Macro Events & News
Markets opened the week surprisingly resilient, weathering the Moody’s U.S. credit downgrade shared last Friday with only a slight decline compared to the sharp sell-offs following previous downgrades by S&P Global (2011) and Fitch (2023). Sentiment even began to recover midweek, with several names regaining upward momentum. However, that optimism was disrupted in the afternoon on Wednesday when weak demand at the 30-year Treasury auction sent yields spiking and equities sinking. The pressure intensified Thursday after Congress approved a massive new spending bill paired with tax cuts—actions that directly reinforced the concerns highlighted in Moody’s downgrade rationale, namely rising federal debt levels and widening fiscal deficits.
To close out the week, markets were rattled once again by trade headlines. “Tariff Man”, aka Trump, proposed a 50% tariff on EU goods starting June 1 and floated a 25% “tariff” on Apple iPhones not manufactured in the U.S. He also stated there would be no negotiations with the EU for the remainder of May, further escalating tensions and clouding the global trade outlook. The news did contribute to a drop in bond yields, which helped fuel a modest equity rebound heading into the long Memorial Day weekend.
On the earnings front, it was a relatively light week, but a few Watchlist names did report. Palo Alto Networks (NASDAQ:PANW) stood out—despite posting solid results and a slight full-year guidance increase, the stock initially sold off to $156 before rebounding sharply to close the week at $186, suggesting investors saw value amid the volatility.
The 10-year Treasury yield was active this week pushing past 4.6% shortly after the 30 year auctions before retreating back to 4.5% with the new threats to the economy. The VIX rose this week with the uneasy developments to 22.29.
All the major indexes retreated this week: the Dow down 2%, the S&P 500 down 3%, and the Nasdaq down 3%.
Watchlist News
2% ▼
Meta Platforms (NASDAQ:META) began the week rebounding alongside the broader market following initial weakness tied to Moody’s U.S. credit downgrade. The stock looked poised to reclaim the $650 level midweek, but sentiment reversed sharply after weak demand at Wednesday’s 30-year Treasury auction. Continued geopolitical and macroeconomic headlines pressured the stock through the remainder of the week, halting its recovery.
august bear notes
Meta continues to demonstrate resilience, backed by strong financial performance, dominant market position in digital advertising, and growing optionality in future revenue streams. Even the Google I/O news of competition in smart glasses failed to hold the stock down for long, as buyers stepped in. However, broader market turmoil—particularly rising yields and escalating trade tensions—dragged it lower. Once sentiment stabilizes, Meta remains well-positioned to outperform, especially with its monetization runway in products like Llama and Threads still largely untapped.
3% ▼
NVIDIA (NASDAQ:NVDA) climbed as high as $137 earlier in the week before retreating following the Treasury auction sell-off midweek. Positive catalysts included Wedbush reaffirming its $175 price target and Oracle confirming OpenAI’s plans to spend $40 billion on NVIDIA chips for U.S.-based data centers. Despite these bullish developments, the stock followed broader market trends and closed the week lower.
august bear notes
NVIDIA appeared ready to break into the $140s ahead of its upcoming earnings, supported by a constant flow of positive developments around AI infrastructure demand. However, the market’s macro-driven pullback, particularly the yield spike midweek, paused its momentum. While demand signals remain strong—echoed by enterprise commentary across the tech space—investors are right to be cautious about near-term headwinds heading into earnings next Wednesday. CEO Jensen Huang’s acknowledgment that export restrictions have not only caused a loss in sales but invigorated foreign competition, such as Huawei, which raises longer-term concerns about share erosion.
3% ▼
PayPal Holdings (NASDAQ:PYPL) looked ready to break above $80 earlier in the week, buoyed by supportive technicals and an Evercore price target raise to $75. However, the broader market pullback midweek halted its advance, and by Friday the stock slipped into the red, falling 2.5% on the day despite no material news.
august bear notes
PayPal’s setup looked promising earlier in the week, and early price action confirmed that buyers were stepping in. However, broader macroeconomic pressures ultimately overshadowed any momentum. The stock continues to suffer from a lingering crisis of investor confidence stemming from missteps under previous leadership. While new CEO Alex Chriss is making progress on delivering profitable growth—even if gradual—the broader narrative around PayPal has yet to turn decisively positive. The business remains fundamentally sound with valuable assets, but in the current environment, investors are still reluctant to reengage in a meaningful way. The current price level remains attractive, but it may take time—and a stronger shift in sentiment—before the market is ready to embrace PayPal again.
