Equity Indexes Wrap: Tech Mega-Caps Slip; McCormick Leads S&P 500 Gainers

The Dow

Johnson & Johnson (JNJ) ticked up 0.4% amid reports it was in talks to acquire medical device maker Shockwave Medical (SWAV). 

Visa (V) finished flat as it agreed to lower swipe fees to settle a legal battle it and peer Mastercard (MA) have fought with retailers for decades. 

McDonald’s (MCD) also finished little changed after announcing an agreement to expand an existing partnership with Krispy Kreme (DNUT) and sell its donuts nationwide by the end of 2026. 

Boeing (BA) fell 2% as credit rating agency Moody’s said it was considering downgrading some of the jet maker’s debt. 

Apple (AAPL) slipped 0.7% as it set a date (June 10) for its annual developer conference. 

The S&P 500

McCormick & Co. (MKC) jumped 10.6% after reporting better-than-expected earnings amid cost cuts and higher prices.

Seagate (STX) climbed 7.4% after Morgan Stanley upgraded the stock to “overweight” and raised its price target, citing AI benefits and the company’s leadership in developing higher-margin data storage solutions. Competitor Western Digital (WDC) rose 4.9%. 

MGM Resorts (MGM) gained 4.3% after Mizuho Securities rated the company a buy in a note endorsing several leaders in the growing sports betting industry. 

United Parcel Service (UPS) fell 8.2% despite forecasting 2026 revenue above Wall Street’s estimates. 

International Paper (IP) fell 6.4% amid reports it was in talks to acquire UK-based DS Smith in an all-stock transaction valued at more than $7 billion. DS Smith had previously agreed to be acquired by Mondi for approximately $6.5 billion. 

Nvidia (NVDA) slumped 2.5%, leading the day’s mega-cap laggards. 

The Nasdaq 100

Tesla (TSLA) rose 2.9% after CEO Elon Musk said in a post on X that all U.S. self-driving enabled cars would receive a one-month free trial of the software starting this week. 

Micron Technology (MU) rose 1.4% to notch its eighth consecutive winning session. 

Mega cap AI beneficiaries Broadcom (AVGO) and Meta Platforms (META) fell 1.5% and 1.4%, respectively. 

Seagate Stock Jumps After Morgan Stanley Upgrades on Improving Margins

Seagate Technology (STX) shares surged on Tuesday after Morgan Stanley upgraded the stock and raised its price target, citing the company’s leadership in developing higher-margin advanced data storage technologies.

Morgan Stanley analysts, led by Erik Woodring, upgraded the data storage solutions provider to overweight from equal-weight and raised their price target by 58% to $115. The new target represents 30% upside from Monday’s closing price of $88.21. “The key pillar of our more bullish outlook is STX's ability to drive margin expansion through technology leadership, areal density gains, recent cost actions, better pricing, and build-to-order dynamics that can help to improve factory utilization,” the analysts wrote in a note Tuesday.  Morgan Stanley expects a transition to higher-margin heat-assisted magnetic recording disk drives to push Seagate’s gross margin up to a range of 32-35%, 2 percentage points above management’s targets, within the next few years.  Plus, Seagate could benefit from booming demand for artificial intelligence and the data storage solutions it requires. “While Gen AI’s impact on [hard disk drive] demand remains a debate amongst investors,” analysts wrote, “…we believe that more data created, retained, and stored will be a ‘rising tides lifts [sic] all boats’ dynamic for the storage industry,” analysts said.  Seagate shares were up 8% at $95.30 late in the session Tuesday. They have risen nearly 12% so far this year. 

Why Spot Ether ETFs Could Face a Difficult Path to Approval

The Securities and Exchange Commission (SEC) is considering applications for spot exchange-traded funds (ETFs) for ether (ETHUSD), the native token of the Ethereum blockchain and the second largest cryptocurrency by market capitalization. But experts are increasingly skeptical that approval will come any time soon. 

A primary reason analysts are skeptical is the fact that ether is staked—a process in which cryptocurrency holders lock up their funds as collateral to support the operations of a blockchain network in exchange for rewards in the form of additional cryptocurrency.

