Markets
Yiwen Lu

Stocks finish October with loss in first monthly decline since April

The S&P 500 slid 1.9% on Thursday, its worst daily loss since early September. The tech-heavy Nasdaq 100 fell 2.4%. The Russell 2000 was down 1.6%. Major indexes all edged down this month, and the benchmark S&P 500 broke a five-month-long monthly winning streak.  

Stocks were sent lower by declines in megacaps amid busy earnings. All Magnificent 7 stocks slid. Microsoft was down 6% and Meta fell 4.1%; both delivered upbeat earnings, but Microsoft forecasted slower cloud-revenue growth, while Meta said that its capital expenditures would grow as it scales up AI investments. Amazon and Apple, which reported after the closing bell, slumped 3.4% and 2%, respectively, ahead of their releases. Nvidia, which won’t report until November, tanked 4.7%. 

Most other sectors retreated as well. However, the utilities sector ETF rose 1%, thanks to Entergy, which climbed 15.2% and hit an all-time high after earnings beat. 

In other individual stock moves, shares of Peloton climbed 27.8% on strong earnings and a new CEO. Roblox  jumped 19.9%, as results for both bookings and earnings per share beat expectations. Beauty conglomerate Estée Lauder lost a whopping 20.9%, its biggest one-day drop in history, after management slashed the dividend and withdrew their 2025 outlook. 

The 10-year Treasury yields had its biggest monthly gain in over two years to hit 4.28%. Gold retreated. Crude-oil futures settled higher on Thursday following reports that Iran may be planning an attack on Israel, finishing the month with gains.

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markets
Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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