The S&P 500 futures are up 13 points, trading 0.3% above fair value. The Nasdaq 100 futures are up 58 points, also 0.3% above fair value. The Dow Jones Industrial Average futures are up 65 points, trading 0.1% above fair value.
Early gains are driven by pre-open rises in NVIDIA (NVDA, Financial) and other large-cap stocks. The market is also bouncing back after losses earlier this week. The Dow Jones Industrial Average and Russell 2000 are both down more than 2.0% this week.
There's some caution ahead of the long holiday weekend. Markets will be closed on Monday for Memorial Day.
Treasury activity is quiet. The 10-year note yield is unchanged at 4.48%, and the 2-year note yield is up one basis point to 4.94%.
Today's economic schedule includes:
- 8:30 ET: April Durable Orders (expected -0.8%; prior 2.6%) and Durable Orders ex-transportation (expected 0.2%; prior 0.2%)
- 10:00 ET: Final May University of Michigan Consumer Sentiment survey (expected 67.6; prior 67.4)
In corporate news:
- Intuit (INTU) 624.69, -37.57, -5.7%: Beat earnings by $0.50, beat revenue estimates; guidance for July quarter EPS below consensus, revenue above consensus.
- Ross Stores (ROST) 141.31, +9.45, +7.2%: Beat earnings by $0.11, revenue in line, comparable sales up 3%; Q2 EPS guidance in line, comps up 2-3%; FY25 EPS guidance in line, reaffirmed comp guidance; Q2 revenue projection in line with consensus.
- Workday (WDAY) 230.25, -30.65, -11.8%: Beat earnings by $0.16, revenue in line; lowered FY25 subscription revenue guidance, raised non-GAAP operating margin guidance.
- Booz Allen Hamilton (BAH) 156.43, +4.07, +2.7%: Beat earnings by $0.10, beat revenue estimates; FY25 EPS guidance in line, revenue above consensus.
- Deckers Outdoor (DECK) 983.00, +78.36, +8.7%: Beat earnings by $1.94, beat revenue estimates; FY25 EPS guidance below consensus, revenue slightly below consensus.
Reviewing overnight developments:
Today's News
Alphabet (GOOG, Financial) and Meta Platforms (META, Financial) are in discussions with major Hollywood studios to license content for AI video generation software. Warner Bros. Discovery (WBD, Financial) is reportedly interested in licensing some of its programs, while Netflix (NFLX, Financial) and Disney (DIS, Financial) are open to other types of collaboration. Microsoft-backed OpenAI has also held similar discussions with Hollywood.
SpaceX is considering plans to sell existing shares at a price valuing the company at roughly $200 billion. This valuation would place SpaceX above major U.S. defense contractors such as Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC). The company’s valuation climbed to $180 billion in its most recent tender offer in December 2023.
Samsung Electronics' (SSNLF) new high bandwidth memory (HBM) chips have not yet cleared Nvidia's (NVDA, Financial) evaluation due to heat and power consumption issues. The issues are with Samsung's HBM3 and upcoming HBM3E chips. Samsung is working on optimizing its products in close collaboration with customers.
Novo Nordisk’s (NVO, Financial) GLP-1 agonist semaglutide, marketed as Wegovy for weight loss, reduced the risk of death by 20% in a study for patients with type 2 diabetes and chronic kidney disease. Following the study’s success, shares of dialysis-related companies such as Fresenius (FMS), DaVita (DVA), Outset Medical (OM), and Baxter International (BAX) tumbled.
Tesla (TSLA, Financial) has lowered the output of its Model Y electric car by a double-digit percentage at its Shanghai plant since March. Data from the China Association of Automobile Manufacturers showed a significant year-over-year decline in Model Y production, coinciding with increased competition in China.
Tesla (TSLA, Financial) CEO Elon Musk expressed his opposition to U.S. tariffs on Chinese electric vehicles, despite the Biden administration quadrupling tariffs to 100%. Musk stated that Tesla competes well in the China market without tariffs and favors no tariffs or tax incentives on EVs.
Nvidia (NVDA, Financial) is cutting the price of its most advanced AI chip for the China market, the H20, due to weak demand. The H20 chip is now being sold at a discount compared to Huawei's Ascend 910B, signaling an abundant supply in the market.
Verastem (VSTM, Financial) announced the start of a regulatory submission to win FDA approval for its cancer therapy combo, avutometinib and defactinib. This follows sharp gains in the stock after positive data from a Phase 1/2 study for the drug combo in treating pancreatic cancer.
Alibaba Group Holding (BABA, Financial) priced its private offering of $4.5 billion aggregate principal amount of 0.50% convertible senior notes due 2031. The offering is expected to close on May 29, 2024, with net proceeds of approximately $4,436 million.
Netlist (NLST, Financial) was awarded a $445 million verdict in a patent dispute with Micron (MU). The jury found willful infringement of Netlist's patents by Micron, marking the second such verdict in just over a year for the company.
Lucid Group (LCID) announced a restructuring plan to reduce its workforce by approximately 400 employees, or about 6% of its total workforce. The company expects to recognize a Q2 charge of $19 million to $23 million related to the restructuring.
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