The stock market rallied on Tuesday after President Trump delayed imposing a 50% tariff on imports from the European Union. The S&P 500 gained 2%, with the Vanguard S&P 500 ETF (VOO) trading 0.1% higher in pre-market trading on Wednesday. Investor focus is now shifting to corporate earnings reports.
Abercrombie & Fitch beat expectations, earning $1.59 per share in Q1, $0.20 better than expected. The stock surged over 28% pre-market. Macy’s also reported a small earnings beat of $0.16 per share versus the expected $0.15.
Its stock rose nearly 2%. However, both companies cut their guidance after reporting the beats. Abercrombie expects Q2 earnings to miss consensus, ranging from $2.10 to $2.30 per share.
They also forecast full-year earnings of $9.50 to $10.50, below estimates. Macy’s warned Q2 earnings could be as low as half the expected $0.33 per share.
S&P 500 rallies after tariff delay
For the full year, they guided earnings of $1.60 to $2, well below analyst forecasts. In other news, Baird upgraded credit rating firm Fair Isaac Corporation (FICO) to outperform with a $1,900 price target. The analyst stated, “We consider FICO Scores the best financial model we’ve seen,” viewing it as an essential product for the market.
The postponement of tariffs on EU goods boosted markets in Asia as well. Germany’s DAX climbed 0.8% to a record high, helped by strong domestic data. The Hang Seng in Hong Kong rose 0.4%.
Major earnings reports are expected later this week from companies including Nvidia, Salesforce, Costco, and Best Buy. Investors will be watching closely to gauge the health of corporate profits. The dollar gained against other major currencies, supported by the strong consumer confidence and durable goods data.
Gold prices edged higher to around $3,309 per ounce. Oil prices steadied as markets weighed a potential increase in OPEC+ supply against possible new US sanctions on Russia.
