After almost two months of dramatic market swings -- including one point at which the S&P 500 had fallen 19% from its all-time high -- the closely-watched VIX Volatility Index has declined back below its historical average of 20. Meanwhile, stock prices have recovered most of the lost ground and the benchmark S&P has again turned positive for the year. We can't say the recent downdraft was unexpected. Indeed, in our 2025 Market Outlook, we noted that investor complacency was high, that tariffs and trade wars could slow the economy, and that stock valuations were susceptible in the event of a sell-off in the Information Technology sector. That was our "Bearish Case," and certain elements are likely to linger for the next few months, at least. Our "Base Case" called for another year of growth in the U.S. economy (and no recession), declining interest rates, and double-digit EPS growth. Each of those planks in the "Base Case" platform is currently in place. So assuming that the Trump administration gets its economic growth plans firmly on track, there's reason to expect that equity prices can't continue to recover. Back to the market, the current VIX fear index reading is around 18.0, which is again below the 10-year average of 20 and is consistent with a bull market. Indeed, during the long bull market in the 2010s, the VIX averaged 18 and even touched lows below 10 in 2017. We continue to think that the S&P 500 is in the early/mid-stage of a bull market that dates to October 2022. And while the path for equities won't be straight up, we suggest investors favor growth stocks in their portfolios at the current market and economic juncture.

Wayfair engages in e-commerce in the United States (88% of 2024 sales), Canada, the United Kingdom, and Ireland. It's also embarked on expansion into the brick-and-mortar landscape, with a handful of stores between the AllModern, Birch Lane, Joss & Main, and Wayfair banners. At the end of 2024, the firm offered more than 30 million products from more than 20,000 suppliers under the brands Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold. Its offerings include furniture, everyday and seasonal decor, decorative accents, housewares, and other home goods. Wayfair was founded in 2002 and began trading publicly in 2014.

Based in Boston, Wayfair is a leading online retailer focused on furniture, housewares, and other home decor products. Its websites include Wayfair, Joss & Main, All Modern, Birch Lane, and Period. The company's primary market is the U.S., though it also has operations in Canada and Europe.

When Walmart Speaks, People Listen This week, Walmart reports earnings and new data on inflation and consumer spending will be released. Last week, the Dow Jones Industrial Average lost 0.2%, the S&P 500 shed 0.5%, and the Nasdaq was down 0.3%. All three indices are in the red for the year, with Dow down 3%, the S&P 500 lower by 4%, and Nasdaq off by 7%. The earnings headliner this week is Walmart, which is due to report on Thursday. In addition, reports come from Fox and Hertz on Monday; On Holding, Unilever, and Under Armour on Tuesday; Cisco Systems, Sony, and Alcon on Wednesday; and Applied Materials, CAVA Group, and Deere on Thursday. Some 90% of S&P 500 companies have reported so far, and earnings for the quarter are up 14% from the prior-year quarter. That is far above the consensus, which called for EPS growth of 3%-8%, and follows 17% growth in 4Q24 EPS and 9% growth in 3Q24, according to LSEG. For the current quarter, Healthcare is the leading sector, up 46%, and Energy is at the bottom, down 16%. On the economic calendar, an update on the Consumer Price Index (CPI) comes out on Tuesday; Retail Sales, Industrial Production, Capacity Utilization, and the Producer Price Index (PPI) are featured on Thursday; and Housing Starts and the University of Michigan's read on consumer sentiment are atop the list on Friday. The Economic Call of the Week from Argus' Chief Economist Chris Graja, CFA, is for another strong quarter from Walmart. Chris offers the following. 'Walmart's quarterly earnings are one of our favorite economic indicators because 145 million customers shop at Walmart every week in the U.S. The company provides valuable insights on trends in customer spending and inflation. We expect an update on tariffs and the availability and cost of merchandise for back-to-school and the holidays.' In addition, Chris expects this week's economic calendar will answer three important questions about the economy. Are tariffs showing up in prices? Are consumers still doing okay? And, finally, are inflation expectations well-anchored? Here are Chris's forecasts. First, he expects Tuesday's report on CPI to provide some hard data on whether tariffs are beginning to show up in consumer inflation. We may see higher year-over-year prices for new and used cars and lower prices for gasoline. Second, he expects Thursday's report on retail sales to show that consumers remain resilient. Strong vehicle sales to front-run tariffs should help year-over-year growth. Restaurant sales have implications for the big services component of GDP. Third, the University of Michigan's consumer sentiment survey is admittedly 'soft' data, but still allows for an update on inflation expectations. A decision by the Fed to ease interest rates may depend on the belief that inflation expectations are well-anchored near 2%. While market expectations based on Treasury yields appear to be in pretty good shape, the expectation for one-year inflation was high, at 6.5%, in the April Michigan survey. A decline in May would be most welcome. On other important data, the Atlanta Fed GDPNow measure forecasts 2.3% for 2Q. This follows a surprise decline of 0.3% for 1Q GDP. The Argus growth estimate for GDP has been lowered to 0.5% from 1.3% for full year 2025. The Cleveland Fed Inflation Nowcast forecasts a 2.4% rate for CPI for May, which is higher than the April rate. Mortgage rates stayed flat last week, with the average 30-year fixed-rate mortgage at 6.76%, according to FreddieMac. Gas prices ticked up two cents to an average of $3.15 per gallon for regular gas. Looking ahead, the next Fed rate decision is on June 18, with odds for a rate cut having dropped to 17%, according to the CME FedWatch rate tool. After that, the next meeting is on July 30, and odds jump to 60% for a cut.