From Yahoo Finance: 2025-05-01 06:50:00

Tamer Tariffs Drive Stock Recovery: The stock market has been volatile in April due to tariffs and tariff talk. The Trump administration’s softer stance on tariffs has led to a market rally, though stocks are still below year-opening levels. The S&P 500 closed at 5,525 on 4/25/25, down 6.1% YTD.

Sectors in 2Q25: Growth Returns: Sector leadership in 2Q25 differs from 1Q25, with Utilities and Information Technology performing well. Energy, Healthcare, and Consumer Discretionary have seen losses. Only four sectors are positive YTD: Utilities, Consumer Staples, Healthcare, and Real Estate. Information Technology is no longer the worst-performing sector.

Earnings Update: The 1Q25 earnings scorecard has improved, with blended EPS growth estimates rising to 10.1% for the S&P 500. About 73% of companies have surpassed expectations, and the magnitude of the EPS beat has increased to 10%. This positive trend indicates a strong earnings season for the market. In the first quarter of 2025, Communication Services component companies like Alphabet, Netflix, and Comcast have exceeded earnings expectations, contributing to an overall increase in EPS. Energy sector has experienced the worst EPS performance with a high-teens decline, while six or seven sectors have reported positive growth and four or five have seen declines.

The cumulative EPS increase for Communication Services companies has outperformed both the long-term and intermediate-term averages, currently standing at 9%. Energy sector has had the worst EPS performance in the first quarter of 2025, with a high-teens decline. Several sectors are reporting positive growth, while others are showing year-over-year declines.

Communication Services companies like Alphabet, Netflix, and Comcast have driven a strong upside in EPS for the first quarter of 2025, surpassing the long-term and intermediate-term averages. Energy sector, on the other hand, has experienced the worst EPS performance with a high-teens decline. Multiple sectors have reported positive growth, while some are facing declines.

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