Market Pulse with Dan Sheehan

Good morning investors,

Markets head into Friday with a steady hand and an eye on clarity. Earnings from Exxon and Chevron surprised to the upside, offering ballast against softer guidance from Apple and Amazon. Meanwhile, hopes of renewed U.S.-China trade dialogue are helping stabilise sentiment after a volatile stretch. But the spotlight now turns squarely to the April jobs report — a potential inflection point in the market’s ongoing debate: are we in a slowdown, or simply digesting the impact of tariffs and uncertainty?

Futures

U.S. stock futures are trading higher this morning, buoyed by signs that Beijing may be open to restarting trade negotiations with the White House. S&P 500 futures are up 0.5%, while Nasdaq 100 futures and Dow futures are each up around 0.4%. The tone remains constructive despite overnight pressure from weaker Apple and Amazon forecasts. Investors appear to be taking a broader view — seeing tech softness as idiosyncratic, not systemic.

Risk appetite is cautiously returning. Gold is catching a bid on bargain-hunting while the dollar weakens slightly, suggesting reduced demand for defensive positioning. Treasury yields are relatively flat, with the 10-year hovering near 4.5%, indicating a market unwilling to move decisively ahead of today’s macro test. Oil continues to drift lower, down for a second week as traders await direction from OPEC+. Equity sentiment will hinge on the labor print, but early positioning suggests investors are willing to give the benefit of the doubt — for now.

Corporate Focus: Mixed Megacap Momentum

Apple delivered a mixed bag after the bell, beating on revenue and EPS but trimming its buyback program by $10 billion. iPhone and Mac sales were better than expected, but Services fell short. CEO Tim Cook flagged $900 million in expected tariff costs for the quarter ahead, and China revenue continues to underwhelm. The company’s push to shift production toward India and Vietnam remains a critical strategic hedge, but guidance implies margin pressures persist.

Amazon, meanwhile, disappointed on AWS revenue and issued light operating income guidance. While online ad sales were strong, tariff concerns loomed large. The company reassured investors that product prices won’t reflect tariffs directly, but the strain on third-party sellers is growing. AWS revenue grew 16.9%, slightly missing estimates, and the broader tone was one of cautious cost control rather than bullish expansion.

Exxon Mobil and Chevron provided a brighter tone, with both energy giants beating or meeting expectations. Exxon’s production gains from Guyana and the Permian basin helped deliver EPS of $1.76, ahead of consensus. Chevron matched estimates and hinted at strong future repurchases. Energy remains one of the few sectors where earnings strength is offsetting macro uncertainty.

Macro Watch: All Eyes on Jobs

April’s jobs report landed largely in line with a slowing but not collapsing labor market. Nonfarm payrolls rose by 130,000 — a clear step down from March’s 228,000, but not the cliff edge some feared. The unemployment rate held steady at 4.2%, while average hourly earnings rose by 0.3% month-on-month, translating to a 3.9% year-on-year increase — enough to suggest wage pressures are cooling, but not evaporating.

The real story lies in the context. This was the first report to land after the April 2 “Liberation Day” tariffs announcement, and while it’s still early to see the full impact, we’re beginning to feel the tremors. Hiring momentum has softened, especially in manufacturing and logistics, and federal layoffs continue to ripple through the economy. Jobless claims just hit their highest level since November 2021, and private payrolls via ADP showed a meagre 62,000 increase.

Still, for now, the labor market is bending, not breaking. This level of job growth might just be enough to keep the unemployment rate flat, particularly with slower immigration flows. But investors should be alert: a print below 100,000 in the months ahead would likely shift the conversation from “soft patch” to “hard landing” fast.

For now, this data gives the Fed room to remain patient. Markets are still pricing a 60% chance of rate cuts resuming by June — and barring a sharp deterioration, that probability holds. Today’s numbers support the idea that we’re in a tariff-induced pause, not a systemic downturn.

The AI Core Thesis Strengthens

This week confirmed that AI investment is no longer a tech story — it’s a market story. Meta’s results showcased how AI is strengthening its core ad business. Zuckerberg’s message was simple but compelling: AI makes their ads more effective, more targeted, and more profitable. The numbers back it up — AI-powered recommendations boosted Reels conversion rates by 5%, and one-third of advertisers used Meta’s creative tools last quarter.

This feeds directly into the broader theme I’ve been championing: software is the infrastructure of the AI economy. Just as Meta’s AI tools scale engagement and monetization, enterprise software names like Salesforce, Adobe, and ServiceNow (all part of IGV) are doing the same in business productivity. We’re in the early stages of a secular revolution where AI isn’t just a product layer — it’s the engine. Meta investing $70 billion this year confirms the stakes.

Anyone who followed my call on Nvidia below $100 knows the trajectory: pick the rails, not just the train. The same applies here. The software stack that supports AI workflows is now the most important part of tech. This week’s earnings didn’t just prove resilience — they confirmed acceleration.

Analyst Recommendations

Final Thought

Earnings season has shown that the worst-case fears aren’t playing out. Yes, consumer headwinds are building and tariff policy remains a wild card. But corporate America — particularly Big Tech and Energy — is still delivering. AI continues to be the growth engine, not a drag.

If today’s jobs number lands in a tolerable range, expect the market to reward stability. We’ve seen the bounce since my initial calls during April’s selloff. The thesis hasn’t changed: this is a growth scare, not a collapse. The more AI scales, the more resilient this market becomes.

Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.

Dan Sheehan

[email protected]

This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.