From Rally to Reality | Fed, Jobs, and Earnings Set the Tone – Week of May 04
Dive into the market analysis for the upcoming week of May 04, 2025 and the week’s key economic data. Stay ahead with expert insights and forecasts.
Market Report
The stock market wrapped up another winning week, with the S&P 500 climbing 2.9%, marking its ninth consecutive weekly gain. The Nasdaq surged 3.4% and the Dow added 3.0%, driven by bullish sentiment surrounding trade talks and strong tech earnings.
Drivers of Market Strength
Trade war optimism after China signaled openness to resumed U.S. negotiations.
Strong earnings from:
Microsoft (MSFT): +11.1%
MSFT Daily Chart Meta (META): +9.1%
META Daily Chart Technical breakout: S&P 500 broke above its 50-day moving average (5,582).
Encouraging economic data:
March personal spending rose +0.7%.
Core PCE inflation was flat MoM.
April jobs report: +177,000 nonfarm payrolls, 4.2% unemployment.
Underperformers
Apple (AAPL) fell -1.9% post-earnings.
Amazon (AMZN) saw only a modest +0.5% weekly gain.
Sector Breakdown
10 of 11 sectors ended higher.
Top gainers: Industrial (+4.3%), Communication Services (+4.2%), Tech (+4.0%).
Energy was the lone decliner, down -0.7%.
Ongoing Concerns
Weakening economic data continues to fuel recession fears:
Consumer Confidence dropped to 86.0 (the lowest Expectations reading since 2011).
Inflation expectations rose to 7.0% (highest since Nov 2022).
ISM Manufacturing remained contractionary (below 50%).
Q1 GDP shrank -0.3%, with GDP Deflator up +3.7% (stagflation concerns).
Weekly Market Heatmap
Weekly Sector Performance
Market Triangle
⦿ Trend → Mixed: Short-term positive, Long-term negative
Short-term → Positive
Medium-term → Postive
Long-term → Negative
⦿ Breadth → Mixed
25% Quarter → Negative
52w NHL → Postive
MA → Negative
⦿ Momentum → Mixed: Positive but high volatility
Velocity → Positive
Volatility → High
The market is showing conflicting signals —
momentum is improving in a volatile environment, with breadth and trend improving.
Broader Market Analysis
Rotation into Defensive Sectors: Utilities (XLU), Financials (XLF), and Real Estate (XLRE) show relative strength with rising momentum and support from 20/200 SMAs.
Momentum Divergence: Many sectors are above their 20-day moving averages, but struggle at the 50-day, indicating short-term strength but medium-term resistance.
Weakness in Growth & Risk-On: Consumer Discretionary (XLY), Energy (XLE), and Small Caps (IWM) remain below all key SMAs with negative momentum, reflecting cautious sentiment.
Capital Inflows Concentrated: M-IO highlights strong buying in Industrials (XLI), Technology (XLK), and Utilities (XLU), while Energy and Health Care are seeing net outflows.
Broad Index Caution: SPY and QQQ remain range-bound with neutral YTD performance, suggesting market indecision despite strong leadership from select sectors.
All four major U.S. equity ETFs — SPY (S&P 500), QQQ (Nasdaq 100), IWM (Russell 2000), and MDY (S&P MidCap 400) — are extending their bounce from April lows, with each index reclaiming recent support zones and printing higher lows on rising volume. SPY and QQQ have rebounded ~17% and ~21% from their bottoms, while IWM and MDY are up ~17% and ~17% respectively — highlighting a synchronized recovery across both growth and cyclical segments.
While all remain below key resistance zones and longer-term trendlines, the broad participation is notable: SPY and QQQ are challenging descending 50/200-day moving averages, and IWM/MDY are showing early-stage leadership with deeper percentage rebounds and improving relative volume. This broadening strength hints at rotation and renewed institutional interest, particularly in underperforming mid- and small-cap spaces. However, until price confirms above overhead resistance, the rally should still be considered a tactical uptrend within a structurally corrective market.
Looking Ahead to the Upcoming Week
The upcoming week is loaded with high-impact economic events that could heavily influence market direction — especially surrounding Fed policy and labor data.
Key Economic Events to Watch:
Monday, May 5 – 10:00am ET
🔹 ISM Services PMI
A closely watched measure of business activity in the services sector. Forecast is 50.2 — just above the expansion threshold. Any downside surprise could reignite growth concerns.
Wednesday, May 7 – 2:00pm ET
🔺 Federal Funds Rate & FOMC Statement
The market expects rates to hold steady at 4.50%, but traders will dissect the FOMC statement for clues on timing and tone of future rate cuts.
Wednesday, May 7 – 2:30pm ET
🎙 FOMC Press Conference
All eyes on Powell. Language shifts on inflation, tariffs, or economic risks could trigger major equity and bond market swings.
Thursday, May 8 – 8:30am ET
📊 Weekly Jobless Claims
Forecasted at 232K vs. previous 241K. Lower-than-expected claims could fuel soft-landing hopes; higher prints might revive recession fears.
Friday, May 9 – 11:30am ET
🗣 FOMC Member Waller Speaks
Expect more context on the Fed’s inflation and rate outlook. Could reinforce or contradict Wednesday's messaging.
📌 Takeaway:
With the Fed front and center, plus labor data and services sector health in focus, markets may be volatile as traders reassess rate expectations and macro risk. Keep your positions flexible.
Earnings Highlights:
The upcoming earnings week is loaded with heavyweight reports across tech, consumer, and industrial sectors — a critical window for assessing Q2 momentum.
Monday – May 5:
🔹 Before Open: ON Semiconductor (ON), Tyson Foods (TSN), CMI
🔹 After Close: Palantir (PLTR), Hims & Hers (HIMS), Ford (F), Vertex (VRTX), Navitas (NVTS)
Tuesday – May 6:
🔹 Before Open: Celsius (CELH), Datadog (DDOG), Ferrari (RACE), Lemonade (LMND), ADM, Marriott (MAR)
🔹 After Close: AMD, Arista Networks (ANET), Rivian (RIVN), EA, Wynn Resorts (WYNN), Coupang (CPNG), Devon Energy (DVN)
Wednesday – May 7:
🔹 Before Open: Uber (UBER), Disney (DIS), Fiverr (FVRR), Barrick Gold (GOLD), Oscar Health (OSCR)
🔹 After Close: ARM, MercadoLibre (MELI), AppLovin (APP), IONQ, Carvana (CVNA), Datadog (DASH), AMC, Paycom (PAYC)
Thursday – May 8:
🔹 Before Open: Shopify (SHOP), Warner Bros Discovery (WBD), Crocs (CROX), Jumia (JMIA), YETI, COP, Novavax (NVAX), Papa John’s (PZZA)
🔹 After Close: Coinbase (COIN), Roku (ROKU), TTD, Affirm (AFRM), Pinterest (PINS), Lyft (LYFT), Toast (TOST)
Friday – May 9:
🔹 Before Open: Enbridge (ENB), Terawulf (WULF)
📌 Takeaway:
This week’s lineup is heavy on AI and consumer-tech names midweek (AMD, Uber, MELI, Roku), while Thursday delivers a wave of growth and fintech plays. Watch for major sentiment shifts post-Disney, Coinbase, and Palantir reports. Volatility could spike around tech and macro-driven names.
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