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CLOSING BELL
Musk Peaces Out (Sortof)

tenor

The market pulled back just a smidge to end the short, final trading week of May. The post-tariff pause price action set the S&P 500 for its best May gain for 30+ years, at +6.15%.

Trump and Elon Musk held a goodbye PR event in the White House. Trump said he’s ‘not really leaving,’ and despite Musk’s recent criticism of the GOP tax-and-spending bill, he received a ceremonial key to the White House. Guess that’s what hundreds of millions in political donations ultimately gets you. 👀

Today’s issue covers Lung Disease Researchers Are Not Breathing Easy, Inflation Nearly Beaten, But Tariff Talks Kept The Market Interesting, and more. 📰

With the final numbers for indexes and the ETFs that track them, 7 of 11 sectors closed green, with utilities $XLU ( ▲ 1.02% ) leading and energy $XLE ( ▼ 0.89% ) lagging.

finviz

S&P 500 $SPY ( ▼ 0.11% ) 5,912

Nasdaq 100 $QQQ ( ▼ 0.16% ) 21,341

Russell 2000 $IWM ( ▼ 0.51% ) 2,102

Dow Jones $DIA ( ▲ 0.09% ) 42,270

COMPANY NEWS
Lung Disease Researchers Are Not Breathing Easy 🫁 

Two separate biopharma firms researching lung diseases keeled over after their treatment test results did not meet endpoint goals.

$SMMT ( ▼ 30.5% ) Therapeutics shares tumbled after its late-stage trial for ivonescimab met the progression-free survival (PFS) primary endpoint but failed to achieve a statistically significant benefit in overall survival.

The drug, tested in combination with chemotherapy for non-small cell lung cancer, showed a positive trend in overall survival but did not meet FDA standards for approval. Summit plans to file a Biologics License Application but has not specified a timeline, as regulators require stronger survival data.

Retail sentiment on SMMT shifted from “bearish” to “extremely bullish.”

$REGN ( ▼ 19.01% ) shares fell nearly 20% after late-stage trials of itepekimab, an experimental treatment for chronic obstructive pulmonary disease (COPD), only partially met end goals. The disease is commonly known as “smoker’s lung.” The AERIFY-1 trial showed a statistically significant 27% reduction in moderate or severe exacerbations at 52 weeks, but the AERIFY-2 trial failed to meet the same endpoint.

Analysts suggest Regeneron and Sanofi may need additional studies before seeking regulatory approval. The good news: trials were conducted during the COVID-19 pandemic, which may have influenced outcomes.

Stocktwits REGN sentiment also hit ‘extremely bullish’ on the news.

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…EXCEPT DEATH AND TAXES
Inflation Nearly Beaten, But Tariff Talks Kept The Market Interesting 🐻 

Inflation PCE data released Friday was literally a hair’s breadth from the Fed’s ‘inflation under control’ goal. It was the smallest annual advance in core price increases in four years. The core index rose 2.5% year-over-year, matching expectations.

The headline PCE price index increased 2.1%, slightly below forecasts of 2.2%. Month-over-month, both core and total PCE rose 0.1%. Analysts are still watching for tariff impacts, but if that was not a factor, there would be little reason to keep rates higher for much longer. 🙁 

Speaking of trade, Americans imported way less in April, sending the deficit between imports and exports more than 45% lower. The Census Bureau estimated the U.S. imported $276B in April, nearly $70B less than the month before, and exported $188B in goods.

U.S. and China Are Having Relationship Issues

Trump accused China of violating a preliminary trade agreement Friday, stirring up the trade conversation. Trump claimed Beijing failed to uphold commitments made earlier this month. The dispute follows a temporary truce that suspended retaliatory tariffs for 90 days, but U.S. officials now suggest China has not complied with key terms. Friday night, Trump announced 50% tariffs on foreign steel at a rally.

The tweet came after Treasury Secretary Scott Bessent acknowledged that negotiations have hit roadblocks in a Fox News interview. Bessent had said that the talks with China are a “bit stalled.” The only thing that might prod them along is a face-to-face meeting between the two superpowers (aside from social media jabs of course.)

“I believe we will have more talks with them in the next few weeks, and we may, at some point, have a call between the President and Party Chair Xi.” Bessent said. 

China pushed back against President Trump’s claim Friday, its embassy accusing the U.S. of abusing semiconductor export controls.

The Chinese Commerce Ministry called the U.S. actions “typical unilateral bullying behavior.” Why can’t the two superpowers get along?

During the firm’s earnings call, Nvidia CEO Jensen Huang said that AI chip exports won’t even stop China’s technological progress. Of course, the bans will cost him $8B, so it’s no wonder he is critical.

POPS & DROPS
Noteworthy Stories From Stocktwits News 🗞️ 

Palantir hit records after a report the firm is in discussions with the IRS and Social Security Administration for even more data projects. The company has secured over $113 million in federal contracts since Trump took office, including new agreements with the Department of Homeland Security and the Pentagon.

$ULTA ( ▲ 11.78% ) flew after the firm delivered strong Q1 results and raised its full-year forecast, signaling resilience in the beauty sector despite broader economic concerns. CEO Kecia Steelman emphasized that consumers prioritize skincare and beauty routines over other discretionary spending cuts. The company now expects annual revenue between $11.5 billion and $11.7 billion, up from its previous range.

Gap shares fell 20% after the retailer warned that tariffs could impact its operating income by $100 million to $150 million this year. Despite beating Q1 earnings expectations with EPS of $0.51 on $3.46 billion in revenue, the company’s flat Q2 sales forecast and tariff concerns weighed on investor sentiment. Analysts trimmed price targets, citing potential margin pressure.

$MRVL ( ▼ 5.56% ) fell after the firm reported record Q1 revenue of $1.895 billion, up 63% year-over-year, driven by strong AI demand in the data center market. Adjusted EPS came in at $0.62, slightly beating expectations. CEO Matt Murphy highlighted the company’s custom silicon business as a key growth driver, with further expansion expected in Q2.

Rigetti shares fell over 7% after it said it would sell up to $350 million of stock. Following the announcement, retail sentiment on Stocktwits turned bearish on the Quantum stock, with investors questioning whether the dip is worth buying.

$ZS ( ▲ 9.79% ) shares jumped after reporting strong Q3 earnings. Revenue rose 23% year-over-year to $678 million, beating analyst estimates of $667.1 million. Adjusted EPS came in at $0.84, surpassing expectations of $0.76. Wall Street responded positively, with Stifel raising its price target to $295, JP Morgan lifting it to $292, and Morgan Stanley increasing it to $280.

Canopy Growth reported Q4 revenue of CA$65 million, down 11% year-over-year, and shares burned to the ground. International cannabis sales declined 35%. The company posted a net loss of CA$221.5 million, or $1.43 per share, far worse than analyst expectations.

PRESENTED BY STOCKTWITS
🟢 Introducing the Stocktwits Sentiment Index

 Wall Street watches the $VIX for expected volatility.

Stocktwits traders have the Stocktwits Sentiment Index, which measures retail investor emotion and updates daily after close.

Today’s Takeaway:

📈 Retail caution is rising, as the latest Stocktwits Sentiment Index reading signals heightened fear.

Remember:

• The $VIX is based on the options market’s near-term volatility expectations.

• The Stocktwits Sentiment Index is based on what retail traders are feeling and signaling right now.

• Combining both gives traders a smarter, earlier read on market shifts.

P.S. The Stocktwits Sentiment Index is currently only available on Desktop, on the Stocktwits homepage.

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🤠 Trump lauds Elon Musk and DOGE at White House farewell

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