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

The S&P 500 and Nasdaq Composite closed at record highs, with the banking sector showing significant strength as Morgan Stanley, JPMorgan, and Wells Fargo hit new highs following positive Fed reports and dividend hikes. Luxury stocks also rebounded on UBS upgrades. Conversely, Apple remains a notable underperformer in the Dow year-to-date, while Amazon has significantly lagged the S&P 500 and tech sector since July 2021 despite absolute gains. Datadog surged after-hours on its S&P 500 inclusion, and an unconfirmed US-Vietnam trade deal proposing new tariffs introduces potential risk for numerous apparel and footwear companies already trading well off their highs.

Analysis

While the S&P 500 and Nasdaq Composite achieved record closing highs, performance is notably divergent across key sectors and individual large-cap names. The banking sector exhibits significant strength, with Morgan Stanley, JPMorgan, and Wells Fargo reaching new highs on the back of positive Federal Reserve stress test results and subsequent dividend hikes, pushing the SPDR S&P Bank ETF (KBE) up approximately 10% in a month. In technology, Datadog (DDOG) surged 10% after-hours on news of its S&P 500 inclusion, yet market leaders show weakness; Amazon (AMZN) has risen only 25% since July 2021, drastically underperforming the S&P 500's 45% gain and the tech sector's 91% rise in the same period. Apple (AAPL) remains a significant laggard, down 15% year-to-date and 18% from its December high, despite a minor rally. A major emergent risk is the unconfirmed report of a new U.S. trade deal with Vietnam, which proposes a 20% import tariff and a 40% transshipping levy, threatening margins for numerous apparel and footwear companies like V.F. Corp and Lululemon, many of which are already trading 30-57% below their recent highs. The luxury sector is showing signs of a tentative recovery, with LVMH and Kering rallying over 10% in a week following a UBS upgrade, though they remain well off their peaks.

Key Decisions for Investors

• Monitor developments on the proposed U.S.-Vietnam tariffs, as confirmation could severely impact apparel and footwear stocks like V.F. Corp and Deckers, which already exhibit significant price weakness.
• Given the strength and recent dividend hikes in the banking sector, consider maintaining exposure to names like Morgan Stanley and JPMorgan, but remain aware that the sector ETF (KBE) is approaching its prior November high, a potential resistance level.
• Selectively re-evaluate large-cap tech holdings, as Amazon's multi-year underperformance and Apple's continued weakness contrast sharply with catalyst-driven names like Datadog, underscoring the need for stock-specific analysis over broad sector bets.
• Approach speculative stocks like Joby Aviation with caution; while recent momentum is strong, the stated lack of FAA certification presents a fundamental long-term headwind to commercial viability.