Breakfast News: Tariff Deal Euphoria Fades

Breakfast News: Tariff Deal Euphoria Fades

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1. S&P 500 Gains Stall on Tariff Worries

S&P 500 and Nasdaq futures started the day around 0.6% lower as the former ended a six-day winning streak yesterday, having climbed to within 3% of its all-time high. The S&P 500 had gained $9 trillion in market value in a little over a month on the back of trade deal hopes, but fears of tariff damage are returning.

• "Equity markets have reacted with unwarranted optimism": Gregory Daco, chief economist at EY, wrote Tuesday that investors were "overlooking the persistent economic drag posed by elevated tariffs."
• "We don't see broad based price increases for our customers": Home Depot (HD -1.69%) took a more optimistic stance yesterday over retail prices, though it's likely to drop some products sourced from China.

2. Ford and Nissan's New Battery Bet

The Wall Street Journal reports a new tie-up between Ford (F -2.15%) and Nissan. It will see Nissan producing electric vehicle (EV) batteries in Ford's battery plants in Kentucky, which were built as a joint venture with SK On, the Korean battery maker.

• $5 billion EV loss in 2024: Ford had bet big on EV demand but it hasn't happened. The company expects a further $5 billion loss on its EV business in 2025, and cited tariff uncertainty as the reason behind suspending its 2025 guidance early this month.
• Japan battery factory canceled: Making batteries in the U.S. should help Nissan reduce the impact of import tariffs on car parts, as the Japanese giant posted a $4.5 billion loss in its first quarter.

3. Earnings Beats From PANW, KEYS

Palo Alto (PANW -6.63%) looks set to open nearly 4% down, despite beating revenue and earnings expectations in its third quarter (with revenue growing 15% year over year), with Wall Street having loftier expectations. The company saw Next-Generation Security annual recurring revenue (ARR) beat $5 billion for the first time.

• Beating the S&P 500 by 420% since 2018 Rule Breakers recommendation: In Q4, Palo Alto expects the security ARR figure to exceed $5.5 billion, for year-over-year growth of at least 31%.
• "Revenue and earnings per share above the high end of guidance": Keysight Technologies (KEYS -0.20%) reported Q2 order growth ahead of expectations, and raised its full-year guidance even though CFO Neil Dougherty expects Q3 to see "the most significant tariff impact." The stock gained more than 4% in early pre-market trading today.

4. Key Results Today: WIX, LOW, URBN

Stock Advisor rec Wix.com (WIX -16.12%) posted a Q1 report this morning, which saw bookings in the quarter up 12% year over year. Revenue rose 13% to beat expectations. The SaaS website platform provider raised its share repurchase plan to $400 million.

• Up 101% in five years: Q1 results from Lowe's (LOW -1.70%) this morning showed a smaller-than-expected fall in comparable sales. The company reiterated its full-year outlook for total sales of $83.5 billion to $84.5 billion, with earnings per share of between $12.15 and $12.40.
• Record $1.64 billion sales in Q4 2024: Urban Outfitters (URBN -2.79%) will post Q1 2025 earnings after market close, with analysts expecting a year-over-year earnings per share rise of between 17% and 22%.

5. Your Turn

At the end of last week, we heard Novo Nordisk (NVO -0.01%) would be searching for a new CEO due to "recent market challenges" and "the development of the company's share price since mid-2024."

Which public company do you believe needs to follow suit with new leadership? Debate with friends and family, or become a member to hear what your fellow Fools are saying.