One of the best-known market trends is backed by decades of historical performance. 

Five things you need to know

• Another blizzard of earnings will arrive today, with Microsoft and Meta in the spotlight. Tech was under pressure, with Super Micro Computer slumping 15% as results fell short of estimates.
• Europe’s traders joined their Wall Street rivals in handing banks some of their best revenue hauls in years as President Donald Trump’s tumultuous trade policies rocked markets in recent months. On the flip side, Mercedes and Stellantis to join the list of firms withdrawing guidance.
• Trump renewed his criticism of Federal Reserve Chairman Jerome Powell and touted his tariff regime at an event to mark his 100th day in the White House. US inflation and gross domestic product prints are due later.
• China’s factory activity slipped into the worst contraction since December 2023, suggesting early damage from the US tariffs and prompting calls for a speedy policy boost.
• US consumer companies point to a weaker economic outlook. Starbucks sinks 7% on weaker-than-expected results. Mondelez, the owner of the Oreo and Cadbury brands, said wary US shoppers are prioritizing essentials over buying snacks.

Mayday, mayday

An age-old market maxim looms over the bounce in US stocks: Sell in May and go away.

One of the best-known market trends, the “sell in May” effect is backed by decades of historical performance: Investing in a fund that debuted in 1993 and tracks the S&P 500 during the May-October period yielded a cumulative return of 171%, compared to a 731% gain for November-April, an analysis from Bespoke Investment Group found. The pattern last held from November 2023 to October 2024.

Seasonality is among a multitude of factors investors are crunching to get a read on how stocks might behave in coming weeks, even as their faith in many once-reliable indicators has been shaken by the unpredictability of President Donald Trump’s tariff policies. Taken alone, the old adage would argue against hopping on a searing rebound that has seen the S&P 500 recover 12% from its lows of the month. The index is still down 5.5% year-to-date.

“The scales are tipped in favor of the ‘May-Sellers’ this year,” said Tyler Richey, co-editor at Sevens Report Research, adding that the risks are skewed toward the S&P 500 suffering another big decline next month. — Esha Dey

On the move

• Snap shares tumble 14% in premarket trading after the social-networking company said its advertising business is navigating macroeconomic “headwinds.”

• Visa rises 0.7% following an earnings beat.

• Adyen falls 5.2% in Amsterdam. The Dutch payment processor warns that risks related to rising economic uncertainty could slow growth.

• Semiconductor companies and other makers of computing hardware also fall. Nvidia -1.9%, Dell -3.1%, Hewlett Packard Enterprise -1.6%.

• Caterpillar, Yum! Brands and Humana are among firms reporting earnings before the opening bell. Watch Booking after the travel company adjusted its revenue outlook to account for increased economic uncertainty. —Subrat Patnaik

Meta matters

When Meta reports earnings this afternoon, it faces a high hurdle to satisfy anxious investors.

The Facebook owner’s shares have fallen the least of any Big Tech company during the market selloff that’s hammered the sector this year. Meanwhile, better-than-expected results from Alphabet last week raised expectations for the digital advertising ecosystem at a time of widespread uncertainty about how the Trump administration’s tariffs will hit the business. Snap’s results on Tuesday ratcheted up concerns about a decline in ad pricing.

“Google’s surprise to the upside puts a lot of pressure on Meta,” said Brian Mulberry, a client portfolio manager at Zacks Investment Management. “It’s going to be interesting to see what their ad business looks like. There’s definitely some growing expectations based on what Google did.” —Carmen Reinicke

Crypto haven?

Bitcoin has surged past gold and tech stocks alike in April, rekindling the debate over whether the largest cryptocurrency serves as a refuge from market turmoil.

Bitcoin posted a roughly 12% increase in April, with advocates saying it acted as an alternative hedge amid growing concerns over US fiscal policy and institutional stability.

Geoff Kendrick, global head of digital assets research at Standard Chartered, said he expects a “strategic asset reallocation away from US assets” to fuel the next rally.— Sidhartha Shukla

Word from Wall Street

Written by: Esha Dey and Alexander Nicholson — With assistance from Carmen Reinicke, Subrat Patnaik, and Sidhartha Shukla @Bloomberg

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