Wednesday’s big stock stories: What’s likely to move the market in the next trading session

Stocks rose Tuesday amid anticipation for trade talks with China and the May CPI reading, with the Nasdaq gaining 0.6% and the S&P 500 up 0.55%. J.M. Smucker plunged 15.6% after forecasting weak sales, while McDonald's declined for the seventh consecutive day following a Redburn Atlantic downgrade citing potential revenue loss from weight-loss drugs; conversely, Disney jumped 2.65% after acquiring the remaining stake in Hulu, and Intel led the S&P 500 with an 8% gain.

Analysis

The market exhibited positive momentum with the S&P 500 rising 0.55% for its third consecutive winning day, positioning it 1.8% below its February 19 high, while the Nasdaq Composite advanced 0.6%, now less than 2.5% shy of its mid-December all-time peak. This optimism precedes crucial updates on U.S.-China trade negotiations and the May consumer price index, for which economists forecast a 2.4% year-over-year increase (2.9% excluding food and energy). Significant single-stock movements highlighted divergent fortunes: McDonald's (MCD) shares declined 1.4%, extending its losing streak to seven days—the longest since 2013—following a Redburn Atlantic downgrade to 'sell' due to concerns that weight-loss drugs could reduce revenue by nearly $500 million; the stock is down 7.9% from its March high. J.M. Smucker (SJM) suffered its largest-ever single-day drop, plummeting 15.6% to $94.41, its lowest since January 2019, after announcing an anticipated sales decline for the current quarter. Conversely, Disney (DIS) shares surged 2.65% to levels unseen since April 2024, driven by its acquisition of the remaining Hulu stake for a less-than-anticipated $440 million. The semiconductor sector displayed notable strength: Intel (INTC) was the top performer in the S&P 500 and Nasdaq 100, gaining nearly 8% and rallying approximately 13% for the month, although it remains down 28.6% year-over-year. Nvidia (NVDA) increased almost 1% to its highest close since late January, surpassing Microsoft (MSFT) to become the most valuable company at $3.513 trillion. Taiwan Semiconductor (TSM) rose 2.6% after reporting a 40% surge in May revenue, marking a 59% increase from its April lows. Apple (AAPL) failed to recover losses from its Worldwide Developers Conference, with the stock down 19% year-to-date. Tesla (TSLA) saw a third day of gains, up 10.5% this week ahead of its Robotaxi event, but is still down 19.25% in 2025. Insmed (INSM) shares soared nearly 29% to a 25-year high following positive trial results for its hypertension drug and Mizuho suggesting it could be a takeover target.

Key Decisions for Investors

• Investors should closely monitor the upcoming May CPI data and developments in U.S.-China trade talks, as these events are poised to influence near-term market direction following recent gains.
• Re-evaluate positions in McDonald's (MCD) given the analyst downgrade and projected revenue impact from weight-loss drugs, and in J.M. Smucker (SJM) following its significant stock plunge and negative sales outlook.
• Assess the semiconductor sector for continued momentum, particularly noting Intel's (INTC) strong recent performance against its year-over-year decline, alongside sustained strength in names like Nvidia (NVDA) and Taiwan Semiconductor (TSM).
• Consider the strategic implications of Disney's (DIS) full Hulu ownership and Insmed's (INSM) positive clinical trial results as potential catalysts for growth in these specific stocks.
• Approach event-driven stocks like Tesla (TSLA), which is anticipating its Robotaxi unveiling, with an awareness of its recent volatility and year-to-date underperformance relative to peers, and await Oracle's (ORCL) upcoming earnings for insights into enterprise technology spending.