Market Wrap | U.S. Stocks Mixed Amid Fed Warnings and Sector Shifts

On April 25, 2025, the U.S. stock market saw mixed performance with the S&P 500 rising 0.74%, the Dow Jones Industrial Average gaining 0.05%, and the Nasdaq Composite surging 1.26%. The Federal Reserve's latest financial stability report highlights global trade tensions and policy uncertainty as significant risks to the U.S. financial system. Concerns over the sustainability of U.S. debt and market volatility have also escalated. The Fed's survey indicates that liquidity in Treasury and equity markets has deteriorated, although overall market functioning remains orderly.

Based on the day's market performance, the technology and discretionary consumer goods sectors outperformed the S&P 500. Notably, the technology and discretionary consumer goods sectors demonstrated strong performance. Conversely, the utilities, consumer staples, energy, materials, industrial, real estate, and financial sectors moved in the opposite direction of the S&P 500.

Nvidia shares rose 4.30% as Morgan Stanley raised its revenue forecast for the company, citing strong demand for AI technologies. Palantir Technologies saw its stock climb 4.64% after Bank of America increased its price target and gave the stock a "buy" rating. Merck's shares rose 3.63% due to improved gross margins and a favorable product mix that enhanced profitability. AbbVie's stock increased 3.15% on the back of strong revenue growth, better-than-expected earnings, and upgraded guidance. Tesla's shares surged 9.80% following the federal government's decision to ease rules for deploying self-driving cars, which is expected to benefit the company.

Aerovate's stock surged over 737% following the announcement of a special dividend, enhancing shareholder value amidst its merger with Jade Biosciences. Meanwhile, WW's shares rose nearly 168% as Galloway Capital Partners' acquisition and opposition to a bankruptcy filing boosted investor confidence. Creative Global's stock dropped over 75% due to supply chain disruptions impacting its production capabilities. Intensity Therapeutics' stock price fell over 37% following a $2.35M public offering announcement.

The Federal Reserve's survey indicates that liquidity in Treasury and equity markets was low and worsened further in April, although market functioning remained orderly, reflecting potential impacts on market stability. Meanwhile, the U.S. has approved a $2.19 billion sale of Tomahawk arms to the Netherlands, indicating significant military and geopolitical developments. Additionally, a U.S. judge has set a hearing for May 2 to discuss remedies in the Justice Department's antitrust lawsuit against Google, highlighting ongoing regulatory scrutiny of major tech companies. Lastly, the IMF's Georgieva emphasized the importance of scanning the financial sector, including non-banks, to identify potential sources of instability, suggesting a focus on global financial health.