Futures Point Lower as Markets Digest Key Economic Data
U.S. equity futures are trading lower Friday morning, with S&P 500 futures down 0.37%, Dow futures declining 0.45%, and Nasdaq 100 futures off 0.41% as of 6:30 AM ET. Investors are processing yesterday’s mixed economic signals and positioning ahead of the weekend.
Yesterday’s Market Action
The major indices closed mixed on Thursday with the S&P 500 edging up 0.15% to 5,897.26, while the Dow dropped 0.31% to 41,983.12. The Nasdaq outperformed with a 0.68% gain to 19,167.42, powered by continued strength in semiconductor stocks.
Economic Data Review & Outlook
Thursday’s economic releases painted a contradictory picture of the U.S. economy:
- Retail Sales rose 0.4% MoM in April, exceeding expectations of 0.3%, suggesting consumer resilience despite inflation pressures
- Producer Price Index surprised to the upside at 0.3% MoM vs. 0.2% forecast, potentially complicating the Fed’s rate cut timeline
- Initial Jobless Claims came in at 232,000, slightly below the anticipated 235,000
- Philadelphia Fed Manufacturing showed continued contraction at -12.5, though better than the forecasted -10.0
Today’s calendar features:
- Housing Starts & Building Permits (8:30 AM ET)
- Consumer Sentiment preliminary May reading (10:00 AM ET)
Corporate Earnings Spotlight
Walmart (WMT) reported strong Q1 results, with adjusted EPS of $0.59 vs. $0.58 expected and revenue of $167.2 billion topping estimates. The retail giant raised full-year guidance, citing robust e-commerce growth and market share gains in grocery. Shares are up 3.2% premarket.
Alibaba (BABA) beat expectations with revenue of $33.7 billion (+11% YoY) and EPS of $1.79. Cloud intelligence division grew 15%, though international commerce showed signs of slowing. Shares are trading up 1.6% premarket.
Applied Materials (AMAT) reported after the bell with EPS of $2.17 on revenue of $7.1 billion, both ahead of consensus. The company issued strong guidance on AI-driven demand for semiconductor equipment. Shares are up 4.3% premarket.
Premarket Movers
Notable Gainers:
- NVIDIA (NVDA): +2.8% after announcing expanded AI chip capacity and securing additional contracts with major cloud providers
- Deere & Company (DE): +2.1% following solid earnings and maintained guidance despite agricultural sector pressures
- Palo Alto Networks (PANW): +3.5% on analyst upgrades citing accelerating security demand
Notable Decliners:
- Take-Two Interactive (TTWO): -7.3% after missing earnings estimates and announcing another delay for Grand Theft Auto VI to Q3 2026
- DoorDash (DASH): -5.1% following reports of competitive pressures and rising customer acquisition costs
- Moderna (MRNA): -4.2% after pipeline setbacks for key respiratory vaccines
Global Markets & Macro Picture
Asian markets closed mostly lower, with the Nikkei down 0.83% and Shanghai Composite falling 0.51%. European markets are trading down across the board, with the DAX off 0.64% and the FTSE 100 declining 0.37%.
The U.S.-China tariff situation remains fluid, with mixed signals from Washington regarding the sustainability of Monday’s 90-day truce. Beijing officials have expressed cautious optimism but noted “significant hurdles remain.”
Treasury yields have moved higher following yesterday’s inflation data, with the 10-year settling at 4.56%, its highest level since late January. Markets are now pricing a 60% probability of a Fed rate cut in September, down from 78% a week ago.
Brent crude is trading at $69.20/barrel, down 0.8%, while gold has pulled back slightly from yesterday’s record high but remains above $3,050/oz.
Key Analyst Calls
- Bank of America: Upgraded AMD to “Buy” from “Neutral,” raising PT to $200 from $165
- Morgan Stanley: Downgraded Boeing to “Equal-weight” from “Overweight” citing delivery challenges despite China’s ban lift
- Goldman Sachs: Initiated coverage of Palantir with “Buy” rating and $30 PT, highlighting AI-driven government contract potential
- Jefferies: Cut Ford to “Hold” from “Buy” following guidance suspension related to supply chain concerns
Looking Ahead
The week concludes with consumer sentiment data that could provide insight into inflation expectations. After Thursday’s PPI surprise, markets will be watching closely for signals about consumption trends and the potential impact on Fed policy. The U.S.-China tariff discussions will remain in focus, with any weekend developments likely to drive Monday’s trading.
The VIX has risen to 19.7, reflecting increased near-term uncertainty ahead of what historically has been a challenging summer period for equities.
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