Stocks Rise Before the Open as Investors Weigh Big Tech Earnings, Iran War News
June S&P 500 E-Mini futures (ESM26) are up +0.15%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.22% this morning as investors digest earnings reports from big U.S. tech companies and latest developments in the Iran war. Alphabet (GOOGL) climbed over +6% in pre-market trading after Google’s parent company reported stronger-than-expected Q1 results. Amazon.com (AMZN) gained more than +2% after strong Q1 results and above-consensus Q2 revenue guidance, with CEO Andy Jassy noting $225 billion in revenue commitments for Trainium, AWS’s AI chip. Meta Platforms (META) slumped over -8% after raising full-year capital expenditures guidance. Microsoft (MSFT) slipped more than -1% as cloud-computing growth fell short of expectations. Sentiment improved as oil prices reversed early gains fueled by fears of U.S. military action against Iran to break negotiations. Axios reported President Trump would receive a briefing on Thursday regarding new military options, with U.S. Central Command outlining a plan for a 'short and powerful' strike wave. Investors await U.S. economic data, including the Fed’s core PCE inflation gauge and first-quarter GDP, with a focus on Magnificent Seven earnings, including Apple (AAPL). In yesterday’s trading, Teradyne (TER) and GE Healthcare (GEHC) lost over -19% and -13%, respectively, after weak Q2 guidance. Robinhood Markets (HOOD) sank over -13% after weaker-than-expected Q1 results. NXP Semiconductors N.V. (NXPI) jumped over +25% after better-than-expected Q1 results and strong Q2 guidance. U.S. durable goods orders rose +0.8% m/m in March, stronger than expectations, while housing starts unexpectedly surged +10.8% m/m to a 15-month high. Building permits fell -10.8% m/m, however. The Federal Reserve left rates unchanged at 3.50%-3.75%, with a 4-4 split, including a dissent from Governor Stephen Miran favoring a quarter-point cut. Jerome Powell confirmed his continued role as a governor post-chairmanship. U.S. rate futures priced in a 98.8% chance of no rate change at the next FOMC meeting. First-quarter corporate earnings season continues, with Apple, Sandisk, Western Digital, Eli Lilly, Merck & Co., Mastercard, and Caterpillar expected to report. Bloomberg Intelligence forecasts S&P 500 Q1 earnings growth of +12% YoY, marking the sixth consecutive quarter of double-digit growth. The U.S. Commerce Department’s advance GDP estimate is expected at 2.2% annual growth, supported by robust business investment. U.S. Personal Spending and Personal Income data are projected at +0.9% and +0.3% m/m, respectively. The Employment Cost Index is expected to rise +0.8% q/q. The U.S. Chicago PMI is forecast at 54.8, while the Leading Economic Index is expected to drop -0.2% m/m. Initial Jobless Claims are projected at 213K. The 10-year U.S. Treasury yield is at 4.40%, down -0.68%. Euro Stoxx 50 Index is down -0.11% as investors assess Middle East developments, economic data, and corporate earnings. Media stocks declined, notably Universal Music Group (UMG.A.DX) after lower Q1 revenue and plans to sell half its Spotify stake. Bank stocks also fell, dragged by BNP Paribas and Societe Generale’s quarterly results. Eurozone inflation rose to 3.0% y/y, the highest since September 2023, while GDP growth slowed to +0.1% q/q and +0.8% y/y. The Bank of England and European Central Bank are expected to keep rates unchanged at 3.75% and 2.00%, respectively, with potential rate hikes signaled for June. German retail sales fell -2.0% m/m and -2.0% y/y, while unemployment data showed weaker job growth. Asian markets settled mixed. China’s Shanghai Composite closed up +0.11%, supported by tech sector strength and upbeat factory activity data. Technology stocks rallied, with Cambricon Technologies jumping +20% after AI chip revenue more than doubled amid Beijing’s push for self-sufficiency. China’s April Manufacturing PMI came in at 50.3, while Non-Manufacturing PMI slipped to 49.4. Japan’s Nikkei 225 closed down -1.06% amid Middle East conflict concerns and mixed corporate earnings. Oil prices rose in Tokyo due to escalation fears. Japan’s March Industrial Production unexpectedly fell -0.5% m/m, though companies expect rebound. Retail sales rose +1.7% y/y. Japan’s government bond yields hit a 29-year high due to rising oil prices and inflation concerns. Fujitsu and Oriental Land plunged over -13% and -10%, respectively, after issuing below-consensus profit guidance. TDK climbed +8% after projecting a 15% increase in net profit for the current financial year.
Source: barchart.com