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Stock Market Live May 13: Egg Prices Down, S&P 500 (VOO) Up
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Key Points
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Inflation rates slowed to 2.3% in April, with cheaper oil and lower egg prices helping.
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Renewable energy stocks are under pressure this morning after a series of earnings misses.
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All's Well That Ends Up
The Vanguard S&P 500 ETF closed today at 539.44, up 0.7%.
Trade Deals All Around
In continued Donald Trump news (is there really any other kind of news these days?), Bloomberg is reporting the U.S. is negotiating a deal to allow the United Arab Emirates to buy millions of artificial intelligence semiconductor chips from Nvidia (Nasdaq: NVDA) over the next two years. Some of these chips would be used by U.S. companies setting up data centers in the UAE, and the rest, to “Abu Dhabi AI firm G42.”
Nvidia stock is up nearly 6% on the news. The Voo is still up 0.8%.
Another Trade Deal in the Books?
President Trump is announcing a series of deals with the Kingdom of Saudi Arabia, which he says add up to $600 billion in “investments” in the United States. The deals apparently include $142 billion worth of weapons purchases from U.S. defense contractors, but specific details are still coming in.
This should be good news for defense contractors, but so far, their stock prices don’t seem to reflect it. Lockheed Martin (NYSE: LMT) stock, for example, is down 1.6%. The Voo, however, is now up 0.8%.
Moving On Up
After opening barely higher this morning, the Vanguard S&P 500 ETF is gaining steam as the morning moves along, up 0.5% at last report. Part of the reason is the relatively tame inflation report this morning. Another part is what that report might mean to investors.
If inflation is not going to be a problem this year, and an end to the tariffs war could help with that, then this removes one obstacle to convincing the Federal Reserve to cut interest rates. This, in turn, would be good news for the stock market. Today’s gains on the Voo seem to reflect this hope.
This article will be updated throughout the day, so check back often for more daily updates.
Good morning, investors!
Inflation news, or the lack of it, is in the headlines on Tuesday as the U.S. Bureau of Labor Statistics reports the inflation rate in April slowed to 2.3%, less than the 2.4% rate that analysts had predicted.
Core inflation, which excludes the cost of food and energy, was higher, 2.8%. Helping to explain the difference is the falling price of oil, which cost $70 and even $80 a barrel at times last year, but sells in the low $60s today. Also, the price of eggs was down 12.7% sequentially (albeit up 49.3% year over year).
This good news for the economy had modest effect on the Vanguard S&P 500 ETF (NYSEMKT: VOO) this morning, which opened essentially flat (up a few hundredths of a percent).
Earnings
Earnings reports are coming fast and furious, with roughly 100 companies having reported before the bell. Winners today include semiconductors company Silicon Labs (Nasdaq: SLAB) and Consolidated Water (Nasdaq: CWCO), both of which beat on earnings, and Under Armour (NYSE: UA), which beat on sales.
Losers include renewable energy companies Plug Power (Nasdaq: PLUG), Blink Charging (Nasdaq: BLNK), and TPI Composites (Nasdaq: TPIC), all with earnings misses.
Analyst Calls
A few upgrades are starting to roll in, in the wake of President Trump’s weekend Chinese tariffs pause. S&P 500 component Caterpillar (NYSE: CAT) won an upgrade to outperform from Baird this morning, which sees “lower-than-normal seasonal dealer inventory build, much better-than-expected orders/backlog, and stabilization in dealer retail sales.” Goldman Sachs upgraded another component company, Valero (NYSE: VLO), to buy, forecasting “EPS to grow from around $7.50 this year to over $12.50 in 2027 through a combination of share repurchases, limited refining capacity additions and improving crude differentials from the return of OPEC+ supply.”
Component Johnson & Johnson (NYSE: JNJ) got downgraded to market perform at Leerink Partners over concerns its Darzalex cancer drug will face price controls in the U.S. in 2029, rather than 2033 as anticipated. “The drug’s US profit contribution could take a meaningful hit,” warns Leerink.
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