Wall Street closed the week on a strong note, with the S&P 500 (SPY) gaining 2.93%, the Nasdaq 100 (QQQ) surging 3.44%, and the Dow Jones Industrial Average (DIA) rising 3%. The rally was fueled in part by April’s nonfarm payrolls report, which showed 177,000 jobs added, surpassing expectations, though downward revisions to previous months slightly dampened sentiment.

Markets also found support from signs of easing tensions in U.S.-China relations, as China signaled openness to trade discussions following a U.S. proposal. However, no concrete agreements or tariff rollbacks have been announced.

Looking ahead, market participants are focused on the Federal Reserve’s May 6–7 meeting, where rates are widely expected to remain unchanged. Although inflation has moderated, March’s core Personal Consumption Expenditures (PCE) price index remained flat month-over-month and softened to 2.6% year-over-year. This rate remains above the Fed’s 2% target, reducing the likelihood of immediate rate cuts.

While the major indexes showed strong momentum last week, analysts caution that volatility could return amid geopolitical uncertainties and any unexpectedly hawkish Fed signals.

📅 Monday, May 5th

• ISM Services PMI: The ISM Services PMI report is forecasted at 50.2, indicating expectations of continued but slower expansion in the services sector compared to March’s reading of 50.8, which was already the lowest since June 2024.
  
  Market participants should closely monitor the key subcomponents, including Business Activity (previously 55.9), New Orders (previously 50.4), and especially Employment (previously 46.2), which has fallen into contraction territory below the 50.0 threshold for the first time in six months. Given that services comprise over 70% of US GDP, any deviation from the forecast could trigger significant market volatility, offering insights into whether the deceleration trend is temporary or signals a more concerning economic slowdown.

📅 Wednesday, May 7th

• Federal Funds Rate: The Federal Reserve is widely expected to maintain the federal funds rate at its current target range of 4.25% to 4.50% during the upcoming FOMC meeting. This decision reflects the Fed’s ongoing assessment of persistent inflation concerns against indicators of slowing economic growth.
  
  Market data from the CME FedWatch Tool indicates a 97.4% probability that the Fed will keep rates unchanged at the May meeting. Market participants should closely monitor upcoming inflation readings and unemployment figures, which held steady at 4.2% in April.  Additionally, any shifts in the Fed’s rhetoric regarding their timeline for potential rate cuts over the remaining FOMC meetings scheduled for the year.
  
• FOMC Statement: Market participants should closely monitor Chair Powell’s press conference for any shifts in language regarding the “increased uncertainty” around economic outlook that was highlighted in the March statement, especially given the Fed’s downward revision of 2025 GDP growth forecast from 2.1% to 1.7%. Markets will also be scrutinizing any commentary that might confirm or alter the projected timeline for the anticipated two quarter-point rate cuts (totaling 50 basis points) in 2025, with current expectations suggesting cuts might not come before September, according to recent Fed communications.
  
• FOMC Press Conference: The upcoming FOMC Press Conference will follow the Federal Reserve’s two-day meeting where market participants will be closely monitoring whether the Fed maintains its current 4.25% to 4.5% interest rate target or signals a change in monetary policy direction. Market participants will also be analyzing any revisions to economic projections, including the expected slowdown in GDP growth to 1.7% and the unemployment rate of 4.4% for 2025.

📅 Thursday, May 8th

• Unemployment Claims: The upcoming report is expected to show 232,000 new unemployment filings for the week, representing a potential decrease of 9,000 from the previous week’s two-month high of 241,000, which could indicate stabilization in labor market conditions.
  
  Market participants should closely monitor whether the continuing claims figure, which previously surged to 1.916 million (the highest level since November 2021), shows further deterioration as this would suggest unemployed workers are experiencing longer durations without securing new employment. Market participants should also pay attention to revisions of previous data and the four-week moving average (currently at 226,000) for a clearer picture of the labor market trend, as sustained readings above 250,000 would likely spark concerns about broader economic weakness and potentially accelerate expectations for Federal Reserve rate cuts.

As earnings season continues, here are some stocks reporting earnings this week:

📅 Monday, May 5th

• Palantir Technologies (PLTR): Palantir will report its earnings after market close, with analysts expecting EPS of $0.13 (a 62% year-over-year increase) and revenue of $862.17 million (up 36% year-over-year).
  
