Happy Wednesday! Q1 earnings sparked a powerful market rally, but is this momentum sustainable? Dive in to see which sectors are thriving and which ones face headwinds going forward.

Also, April’s softer inflation numbers may feel like a sigh of relief, but experts suggest this may be the calm before the storm. Read on to see why.

Plus, if you’re looking for an emerging player in AI-powered personal safety and care, check out today’s sponsor.

In Today's Edition

• MARKET RECAP

• FIVE ZINGERS

• MARKET HISTORY

• ONE FOR THE ROAD

S&P 500 Earnings Stun The Street In Q1 With Broad-Based Beats, Double-Digit Growth

Q1 earnings didn’t just meet expectations — they crushed them.

With nearly 80% of S&P 500 companies beating analyst estimates, the index posted earnings growth of 13.3%, marking its second straight quarter of double-digit growth. Of the "Magnificent Seven," six of them beat estimates, with the average earnings surprise being nearly twice that of the S&P 500.

From tech titans to healthcare heavyweights, the breadth of the beat was unexpected. But beneath the headline numbers lies a deeper narrative. While investors cheered the big rebound in stock prices, the sharp rise in valuations could be signaling froth.

Certain sectors dazzled with massive surprises — Communication Services, Information Technology and Health Care in particular — however, Energy and Utilities struggled to keep pace.

With valuations now above historical norms, investors are left wondering if the market’s optimism has gotten ahead of itself. The big beats are in, but which sectors still have room to run and which ones are skating on thin ice?

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Yesterday: U.S. indexes continued to rally, with tech and energy companies leading the way. With the gains, the Nasdaq notched its highest close since February and is now positive on the year. The Dow rose for a fourth consecutive session and is just 5.5% from all-time highs. The S&P 500 has now been up three of the past four days and is only 2.8% from all-time highs set back in February. Meanwhile, the 10-year Treasury yield climbed to 4.45%, oil continued to rise over geopolitical concerns and the U.S. dollar strengthened against major currencies. On the economic front, job openings rose more than expected to 7.4 million in April, pointing to ongoing labor market strength despite a slight uptick in layoffs and a dip in voluntary quits. Meanwhile, manufacturing orders fell 3.7%, more than forecast, though broader trends suggest the sector remains stable.

On Our Radar: Analysts will be paying attention to the ISM Services Index and the Fed’s Beige Book — due later today — for fresh signals on economic momentum and clues about the Federal Reserve’s policy outlook. On the earnings front, Five Below (FIVE) and MongoDB (MDB) will headline a slate of companies that will report after the bell today.

The Silicon Throne: Nvidia surpassed Microsoft to reclaim the title of the world’s most valuable publicly traded company. Discover what’s fueling the run and why analysts are so bullish on the chip maker.

QQQool Moves: The QQQ ETF just saw $7.2 billion in inflows — its second-best month ever — as investors piled into tech following a U.S.-China trade truce and a massive rally led by the Magnificent Seven. Curious what’s fueling this historic run and whether there’s more room to ride? Click to dive in.

Code Red: Despite solid year-over-year growth and strong cash flow, CrowdStrike missed Wall Street’s estimates, sending shares tumbling after hours. With a $1 billion buyback on the cards and a mixed outlook, is this a buying opportunity? 

Surprise: Despite missing Q2 estimates, shares of Hewlett Packard climbed as the company raised its full-year earnings forecast. With a boosted outlook, here’s what else is driving the optimism.

Off Target: Shares of Sportsman's Warehouse plummeted after the company missed on both the top and bottom lines. Read on to see if this is a turnaround play — or something to avoid.

Don’t miss Benzinga’s must-attend virtual forum on the rapidly evolving ETF market! Join us on June 5th at 10 am ET to explore the latest trends in crypto ETFs, thematic ETFs and innovative structures. Gain valuable insights into strategies reshaping how financial advisors guide clients and how retail investors adjust their portfolios.

On This Day In 2020…

Nikola Corporation (NKLA) went public in June 2020 through a reverse merger with VectoIQ Acquisition Corp, a special purpose acquisition company. Despite initial excitement — even surpassing Ford and other notable automakers in market capitalization — the company encountered major hurdles, including fraud allegations against founder Trevor Milton, who was eventually sentenced to prison. Alongside legal troubles, the company grappled with production delays, recalls and mounting financial strain. Ultimately, in February, nearly five years after its IPO, the company filed for Chapter 11 bankruptcy protection, with its stock price plummeting more than 99% from its peak.

QUOTE OF THE DAY

“Invest for the long haul. Don’t get too greedy and don’t get too scared.”

— Shelby Davis

April Inflation Print Was The 'Last Vestige' Of Pre-Tariff Impact, Fed's Goolsbee Says

April’s cooler inflation reading may have lulled investors into a sense of calm, but that comfort could be short-lived.

Chicago Fed President Austan Goolsbee isn’t buying the soft numbers. During a speaking event in Cedar Rapids, Iowa, Goolsbee called the latest data the “last vestige” of a pre-tariff economy — hinting that what lies ahead may look very different. With new trade barriers, inflation may be poised for a resurgence, and the Fed’s path forward could get a lot more complicated.

Goolsbee isn’t alone in raising red flags. Goldman Sachs analysts see inflation drifting higher into 2025, with tariffs quietly starting to lift prices in goods-heavy sectors like electronics, autos, and apparel.

Business leaders across the Midwest — where tariff exposure runs deep — are already rewriting price sheets to pass the costs directly on to consumers. Despite his caution, Goolsbee still sees room for optimism on interest rates. Read on to learn why.

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