The stock market experienced a positive day with all major indices closing higher. Gains ranged between 0.6% and 1.1%, driven by encouraging trade developments and President Trump's endorsement to invest in stocks.

The announcement of a trade agreement with the UK by the Trump administration has sparked hopes for similar agreements with other nations, potentially reducing the feared impact of tariffs on the global economy. Commerce Secretary Howard Lutnick confirmed that the 10% baseline tariff would remain, while the UK committed to purchasing $10 billion worth of Boeing (BA, Financial) aircraft.

President Trump, during a media interaction, mentioned that the US is on the brink of securing further deals with other countries. He hinted at the possibility of reducing tariffs on China if the upcoming weekend meeting is successful, and indicated a potential conversation with President Xi thereafter.

Later in the day, reports suggested that the US might reduce tariffs on China by 50% next week to set the stage for comprehensive trade discussions.

In the bond market, Treasuries faced selling pressure, causing the 10-year yield to rise by ten basis points to 4.37%, and the 2-year yield to increase by the same margin to 3.89%. This movement was influenced by a disappointing Q1 Productivity report, which showed a larger-than-expected decline in productivity and a significant rise in Unit Labor Costs.

The New York Federal Reserve's April Survey of Consumer Expectations revealed that the one-year inflation outlook remained steady at 3.6%, while the three-year outlook rose to 3.2% from 3.0%. Conversely, the five-year outlook declined to 2.7% from 2.9%. Additionally, the U.S. Treasury's sale of $25 billion in 30-year bonds attracted weak demand.

Year-to-date performance of major indices:

• Dow Jones Industrial Average: -2.8%
• S&P 500: -3.7%
• S&P Midcap 400: -5.5%
• Nasdaq Composite: -7.2%
• Russell 2000: -9.1%

Key economic data reviewed today included:

• Weekly Initial Claims: 228K (below consensus of 238K); prior revised to 241K
  • The decline in initial jobless claims suggests a robust labor market, far from recessionary conditions.
• Q1 Productivity Preliminary: -0.8% (worse than consensus of -0.4%); prior revised to 1.7%
  • The rise in unit labor costs, due to weak productivity, hasn't yet significantly pressured profit margins in Q1 earnings reports.
• March Wholesale Inventories: 0.4% (slightly below consensus of 0.5%); prior was 0.3%

No U.S. economic data is scheduled for release on Friday.

Today's News

Lyft (LYFT, Financial) has reported a 14% increase in net revenue, reaching $1.45 billion in the first quarter, driven by record gross bookings and an all-time high in driver hours. The company is also expanding its share repurchase program to $750 million, with $500 million to be deployed in the next twelve months, which represents 13% to 14% of its market cap. This strategic move is expected to enhance shareholder value and support the company's growth trajectory.

The Trade Desk (TTD, Financial) exceeded expectations with a Q1 Non-GAAP EPS of $0.33, beating estimates by $0.08, and revenue of $616 million, surpassing forecasts by $40.72 million. The company maintained a customer retention rate of over 95% for the eleventh consecutive year. Shares surged by 13% following the announcement, reflecting investor confidence in its continued performance.

Meta Platforms (META, Financial) has appointed Robert Fergus to lead its Facebook AI Research lab, FAIR. Fergus, who co-founded FAIR in 2014, returns to Meta after a stint at Google DeepMind. This leadership change comes as Meta aims to advance its AI capabilities, particularly in memory and personalization through the Llama models.

Coinbase (COIN, Financial) reported a Q1 Non-GAAP EPS of $1.94, which slightly missed estimates by $0.04, with revenue reaching $2.03 billion. Despite a 19% quarter-over-quarter decline in transaction revenue, the company outperformed the broader global spot market. Coinbase is also making strategic moves with its acquisition of crypto options giant Deribit for $2.9 billion.

British Airways' parent company, IAG, is reportedly finalizing an order for approximately 30 Boeing (BA, Financial) 787 Dreamliner jets. This potential deal, valued at around $10 billion, would be a significant win for Boeing amidst a new trade agreement between the U.S. and the UK, boosting its competitive position against Airbus.

Meta Platforms (META, Financial) is in preliminary discussions with crypto companies to introduce stablecoins for managing payouts. This initiative aims to leverage stablecoins' ability to facilitate cross-border payments with lower fees compared to traditional methods. Meta's exploration into stablecoins is part of its broader strategy to integrate fintech and payments into its platforms.

CloudFlare (NET, Financial) reported Q1 revenue of $479.09 million, a 26.5% year-over-year increase, beating expectations by $9.39 million. However, shares fell by 3.87% as the company projects a cautious outlook for the second quarter, with expected revenue of $500 million to $501 million and non-GAAP income from operations between $62.5 million and $63.5 million.

Nvidia (NVDA, Financial) expressed support for the revocation of the AI Diffusion Rule by the Trump administration, viewing it as an opportunity for the U.S. to lead the next industrial revolution. This policy change is anticipated to create high-paying jobs and boost U.S. infrastructure, though analysts caution that uncertainty remains regarding its full implementation.

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