Macro

Stocks Steady on Mixed Fed Remarks, First Solar Up 6%, Bitcoin Below $70K

Markets Steady as Investors Await FOMC Minutes; First Solar Rallies 6%, Bitcoin Falls Below $70,000

By Athena Xu

5/21, 13:12 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
AutoZone, Inc.
First Solar, Inc.
Keysight Technologies Inc.
Lowe's Companies, Inc.
Macy's Inc
Nordson Corporation
Palo Alto Networks, Inc.
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Key Takeaway

  • Major U.S. averages remained flat as investors awaited FOMC meeting minutes and digested mixed Fed remarks on inflation and rate hikes.
  • First Solar surged nearly 6% after UBS raised its price target to $270, while Palo Alto Networks and Lowe's saw declines due to softer guidance and margin pressures.
  • Bitcoin fell below $70,000 amid a quiet trading session with minimal sector movements; crude oil dropped 1.6%.

Market Stagnation Ahead of Key Events

Tuesday's trading session in the U.S. markets was notably quiet, with major averages hovering around the flatline by midday. Investors appeared to be in a holding pattern, awaiting the release of the Federal Open Market Committee (FOMC) meeting minutes on Wednesday and Nvidia Corp's earnings report. The market's cautious stance was further influenced by mixed messages from Federal Reserve officials. Atlanta Fed President Raphael Bostic expressed expectations for a slow decline in inflation and ruled out a rate cut before the fourth quarter. In contrast, Board member Christopher J. Waller took a more dovish stance, stating that the risk of inflation reaccelerating is off the table and he does not foresee a rate hike.

Sector Performance and Commodities

Sector movements were minimal, with financials and solar stocks showing slight outperformance. Small caps, represented by the iShares Russell 2000 ETF, softened. Metal commodities took a breather after gold and copper hit fresh record highs on Monday, while crude oil fell by 1.6%. In the cryptocurrency market, Bitcoin saw some movement, reflecting broader market trends.

Earnings Reactions

Several companies experienced notable stock movements in response to earnings reports. Palo Alto Networks Inc. started the session 6% lower following softer-than-expected guidance but recovered some losses during the morning. Lowe's Companies Inc. fell 3% after indicating emerging margin pressures in Q2. AutoZone Inc. dropped 4.3%, Eagle Materials Inc. fell 7%, and Amer Sports Inc. declined by 8%. Macy's Inc. remained flat, while Keysight Technologies Inc. and Nordson Corp. saw significant declines of 9.58% and 8.6%, respectively. On the positive side, First Solar Inc. rallied nearly 6% after UBS raised its price target from $252 to $270, maintaining a Buy rating.

Street Views

  • Raphael Bostic, Atlanta Fed President (Neutral on inflation and interest rates):

    "I expect inflation to decline but at a slow pace, and I do not foresee a rate cut before the fourth quarter."

  • Christopher J. Waller, Federal Reserve Board Member (Dovish on inflation risk and interest rates):

    "The risk of inflation reaccelerating is off the table and I do not expect a rate hike."