As the S&P 500 pauses at its record high, Wednesday’s market action is dominated by key corporate earnings and geopolitical concerns. Investors are closely monitoring Chinese ETFs like FXI, MCHI, and KWEB amidst U.S.-China trade tensions, with Alibaba set to report earnings after a recent slump. Cisco Systems, however, shows strength ahead of its earnings release, having hit a new high.
Additionally, a significant number of blue-chip companies, including Nike and IBM, are hitting multi-year lows, signaling potential shifts in market sentiment and sector performance.
As the S&P 500 takes a breather after reaching a new record high, Wall Street is closely watching several key stories that could shape the upcoming trading session. Investors are keeping an eye on U.S.-China relations, major tech earnings, and a raft of companies hitting significant lows.
China ETFs Under Pressure Amidst Shifting Trade Dynamics
Concerns surrounding President Trump's trip to China continue to cast a shadow over Chinese equities. The iShares China Large-Cap ETF (FXI) is down 11% from its October peak, though it has seen a modest 3% gain in the past month. Similarly, the iShares MSCI China ETF (MCHI) has fallen 13.6% from its October high, with a 1.8% advance over the last month. The tech-heavy KraneShares CSI China Internet ETF (KWEB) has experienced a steeper decline, down 33% from its October high, despite a 1.6% increase in the last month. These movements highlight the market's sensitivity to geopolitical and trade developments between the two economic giants.
Chart showing the performance of the iShares China Large-Cap ETF (FXI) over the past month.
Alibaba and Cisco Set to Report Earnings
E-commerce titan Alibaba is slated to release its earnings before the market opens. The Chinese internet giant has faced headwinds, with its shares declining 15% over the last three months and 30% from their October high. Investors will be looking for signs of a turnaround and insights into the company's growth prospects in a challenging economic environment.
On the other side of the earnings ledger, Cisco Systems will report after the closing bell. The networking hardware giant has shown resilience, with its stock jumping 32% in the past three months and hitting a new high on Tuesday. Cisco has gained approximately 21% over the past month and is up 8.5% in May, indicating strong investor confidence.
Chart illustrating the performance of Cisco Systems (CSCO) over the last three months.
Honeywell CEO to Appear on CNBC; Numerous Stocks Hit New Lows
Honeywell CEO Vimal Kapur is scheduled to appear on CNBC's "Morning Call" to discuss the industrial conglomerate's diverse business segments, which span aerospace, automation, security, and warehouse logistics. Honeywell shares have experienced a pullback, trading 12% below their March high, but have seen a 2.5% increase this week.
Meanwhile, a notable trend of major companies hitting new lows is emerging. Nike is at a 12-year low, Ingersoll Rand and Jacobs Solutions are at 13-month lows, Otis Worldwide is at a 42-month low, IBM is at a 13-month low, and NRG Energy is at a 12-month low. These lows suggest sector-specific challenges or broader market rotation impacting established companies.
CNBC Pro LIVE: Strategies for Long-Term Wealth Building
In related news, CNBC is hosting its third CNBC Pro LIVE event, focusing on actionable strategies for building long-term wealth. The event aims to cut through market noise and provide investors of all levels with clearer thinking and stronger investment approaches. Interested individuals can sign up for a discount code via email.
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