Major Indexes Under Pressure as Treasury Yields Rise
The U.S. stock market is showing mixed signals on Wednesday, May 21, 2025, as investors digest yesterday’s losses and await key earnings reports. The S&P 500 is trading at 5,952.18, up 0.2% after snapping its six-day winning streak yesterday. The Dow Jones Industrial Average has recovered slightly to 42,715.36, gaining 0.1%, while the tech-heavy Nasdaq Composite is up 0.3% at 19,200.45.
Yesterday’s market decline came amid concerns over President Trump’s proposed tax-cut bill and the recent U.S. sovereign credit rating downgrade by Moody’s. The downgrade, which lowered the U.S. rating from Aaa to Aa1, cited the growing burden of financing the federal government’s outstanding budget deficit of $36 trillion and rising costs of debt under the high-interest rate regime.
Treasury Yields Remain a Key Focus
The yield on the benchmark 10-Year U.S. Treasury Note remains elevated at 4.5%, putting pressure on rate-sensitive sectors. This development is particularly concerning for mortgage rates, which are closely linked to the 10-year yield.
Traders currently expect at least two 25-basis-point Fed rate cuts by the end of 2025, with the first anticipated in September, according to data compiled by LSEG.
Major Retailers Headline Today’s Earnings Calendar
Retail Earnings in Focus
Today’s market action is heavily influenced by a slate of major earnings reports, particularly from the retail sector. Target Corporation (TGT) reported its Q1 2025 results before the market opened, with investors watching closely for signs of consumer spending health. Other notable retailers reporting today include TJX Companies (TJX) and Lowe’s Companies (LOW).
Lowe’s was expected to report earnings per share of $2.88, representing a 5.88% decrease compared to the same quarter last year. Meanwhile, TJX Companies’ consensus earnings forecast was $0.90 per share, a 3.23% decrease year-over-year.
Tech and Healthcare Reports
Beyond retail, several technology and healthcare companies are reporting today. Medtronic (MDT) released its Q4 2025 results this morning, with analysts expecting earnings per share of $1.58, an 8.22% increase from the same quarter last year.
In the tech sector, Chinese search giant Baidu (BIDU) and website-building platform Wix.com (WIX) reported before market open, while cloud data platform Snowflake (SNOW) is scheduled to release results after market close.
Political Developments Impacting Markets
The U.S. House of Representatives is expected to vote today on President Trump’s tax plan bill, which has been a source of market uncertainty. President Trump traveled to Capitol Hill yesterday, seeking to persuade Republican lawmakers to pass the sweeping tax-cut bill, which analysts estimate could add $3-5 trillion to the federal government’s debt.
Looking Ahead: Key Market Catalysts
Market participants are keeping a close eye on several upcoming catalysts, including Nvidia’s (NVDA) quarterly earnings report scheduled for May 28. As a leading AI chip manufacturer, Nvidia’s results could significantly impact the broader technology sector and market sentiment.
Additionally, investors are monitoring developments in global currency markets, with the dollar easing as traders evaluate the impact of Trump’s tax bill and upcoming G7 currency talks.
As we move through the trading day, market volatility may increase in response to earnings releases, Fed commentary, and developments on Capitol Hill, making this a crucial session for determining near-term market direction.