Last year, the SEC cracked down on staking, fining cryptocurrency exchange Kraken $30 million and forcing the company to shut down its staking-as-a-service business for not following securities law. It also sued Coinbase (COIN) for its staking offering. That litigation is still in process.

In a note dated March 12, crypto researcher Noelle Acheson pointed out that the uniqueness of staking ether could lead to denial because there's a "regulatory fog" surrounding the activity.

-Christiana Sciaudone

Read more here about the uphill battle investment giants face in their efforts to launch a spot ether ETF.

Viking Therapeutics Soars After Reporting Positive Results From Oral Weight-Loss Drug

Shares of Viking Therapeutics (VKTX) jumped over 25% in early trading Tuesday after the company reported positive results in a test of its experimental weight-loss treatment.

The company said a Phase 1 trial of an oral version of its VK2735 drug showed obese patients who took it for 28 days demonstrated a dose-dependent decline in average body weight of 5.3% versus the baseline, and a 3.3% drop compared to those who took a placebo.

Last month, shares of Viking soared to an all-time high after the company posted positive Phase 2 results of an injectable form of VK2735. Both the oral and injectable versions notably use GLP-1/GPT receptor agonists found in weight-loss medicines such as Novo Nordisk’s (NVO) Ozempic and Wegovy. Demand for such medicines has boomed, and pharmaceutical firms have been rushing to find a way to market them in pill form.

Viking Therapeutics shares were up 22.5% to $84.70 Tuesday afternoon. They have more than quadrupled in value so far this year.

-Bill McColl

UPS Slumps Despite Upbeat Revenue Forecast

United Parcel Service (UPS) was the worst-performing stock in the S&P 500 on Tuesday despite releasing financial projections that beat estimates, as the delivery giant works to cut costs amid a slowdown in shipping demand.

UPS projected revenue for the 2026 fiscal year of between $108 billion to $114 billion, well above analyst estimates compiled by Visible Alpha. UPS posted $91 billion in revenue for fiscal 2023, and previously said it anticipates revenue for fiscal 2024 of between $92 billion to $94.5 billion.

The company said it expects its adjusted consolidated operating margin for 2026 to come in above 13%, led by a domestic operating margin of at least 12%, both above Bank of America analysts' expectations.

UPS and rival FedEx (FDX) had a tough 2023 amid a slowdown in shipping demand from pandemic highs. Last year, FedEx announced plans to restructure and cut billions in costs, and its cost-cutting efforts helped it post results last week for the fiscal third quarter of 2024 that beat estimates.

UPS shares gave up early gains and were 7.8% lower at $144.38 Tuesday afternoon. They have lost about 8% year to date.

-Aaron McDade

Truth Social Owner Trump Media & Technology Stock Soars in Debut

Shares of Trump Media & Technology Group, newly merged with Digital World Acquisition Corp. (DWAC), soared as they started trading under the new "DJT" ticker symbol Tuesday morning.

The companies announced that DWAC's shareholders approved the merger Friday, and DWAC's stock surged Monday after it announced plans to debut under the new stock ticker Tuesday. That surge continued as markets opened Tuesday in the combined company's trading debut.

Trump Media stock, whose new ticker corresponds to the former president's initials, was up 39% at $69.80 early Tuesday afternoon, after rising as much as 59% to $79.38 in the first half hour of trading.

-Aaron McDade

Tesla Stock Jumps as Musk Offers Free Driver-Assistance Trial

Tesla (TSLA) shares gained Tuesday after Chief Executive Officer (CEO) Elon Musk announced that the electric vehicle (EV) maker will offer owners a free trial of the company’s driver-assist option.

On X, the social media site he owns, Musk said, “All US cars that are capable of FSD will be enabled for a one month trial this week." FSD stands for the carmaker's Full Self-Driving system.

The move comes as the company tries to gin up sales with demand for EVs industry-wide slumping. Tesla has offered 5,000 free hours of Supercharging for customers who take delivery by the end of the month, and 10,000 free hours for owners who trade in their Tesla for a new one.

Tesla shares were up 5.1% to $181.39 midday Tuesday, but have still lost more than a quarter of their value in 2024.

