May 23rd Market Overview

Happy Friday.

Well, that escalated quickly. Trump's morning social media posts targeting the EU and Apple's iPhone manufacturing sent markets lower. Six weeks of trade calm just got interrupted, but hey - at least Intuit crushed earnings and nuclear stocks caught a bid on policy news.

Memorial Day weekend starts with some fresh uncertainty to digest.

Let's dig in...

Executive Summary

1. Trade tensions returned as Trump threatened 50% EU tariffs starting June 1st and 25% levies on foreign-made Apple iPhones, later expanding to Samsung and other smartphone makers

2. Market recovery from lows occurred after the White House suggested Trump’s comments weren’t formal policy, though he later stated he’s “not looking for a deal” with the EU

3. Nuclear sector rallied on reports Trump will sign executive orders boosting the industry, while Intuit posted blowout earnings with significant guidance raises across all metrics

4. VIX jumped above 25 as the market recalibrated risk after six weeks of relative calm that had produced one of the market’s strongest rallies in decades
   

Market Overview

Key Market Drivers

1. EU Tariff Ultimatum: Trump recommended a “straight 50% tariff on the European Union, starting June 1, 2025,” citing the bloc’s $250 billion annual trade surplus with the U.S. He called the EU “very difficult to deal with” and listed their “powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties” as justification.

2. Apple Manufacturing Demand: Trump threatened “at least 25%” tariffs on Apple $AAPL ( ▼ 0.3% ) iPhones not manufactured in the U.S., later expanding this to Samsung and other smartphone producers with implementation likely in late June. Wedbush analyst Dan Ives called domestic iPhone production “a fairy tale that is not feasible.”

3. Market Psychology Shift: The renewed rhetoric reversed weeks of de-escalation that supported strong rallies. LPL’s Jeff Buchbinder warned stocks are “susceptible to sell-offs” after “one of the biggest four-week rallies in decades.”

4. Policy Uncertainty: While the White House initially suggested Trump’s comments weren’t formal policy, he later confirmed he’s “set” to impose EU duties and “not looking for a deal,” creating genuine uncertainty about implementation.

Stock Spotlight

Apple $AAPL ( ▼ 0.3% ) fell after Trump’s iPhone tariff ultimatum pushed its market cap below $3 trillion for the first time since May 9th. The stock faces its eighth consecutive negative session, the longest streak since January 2020.

Intuit $INTU ( ▲ 0.07% ) delivered exceptional results with revenue jumping to $7.88 billion, beating estimates by $320 million.

U.S. Steel $X ( ▼ 0.02% ) gained after Trump announced a $14 billion partnership with Nippon Steel, allowing the Japanese firm to invest while keeping U.S. Steel domestically owned.

Oklo $OKLO ( ▼ 2.91% ) and NuScale Power $SMR ( ▼ 1.38% ) rallied on reports Trump will sign executive orders expediting reactor construction and securing key materials.

Booz Allen Hamilton $BAH ( ▼ 0.27% ) fell after announcing plans to cut 2,500 jobs due to slowdown in government spending under the Trump administration.

Big Name Updates

Tesla $TSLA ( ▲ 1.39% ) received a price target boost from Wedbush’s Dan Ives, who raised his target from $350 to $500. Ives believes “the golden age of autonomous is now on the doorstep for Tesla” with the Austin launch next month.

Apple $AAPL ( ▼ 0.3% ) plans to expand its India supply chain with a $1.5 billion Foxconn plant for display modules near Chennai.

Amazon $AMZN ( ▲ 0.2% ) saw Anthropic release Claude 4 Opus and Claude 4 Sonnet models, with Opus capable of coding solo for up to 7 hours.

Microsoft $MSFT ( ▼ 0.59% ) and Nvidia $NVDA ( ▲ 0.87% ) remain in the exclusive above $3 trillion market cap club after Apple’s decline.

Other Notable Company News

Ross Stores $ROST ( ▼ 0.6% ) withdrew full-year guidance and provided weak second-quarter earnings guidance, warning of profitability pressure if tariffs remain at elevated levels.

Palantir $PLTR ( ▼ 1.77% ) faced insider selling as executives Karl and Cohen sold $50 million and $43 million in shares respectively.

Hims & Hers $HIMS ( ▼ 2.0% ) launched new obesity treatment access, providing eligible customers prescription Wegovy for $549/month over 6 months.

New 52-Week Highs: Philip Morris $PM, GE Vernova $GEV, and Intuit $INTU

New 52-Week Lows: CarMax $KMX, Campbell Soup $CPB, Kraft Heinz $KHC, and Revvity $RVTY

Sector Watch

Bond Market

Treasury yields declined as investors sought safe haven assets amid renewed trade tensions. The benchmark 10-year yield fell to 4.518% while the 30-year dropped to 5.036%.

• The move reversed recent yield increases driven by fiscal concerns surrounding Trump’s tax-and-spending bill
• Japanese bond yields pulled back, providing relief after recent pressure
• Next week’s 40-year Japanese auction could bring yields back into focus
• The dollar weakened broadly, with GBPUSD reaching its highest level since 2021

Policy Watch

Trump’s trade threats represent the first major escalation since the 90-day tariff pause implemented in early May. Treasury Secretary Scott Bessent expressed optimism about “several large deals” coming in weeks ahead but acknowledged the EU’s “collective action problem.”

• Nuclear Policy: Trump expected to sign executive orders boosting the industry, potentially invoking the Defense Production Act over uranium dependence

• Supreme Court: Ruling suggested Fed board members maintain special protection from presidential termination

• China Relations: Beijing indicated U.S. dialogue will continue as trade talks advance

• Fiscal Policy: Trump’s tax-and-spending bill now headed to the Senate

What to Watch

1. EU-U.S. Trade Negotiations: Monitor developments from ongoing calls between U.S. Trade Representative Jamieson Greer and EU officials. The EU represents America’s largest trading partner, making any resolution critical for market stability.

2. Nuclear Sector Momentum: Trump’s expected executive orders could catalyze the entire sector. Key companies include Constellation Energy $CEG, Cameco $CCJ, NuScale $SMR, and Oklo $OKLO.

3. Apple Supply Chain Response: Watch for strategic announcements regarding accelerated domestic manufacturing or supply chain shifts. The company’s $1.5 billion India investment demonstrates ongoing diversification from China.

4. Bond Market Dynamics: The 30-year Treasury testing 5% creates critical resistance. Japan’s 40-year auction next week could pressure global markets if demand disappoints.

5. Memorial Day Impact: Markets closed Monday. Trading volumes expected to be lighter today ahead of the long weekend.

Thanks for reading 🙂

- John

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