  Market participants should closely monitor government revenue growth (projected at $460 million, up 37%) and commercial revenue expansion (forecast at $399-403 million, up 33-35%) as key indicators of the company’s dual-growth strategy, especially given recent contracts with ICE and NATO amid concerns about potential defense budget tightening. Additionally, market participants should focus on Palantir’s net dollar retention rate (previously 120%), operating margin (45% last quarter), and commentary around Artificial Intelligence Platform (AIP) monetization progress, as these metrics will be crucial in justifying the company’s premium valuation in the AI space.

• Ford Motor Company (F): Ford will release its earnings report, with analysts expecting EPS of just $0.003 (down from $0.49 in Q1 2024) and revenue of approximately $38.02 billion, representing an 11.12% year-over-year decline. Market participants should closely monitor Ford’s EV segment, which lost $5.1 billion in 2024 and is projected to lose up to $5.5 billion in 2025, while also tracking Ford Pro’s performance. The commercial unit saw Q4 2024 revenue rise 6% YoY to $16.2B. Key focus areas include the impact of 25% tariffs, Ford’s hybrid sales surge (+29.6% YoY in April 2025), and whether the company can meet analysts’ full-year 2025 EPS forecast of $1.34 amid pricing pressures.

📅 Tuesday, May 6th

• Super Micro Computer, Inc. (SMCI): Super Micro Computer will report its earnings where investors should compare final results with preliminary figures that shocked markets – expected revenue of $4.5-$4.6 billion (below analyst consensus of $5.4 billion) and EPS of $0.29-$0.31 (versus expectations of $0.50-$0.54).
  
  Market participants should closely monitor Supermicro’s gross margins, which declined by 2.2 percentage points in the latest quarter, primarily due to higher inventory reserves for older-generation products and expedited costs associated with launching new platforms. Attention should also be given to management’s commentary on whether the delayed customer platform decisions that shifted sales into Q4 have materialized. Key indicators will include Supermicro’s explanation for the revenue growth slowdown, and any updates on the company’s AI server demand pipeline as it navigates concerns in the broader AI infrastructure market.

• Marriott International (MAR): Marriott will report its first quarter 2025 earnings with analysts expecting revenues of approximately $6.19 billion (up 3.4% year-over-year) and adjusted EPS between $2.20-$2.26, below the previous Wall Street consensus of $2.37.
  
  Market participants should closely monitor worldwide Revenue Per Available Room (RevPAR) growth, guided at 3-4% for Q1, occupancy rates compared to the industry’s 0.4% Q1 improvement, and specific performance metrics across Marriott’s business segments including leisure travel which comprised 44% of global room nights in Q4 2024. Market participants should also pay attention to management’s commentary on macroeconomic factors including the impact of Trump’s China tariffs on travel demand, wage inflation (hotels showed 4% wage growth in Q1), and any revisions to Marriott’s full-year 2025 guidance of 2-4% global RevPAR growth and $9.82-$10.19 adjusted EPS.

📅 Wednesday, May 7th

• Walt Disney Company (DIS): Disney will report its earnings with analysts expecting revenues of $23.09 billion (up 4.5% year-over-year) and earnings per share of $1.19 (a 1.7% decline from the year-ago period).
  
  Market participants should closely monitor forecasted performance across Disney’s three key segments: Entertainment (expected revenue of $10.32 billion, up 5.3%), Sports ($4.36 billion, up 1.2%), and Experiences ($8.93 billion, up 6.4%), with particular attention to the Entertainment segment’s streaming profitability following Q1’s strong performance. Subscriber metrics will be crucial to watch, including a potential “modest decline” in Disney+ subscribers as forecasted by management, as well as any updates on the upcoming Disney Starlight parade and the planned fall launch of ESPN’s flagship streaming service.

📅 Thursday, May 8th

• Shopify Inc. (SHOP): Shopify will report Q1 2025 earnings, with market participants focused on whether revenue achieves 24-26% YoY growth, in line with company guidance. Gross profit is expected to grow at 21-23% rate, while free cash flow margin is projected to reach 13-17%.
  
  Market participants should watch GMV trends following Q4 2024’s $94.5 billion total, up 25.7% year-over-year. It’s also important to track growth in international markets and offline sales, both of which rose 33% in 2024. Shopify’s B2B segment saw GMV more than double in Q2 2024, with 140% growth. Key metrics include Shopify Payments, which processed 61% of GMV in Q2 ($41.1 billion), and rising merchant solutions revenue driven by increased Shop Pay adoption.

We hope this helps and happy trading!

– Trade and Travel Team