Stock markets look likely to open lower on Wednesday, and this time it might stick, interrupting a six-straight-day winning streak for the S&P 500 and its tracking index, the Vanguard S&P 500 ETF (NYSEMKT: VOO).
Both the index and the ETF are trending towards a 0.9% decline in pre-market trading after the U.S. Commerce Department reported that gross domestic product fell at an annualized 0.3% pace in Q1 2025. That hasn’t happened since Q1 2022, so the news came as a surprise to economists who had predicted 0.4% GDP growth.
Consumer spending is also reported to have decelerated from 4% in Q4 2024 to 1.8% in Q1 2025.
Earnings
S&P 500 index component Booking Holdings (Nasdaq: BKNG) reported what it called a “good start to 2025” last night, with earnings per share of $24.81 beating consensus forecasts for $17.57, revenue rising to $4.8 billion (also ahead of expectations), and a forecast for 10% to 12% revenue growth in Q2.
Conversely this morning, Caterpillar (NYSE: CAT), also an index component, reported an earnings miss. Sales of $14.25 billion fell short of expectations, and profits, $4.25 per share, were a dime short of consensus expectations. Management forecast Q2 sales “similar” to what it did in Q2 2024 on lower sales prices, even before taking account of any tariffs impact.
Analyst Calls
In upgrades and downgrades news, DA Davidson upgraded component Airbnb (Nasdaq: ABNB) to buy, citing the company’s “continued penetration of online Lodging” reservations and calling the company the “category leader in alternative accommodations.”
Wolfe Research is upgrading component Ford Motor Company (NYSE: F) to “peer perform” ahead of earnings next week, arguing the automaker is “relatively insulated from tariff risk given [its] US-centric manufacturing base.” Wolfe believes that “Large Auto Parts Tariff Relief” announced by the Trump Administration “could offer Ford a meaningful competitive advantage.”
Conversely, First Solar (Nasdaq: FSLR) got hit by downgrades to perform at Oppenheimer and to underweight at KeyBanc, citing an earnings miss and further “tariff and tax policy uncertainty.”
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