Mixed Close with Focus on Semiconductor Sector
Market news 15 MAY
On Wednesday, U.S. benchmarks finished in mixed fashion: the S&P 500 rose 0.10%, the Dow Jones Industrial Average fell 0.21%, and the Nasdaq 100 gained 0.57%. E-mini S&P futures (ESM25) added 0.07%, while E-mini Nasdaq futures (NQM25) climbed 0.57%. The Nasdaq 100 hit a 2½-month high, driven by strength in semiconductor stocks.
Key Driver: Chipmakers and Export-Control Easing
Investors cheered news that the Trump administration plans to sign agreements granting Saudi Arabia and the UAE broader access to advanced AI chips. Beneficiaries include Nvidia, AMD and Amazon, which intend to invest in data centers and AI infrastructure in the Middle East. Earlier, the U.S. Commerce Department rescinded the Biden-era AI export rule, and the Trump team aims to shift toward bespoke semiconductor export deals with key countries.
On these reports, ARM Holdings jumped over 5%, AMD and Nvidia rose more than 4%, and KLA Corp and Qualcomm also added over 1%.
Bond Yields and Fed Commentary
Despite chip-sector gains, broader markets softened later in the session as 10-year U.S. Treasury yields surged to a one-month peak of roughly 4.53%. This was fueled by hawkish remarks from Fed Vice Chair Lael Brainard Jefferson, who lowered her 2025 GDP growth forecast yet cautioned that maintaining current tariff policy “is likely to interrupt progress in fighting inflation and cause at least a temporary uptick in prices.”
European sovereign yields also climbed—German bunds to about 2.70% and U.K. gilts to roughly 4.72%—adding pressure on global bond markets.
Housing Sector Backdrop: Mortgage Data and Builders
MBA mortgage application data for the week through May 9 showed an overall increase of 1.1% (purchase apps +2.3%, refinance apps –0.4%). The average 30-year fixed mortgage rate rose slightly to 6.86% from 6.84%.
Homebuilder stocks slumped, with PulteGroup down over 4%, and Lennar, D.R. Horton and Toll Brothers each off more than 3%, hit by rising yields and weaker housing affordability.
This Week’s Event Calendar
Thursday, May 15
April retail sales: expected flat; ex-autos +0.3% m/m
April PPI: +0.2% m/m, +2.5% y/y; core PPI +0.3% m/m, +3.1% y/y
Fed Chair Jerome Powell speaks at the Thomas Laubach research conference
Manufacturing output: forecast –0.3% m/m
Friday, May 16
April housing starts: +2.9% m/m to 1.363 million annualized
April building permits: –1.2% m/m to 1.450 million annualized
May preliminary University of Michigan consumer sentiment: +1.2 points to 53.4
As of midweek, markets assign only an 8% probability to a 25 bp rate cut at the Fed’s June 17–18 FOMC meeting.
Over 80% of S&P 500 companies have reported Q1 results, with 77% beating consensus— the strongest beat rate since Q2 2024. Earnings growth averaged +13.1%, well above the +6.6% expected before earnings season. However, full-year 2025 S&P 500 profit growth forecasts have been revised down to +9.4% from +12.5% as of January.
Notable Movers: Winners and Losers
Strong Performers
Super Micro Computer (+16%): signed a multi-year data-center deal with Saudi-based DataVolt
Exelixis (+20%): Q1 revenue $555.4 M vs. $495.6 M estimate; raised 2025 revenue guide to $2.25–2.35 B vs. prior $2.15–2.25 B
Dynatrace (+5%): Q4 revenue $445.2 M vs. $435.2 M estimate; raised 2026 revenue forecast to $1.95–1.97 B vs. $1.93 B consensus
International Paper (+4%): benefited as Georgia-Pacific announced closure of a containerboard mill in Georgia
Tesla (+4%): Reuters report that component shipments from China for Cybercab and Semi trucks start this month
Significant Decliners
Pharmaceuticals: Moderna, AbbVie, BMS, Merck, Lilly, Pfizer, Amgen, Gilead all down 3–5% on sector weakness
Homebuilders: PHM, LEN, DHI, TOL off more than 3% on higher rates
Longevity AI (LOAR) –10%: shareholders plan to sell 9 M shares in a one-day marketed offering
American Eagle Outfitters (AEO) –6%: withdrew FY 2025 outlook amid macro uncertainty
Target (TGT) –3%: Oppenheimer cut target from $150 to $130
Cboe Global Markets (CBOE) –2%: Morgan Stanley cut rating twice from “Overweight” to “Underweight”
Consolidated Edison (ED) –1%: KeyBanc cut rating to “Underperform” with $90 target