Stock Market Summary

The stock market experienced another day of declines, as major indices faced selling pressure. The S&P 500 decreased by 0.8% while the Nasdaq Composite saw a 0.9% dip, primarily attributed to consolidation activities. Contributing to the downturn were renewed concerns about tariffs and cautious corporate forecasts. Ford (F, Financial) and Mattel (MAT), despite surpassing Q1 earnings forecasts, refrained from providing comprehensive annual guidance. Ford cautioned about a potential $1.5 billion reduction in profits due to tariffs, whereas Mattel pointed out the unstable macroeconomic conditions and indicated plans for toy price hikes.

President Trump announced plans to introduce upcoming pharmaceutical tariffs, expected to be revealed in approximately two weeks. This announcement comes on the heels of a U.S. trade deficit in March that reached $140.5 billion, spurred by a surge in imports, notably including a $20.9 billion rise in pharmaceutical imports. Treasury Secretary Bessent mentioned during an oversight hearing on Capitol Hill that several trade agreements might be disclosed as soon as this week, and completion of up to 90% of these deals could occur by year-end. However, the market hardly reacted to these remarks.

Economic Data Insights

• The U.S. trade deficit expanded to a record-setting $140.5 billion in March, exceeding the anticipated $127.5 billion, and surpassing the revised February deficit of $123.2 billion. This increase was primarily due to March exports surpassing those of February by $0.5 billion, alongside a $17.8 billion rise in imports.
• Significant was the surge in consumer goods imports, which increased by $22.5 billion, with pharmaceutical preparations leading the charge with a $20.9 billion uplift.

Meanwhile, Treasuries benefited from gains, with the 10-year yield declining by four basis points to 4.31%, and the 2-year yield dropping five basis points to 3.79%.

Global Market Overview

• In Europe, the DAX and CAC dipped by 0.4%, while the FTSE remained unchanged.
• In Asia, the Hang Seng rose by 0.7% and the Shanghai gained 1.1%, although the Nikkei was closed for a holiday.

Commodities Market

• Crude Oil increased by 1.93, settling at 59.09.
• Natural Gas fell by 0.06 to 3.82.
• Gold surged by 101.10, reaching 3424.80.
• Silver climbed by 0.89 to 33.38.
• Copper advanced by 0.09, reaching 4.78.

In anticipation of Wednesday's market events, participants expect the following updates:

Today's News

Advanced Micro Devices (AMD, Financial) reported impressive first-quarter results, with a Non-GAAP EPS of $0.96, surpassing expectations by $0.03. The semiconductor company achieved a 36% year-over-year revenue increase to $7.44 billion, beating forecasts by $320 million. AMD's data center segment was a significant contributor, with revenue jumping 57% year-over-year. The company anticipates second-quarter revenue of approximately $7.4 billion, plus or minus $300 million. Shares of AMD rose 6% following the announcement.

Ford (F, Financial) shares initially rose despite a challenging report on U.S. trade policy and a decline in Ford Pro sales, traditionally a strong segment for the company. Ford reported a 5% drop in Q1 revenue and a 35% decrease in profitability, with Ford Pro revenue down 16%. The results, however, beat expectations, but the company withdrew its full-year guidance due to uncertainties surrounding U.S. import tariffs.

Super Micro Computer (SMCI, Financial) posted a Q3 Non-GAAP EPS of $0.31, beating estimates by $0.01, but its revenue of $4.6 billion missed by $450 million. The company revised its fiscal 2025 revenue guidance to a range of $21.8 billion to $22.6 billion, down from the previous range of $23.5 billion to $25.0 billion. Despite the revenue miss, the company remains optimistic about future growth opportunities.

Energy Transfer (ET, Financial) reported Q1 GAAP EPS of $0.36, in line with expectations, but its revenue of $21.02 billion fell short by $520 million. The company's adjusted EBITDA increased to $4.10 billion from $3.88 billion a year ago. Shares gained 1.52% as investors remained optimistic about the company's growth prospects.

Arista Networks (ANET, Financial) saw shares rise 3.4% after reporting first-quarter results exceeding expectations. The company earned an adjusted $0.65 per share, with revenue growing 27.4% year-over-year to $2 billion, driven by strong demand in AI-related spending. Arista expects second-quarter revenue to be approximately $2.1 billion, surpassing analyst estimates.

ThredUp (TDUP, Financial) experienced a significant share price increase of over 40% after delivering a strong first quarter that exceeded Wall Street expectations. The online clothing reseller highlighted its strategic advantage over competitors like SHEIN and Temu, emphasizing its resilience to trade tariffs and the potential benefits from changes in trade policy.

Lucid (LCID, Financial) reported a Q1 Non-GAAP EPS of -$0.20, which beat expectations by $0.03. However, its revenue of $235.05 million missed by $11.11 million. Despite the revenue miss, the company remains focused on potential growth opportunities and strategic partnerships.

Astera Labs (ALAB) shares rose 3.4% after announcing first-quarter results that surpassed expectations. The semiconductor company reported adjusted earnings of $0.33 per share, with revenue up 144% year-over-year to $159.4 million. The company expects continued growth with projected revenue between $170 million and $175 million in the next quarter.

Rivian (RIVN, Financial) posted a Q1 GAAP EPS of -$0.48, beating expectations by $0.44, with revenue of $1.24 billion surpassing estimates by $220 million. Despite the positive earnings surprise, shares dipped slightly by 1.04% as the company continues to face challenges in scaling production and expanding its market presence.

GuruFocus Stock Analysis

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