the weekend to restart trade negotiations. Retail sales data showed a rebound in consumer spending, while a decline in the PPI indicated easing inflationary pressures.

05/07 12:32

Warren Buffett Reiterates His Value Investing Strategy at 2025 Shareholders Meeting: Market Sentiment Influences Short-term Stock Prices

In May 2025, Warren Buffett reaffirmed his commitment to value investing during the shareholders' meeting, emphasizing that short-term market movements are driven by emotions, while in the long run, they align with the business's intrinsic value. He referenced Benjamin Graham's "Mr. Market" analogy, noting that low market sentiment presents a prime opportunity for value investing. Buffett mentioned that holding cash enables swift action when price and value are misaligned, and urged investors to concentrate on the business's long-term value instead of short-term price swings.

05/07 07:04

Amid uncertainty surrounding Trump's tariffs, stock buyback plans by U.S. companies have reached a record-breaking $518 billion.

Due to the uncertainty caused by the Trump administration's tariff policies, American companies are accelerating stock buybacks. Reports from Deutsche Bank and S&P Global show that the total amount of stock buybacks announced by S&P 500 companies in the past three months reached $518 billion, setting a new record. Last week, companies announced buyback plans amounting to $192 billion. This is the highest for a single week since 1995. The wave of corporate buybacks reflects hesitation regarding future capital expenditure plans and a preference for using cash to stabilize stock prices and enhance earnings per share.

05/07 05:02

Wall Street's investor Paul Tudor Jones has warned: Even if Trump reduces tariffs, U.S. stocks could still reach new lows, and the Fed's decision not to cut interest rates increases market pressure.

Wall Street investor Paul Tudor Jones warned during a CNBC interview on May 6 that even if U.S. President Trump reduces tariffs on Chinese goods to 50%, the U.S. stock market could still reach new lows. Jones pointed out that the combination of Trump's high tariff policy and the Federal Reserve's reluctance to cut interest rates creates dual pressure that is unfavorable to the market. This statement has attracted market attention, especially as the Federal Reserve is about to announce its interest rate decision, as investors closely watch policy directions and trade developments.

05/07 03:06

U.S. stock futures rebound: Dow Jones Index rises 264 points to 34,182 points, as the market stabilizes ahead of the Federal Reserve's interest rate decision.

In the early trading session on May 7, 2025 (Taipei Time), U.S. stock index futures rose. Dow Jones Industrial Average futures rose 264 points to 41,182, S&P 500 futures rose 41 points to 5,666.75, and Nasdaq 100 futures climbed 167 points to 20,043.5. This rebound happened ahead of the Federal Reserve's interest rate decision announcement, as the market expects rates to remain unchanged, indicating signs of short-term stabilization in investor sentiment.

1. Fed Maintains Rates, Focus of the Market on Powell's Remarks

The Federal Reserve kept the federal funds rate unchanged at the 4.25% to 4.5% range on Wednesday, as expected. According to the CME FedWatch Tool, market expectations for this decision were as high as 96%. Although the rate remained unchanged, Chairman Powell's remarks at the post-meeting press conference became the focus of the market. He noted that the Fed is closely monitoring the potential economic impact of the recent tariffs imposed by the Trump administration and emphasized that future policy will depend on data performance. According to Investopedia, the current monetary policy uncertainty index has reached its highest level since 1985.

2. US-China High-Level Meeting to Resume Trade Talks This Weekend

US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are expected to meet with Chinese officials in Switzerland this weekend, marking the first high-level trade talks since Trump raised tariffs on Chinese imports to 25% in April. Although the market does not have high expectations for a comprehensive agreement, this development has boosted investor confidence, pushing major stock indices slightly higher.

3. Disney's Earnings Exceed Expectations, Stock Soars Nearly 8%

Walt Disney Co reported second-quarter fiscal year 2025 earnings, with revenue reaching $23.62 billion, surpassing the market expectation of $23.14 billion; adjusted earnings per share were $1.45, far exceeding the expected $1.20. The company also raised its full-year earnings per share forecast to $5.75, indicating a 16% annual growth rate. Additionally, Disney+ subscriptions unexpectedly increased, and the company announced plans to build a new theme park and resort in Abu Dhabi, planning to profit from licensing fees.

4. AMD's Data Center Business Strong, Optimistic Outlook

Advanced Micro Devices (AMD) reported better-than-expected first-quarter earnings and provided strong second-quarter revenue guidance. Despite facing $700 million in challenges in the Chinese market, the data center segment (including CPUs and GPUs) saw a 57% year-over-year revenue increase, exceeding market expectations. Bank of America subsequently upgraded AMD's rating to "buy," with the stock rising over 1% in pre-market trading.

5. Uber Revenue Misses Expectations, Stock Falls 4%

Uber Technologies reported first-quarter revenue that fell short of expectations, but earnings per share were $0.83, far above the market estimate of $0.50. Total bookings grew 14% year-over-year, slightly below expectations. Even with a stable second-quarter outlook, the market remains cautious about its growth momentum, leading to a decline in stock price.

6. Marvell Delays Investor Day, Stock Plummets Nearly 8%

Chipmaker Marvell Technology postponed its scheduled June investor day due to "volatility in the macroeconomic environment" and instead will hold a webinar focused on custom chips. Although the company reaffirmed its midpoint revenue forecast, it adjusted the forecast range. Cantor Fitzgerald downgraded Marvell's rating to "neutral," primarily due to market concerns that Microsoft may shift its AI chips to Broadcom.

7. Honeywell Upgraded, Rises Over 2% Pre-Market

Industrial giant Honeywell was upgraded by Bank of America to "buy," with a target price set at $250. Analysts noted that Honeywell's more conservative financial forecasting strategy this year is likely to help it exceed expectations in the future. The stock rose over 2% in pre-market trading.

8. Sarepta and Super Micro Lower Forecasts, Stocks Plummet

Sarepta Therapeutics' stock plummeted over 20% pre-market after lowering its full-year product revenue forecast. Similarly, AI server manufacturer Super Micro Computer also lowered its full-year revenue guidance, leading to a stock drop of over 4%. These companies were among the weakest performers in the market that day.

9. Key Economic Data Released: Retail Sales and Producer Price Index

US retail sales in April increased by 1.4% month-over-month, significantly higher than the previous value of -0.8%, indicating a rebound in consumer spending. Meanwhile, the Producer Price Index (PPI) decreased by 0.4% month-over-month, showing a slight easing of inflationary pressures. Core PPI also declined by 0.1%. These data provide important insights for the Fed's future policy decisions.

10. Ongoing Activity in Healthcare Mergers and Capital Markets

Mergers and acquisitions in the healthcare industry continue. UMass Memorial Health completed its acquisition of Milford Regional Medical Center in October 2024 and finalized the transaction through $342 million in bond financing in January 2025. Additionally, Catheter Precision announced the acquisition of Cardionomic's heart failure assets, further expanding its product line. These transactions demonstrate that healthcare institutions are actively expanding their businesses through mergers and capital market operations despite uncertainties in policy.

References

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