What's the state of the market - June 1, 2025

02.06.25 05:19 PM - By Cullen

Calisade Weekly Market Commentary: An Upward Bias As We Await Hard Tariff Impact Data

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Markets continued their upward trajectory this past week, buoyed by a combination of optimistic sentiment and tangible economic data. While investor confidence remains a driving force, it's underpinned by credible indicators suggesting resilience in the U.S. economy.

Economic Data Highlights

Labor Market: The labor market remains robust. Despite a slight uptick, initial jobless claims rose to 240,000 for the week ending May 24, 2025, aligning with historical norms and indicating continued employment strength.

Consumer Confidence: Consumer confidence rebounded in May for the first time in five months, reflecting optimism amid a temporary U.S.–China trade truce.

GDP: The U.S. economy contracted by 0.2% in Q1 2025, primarily due to a surge in imports ahead of anticipated tariffs. This front-loading of activity suggests that the full impact of trade tensions may not materialize until later in the year.

Corporate Earnings Recap

Nvidia (NVDA): Reported Q1 revenue of $44.06 billion, surpassing expectations. Despite challenges from export restrictions to China, the company's strong performance underscores the ongoing demand for AI technologies.

Salesforce (CRM): Exceeded Q1 expectations with an adjusted EPS of $2.58 and revenue of $9.83 billion, raising its fiscal 2026 outlook on strong AI product demand.

Costco (COST): Missed Q1 EPS estimates, reporting $4.25 per share, a 12.43% increase year-over-year. The miss was attributed to rising input costs and cautious consumer spending.

Looking Ahead: Economic and Earnings Calendar

Economic Data Releases:

Monday, June 2: Construction Spending (April)

Tuesday, June 3: Factory Orders (April)

Wednesday, June 4: Beige Book Release

Thursday, June 5: Initial Jobless Claims

Friday, June 6: May Employment Report

Earnings Reports:

Tuesday, June 3: Broadcom (AVGO)

Wednesday, June 4: CrowdStrike (CRWD), Guidewire Software (GWRE)

Thursday, June 5: Dollar Tree (DLTR), Lululemon Athletica (LULU)

Friday, June 6: NIO Inc. (NIO), Hewlett Packard Enterprise (HPE)

Conclusion

While optimism continues to drive market gains, it's supported by solid economic data and corporate earnings. However, the effects of recent tariffs are expected to surface more prominently in the latter half of the year, potentially impacting consumer spending and corporate margins. Investors should remain vigilant, balancing the current positive momentum with an awareness of emerging economic headwinds.

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