Markets
Nia Warfield, Luke Kawa

US stocks go up as news of trade deals mean tariff risks go down

A trade deal with Japan and reports that a similar agreement with the EU was near the finish line propelled the S&P 500 to fresh all-time and closing highs on Wednesday.

The benchmark US stock index closed up 0.8%, the Nasdaq 100 rose 0.4%, and the Russell 2000 advanced 1.5%.

Every S&P 500 sector ETF gained outside of utilities, with healthcare, industrials, and energy leading the way higher.

The day’s gains were led by Lamb Weston, with shares jumping 16% after the frozen potato producer topped Q4 expectations and doubled down on its cost-cutting plan. Fiserv was among the worst performers, falling nearly 14% after the payment tech company topped Q2 estimates but narrowed its full-year earnings forecast.

Shares of Toyota, Honda, and Mazda all soared following Japan’s fresh trade deal with the US, which slashes levies on Japanese auto imports to 15% from 27.5%.

GE Vernova jumped nearly 15% after the energy equipment giant posted better-than-expected Q2 results. Other AI-linked power providers posted solid gains, as rising electricity prices are poised to be passed on to consumers.

The meme stock targets shifted, and the impulse was a lot weaker than previous editions: the likes of Krispy Kreme and GoPro were up huge in early trading, but pared much of those gains throughout the day.

Similarly, but with much better results, Hims & Hers was up 16% on ostensibly no news pertaining to the company and amid a spike in bullish options activity.

Abivax closed up more than 500% after it announced that late-stage trials for its treatment for ulcerative colitis showed promise.

Hasbro shares jumped as much as 5% before closing in the red after the toymaker topped Q2 estimates and raised its full-year guidance.

Roblox shares dipped after Raymond James issued a rare downgrade on the stock, tapping the brakes following a massive rally in recent months.

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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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