-Bill McColl

ETF Inflows Top Single Stocks for First Time in 5 Weeks

Lost amid the hype over Bitcoin ETFs, equity funds staged an upset last week. That’s according to a note from Bank of America, which highlighted that client inflows to equity ETFs topped single-stock inflows for the first time in five weeks.

The buying was broad-based for BofA’s clients, which bought equity ETFs of all types—growth, value, and blended—and across large and small caps. Only mid-cap ETFs saw outflows, the bank said. Overall, clients bought ETFs in seven of 11 sectors, for a total net inflow of $400 million.

Still, individual stocks have seen three times the flows into ETFs year-to-date as investors have searched for alpha in a buoyant market. 

-Christiana Sciaudone

Krispy Kreme Soars as Doughnuts Set To Be Sold in McDonald's Across the US

Shares in Krispy Kreme (DNUT) soared in early trading Tuesday after the company said it is planning to sell its doughnuts at fast-food giant McDonald's (MCD) restaurants nationwide by the end of 2026.

The rollout will start in the second half of this year, but it will take roughly two and a half years as Krispy Kreme more than doubles its distribution to satisfy the partnership. Krispy Kreme Chief Executive Officer (CEO) Josh Charlesworth said the partnership would more than double the company's points of access by the end of 2026.

McDonald’s began selling Krispy Kreme doughnuts at some Kentucky restaurants in Oct. 2022 as part of a pilot program. Krispy Kreme also launched small-scale tests with other companies such as Costco Wholesale () internationally, it said in its 2023 annual report published last month.

Shares of Krispy Kreme were up 25% at $15.56 Tuesday morning. McDonald's was little changed at $278.78.

-Fatima Attarwala

McCormick Surges as Cost-Cutting, Higher Prices Fuel Earnings Beat

McCormick & Co. (MKC) stock jumped early Tuesday following the release of a first-quarter earnings report that beat expectations, with the spice maker affirming its full-year projections for 2024.

In the first quarter of fiscal 2024, McCormick posted sales of $1.6 billion, adjusted net income of $169 million, and adjusted earnings per share (EPS) of 63 cents. All of those figures are higher than what McCormick posted in the first quarter of 2023, and also above analyst estimates compiled by Visible Alpha, which predicted that McCormick would post a slight decrease in all those categories.

McCormick credited higher prices for its 3% sales growth and higher gross profit margin compared with the year-ago quarter, offsetting flat demand. The company also attributed its 140-basis-point profit margin expansion to cost-cutting initiatives and a favorable product mix.

McCormick shares were up about 8.9% at $76.18 Tuesday morning. With Tuesday's gains, the stock has risen more than 11% in the past 12 months.

-Aaron McDade

Stocks Making the Biggest Moves in Premarket Trading

Gains:

• Trump Media & Technology Group Corp. (): Shares of Truth Social parent company, which previously traded as Digital World Acquisition Corp. (DWAC), soared more than 20% ahead of its first day of trading under its new name. 
• Krispy Kreme Inc. (DNUT): Shares of the donut maker jumped more than 18% after it inked a deal to have its donuts sold in McDonald’s locations nationwide by the end of 2026. 
• Reddit Inc. (RDDT): Shares of the newly public social media company surged 10% after jumping 30% yesterday as options on the stock began trading. 
• McCormick & Co. Inc. (MKC): Shares of the spice maker rose more than 6% after it reported better-than-expected earnings of 63 cents per share for the three months ended Feb. 29. 
• United Parcel Service Inc. (UPS): Shares of the delivery company rose more than 1% after it released long-term financial targets, including a goal of consolidated revenue of between $108 billion and $114 billion in 2026.
  

Losses:

• Baidu Inc. (BIDU): Shares of the Chinese internet company slipped 1% after gaining more than 3% yesterday amid reports Apple was in talks to use its artificial intelligence on Chinese iPhones. 

Stock Futures Rise Ahead of Debut of Trump's Truth Social

Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading on Tuesday.

S&P 500 futures were 0.4% higher.

Nasdaq 100 futures traded 0.5% higher about an hour before markets opened.