The S&P 500 futures are down 18 points, trading 0.3% below fair value. Nasdaq 100 futures are down 52 points, also trading 0.3% below fair value. Dow Jones Industrial Average futures are down 120 points, trading 0.3% below fair value.
The stock market is set for a lower open. Growth concerns are high after a weak ISM Manufacturing report yesterday. Pre-open losses in big tech stocks are adding to the negative sentiment.
Treasury yields and oil prices are lower this morning, reflecting ongoing slowdown worries. The 10-year note yield is down two basis points to 4.38%, and the 2-year note yield is down two basis points to 4.80%. WTI crude oil futures are down 1.9% to $72.81 per barrel.
Market participants will receive the April Factory Orders report and the April JOLTS - Jobs Openings report at 10:00 ET.
In corporate news:
- Meta Platforms (META 473.90, -3.59, -0.8%): Instagram is testing forced ads, according to IndieWire.
- Taiwan Semiconductor Manufacturing (TSM 152.76, -2.19, -1.4%): Board elected Dr. C.C. Wei as Chairman and CEO; may raise production fees for NVIDIA, according to Nikkei.
- HealthEquity (HQY 86.00, +4.78, +5.9%): Beats earnings by $0.14, beats revenue; guides FY25 EPS and revenue above consensus.
- GitLab (GTLB 45.45, -1.62, -3.4%): Beats earnings by $0.07, beats revenue; guides JulQ EPS above consensus, revenue in-line; guides FY25 EPS above consensus, revenue above consensus.
- FibroGen (FGEN 1.42, +0.19, +15.5%): Announces FDA clearance of new drug application for FG-3165 for solid tumors; announces clinical trial supply agreement with Regeneron Pharmaceuticals.
- Lockheed Martin (LMT 466.29, -1.31, -0.3%): Awarded $1.93 billion U.S. Army contract modification.
- Bath & Body Works (BBWI 47.50, -4.31, -8.3%): Beats earnings by $0.05, beats revenue; guides Q2 EPS below consensus, revenue in-line; guides FY25 EPS in-line, revenue in-line.
- Johnson & Johnson (JNJ 147.20, -0.54, -0.4%): Announces results from a subgroup analysis of the Phase 3 CARTITUDE-4 study.
- GameStop (GME 27.38, -0.62, -2.2%) and AMC Entertainment (AMC 4.689, -0.12, -2.5%): Volatile premarket action after surging Monday in response to posts from Keith Gill.
Reviewing overnight developments:
Today's News
Investment firm J.P. Morgan has highlighted Broadcom (AVGO, Financial) and Marvell Technology (MRVL, Financial) as leaders in the high-end custom chip market, which is expected to grow significantly due to advancements in generative artificial intelligence. The market size for application-specific integrated circuits (ASICs) could reach between $20B and $30B, with an annual growth rate of 20%. Broadcom is reportedly collaborating with Google (GOOG, Financial) (GOOGL, Financial) on its next-gen TPU v7, ensuring revenue stability through 2026.
The Biden administration is preparing an executive order to curb illegal immigration at the U.S.-Mexico border, impacting operators of detention centers like CoreCivic (CXW, Financial) and GEO Group (GEO, Financial). The order will temporarily close the border to asylum seekers when daily crossings exceed 2,500, reopening when numbers fall below 1,500. This comes as the U.S. faces labor shortages in sectors like construction, manufacturing, agriculture, and transportation.
Viking Therapeutics (VKTX, Financial) saw its stock rise after announcing positive 52-week data from a mid-stage trial for its weight loss drug, VK2809, targeting non-alcoholic steatohepatitis (NASH). The trial showed significant reductions in liver fat and improvements in fibrosis, with 69% of participants achieving NASH resolution compared to 29% in the placebo group.
Intel (INTC, Financial) unveiled its new generation of processors and AI chips at the Computex tech conference in Taiwan. The new Xeon server processors and Gaudi AI accelerator chips are designed to regain market share from competitors Nvidia (NVDA, Financial) and Advanced Micro Devices (AMD, Financial). The Xeon 6 family of processors promises better performance and power efficiency for high-intensity data center workloads.
Nvidia (NVDA, Financial) received a price target increase from Mizuho Securities, citing strong opportunities linked to its Hopper platform and the upcoming Blackwell GPU platform. The stock split planned for June 7 is also expected to boost demand for Nvidia shares.
India's benchmark indices experienced significant declines as vote counts from the national election indicated a closer-than-expected race. The Nifty index fell 8.5%, and the BSE index dropped 8.2%, the largest intraday declines since March 2020. The ongoing vote count suggests a narrower margin of victory for Prime Minister Narendra Modi's Bharatiya Janata Party (BJP).
Upstart Holdings (UPST, Financial) was upgraded to Neutral from Sell by Redburn Atlantic due to peaking macro headwinds and progress in product innovation and funding. Despite a 40% year-to-date slump, the analyst expects a more stable environment moving forward, although challenges in auto and higher-credit-quality customer trends remain.
Taiwan Semiconductor Manufacturing (TSM, Financial) acknowledged discussions with customers about relocating chip facilities due to rising tensions with China. However, CEO C.C. Wei stated that moving facilities out of Taiwan is not feasible, as 80% to 90% of TSM's production capacity is based there.
Realty Income (O) raised the lower end of its 2024 earnings guidance and increased its expected investment volume for the year. The company now anticipates adjusted FFO per share of $4.15-$4.21 and investment volume of ~$3.0B, driven by an improving investment environment, particularly in Europe.
Norwegian gas exports are expected to resume by Friday following an outage that caused a spike in natural gas prices. The outage was due to a crack in a pipeline on Equinor's (EQNR) Sleipner Riser platform. Norway has become Europe's largest gas supplier, making any disruptions significant for the market.
A selection of Tuesday's biggest stock movers includes GameStop (GME), which continued its upward trend following a Reddit post from Keith Gill, and HealthEquity (HQY), which gained nearly 6% after exceeding Q1 expectations. Axos Financial (AX) dropped 12% after a short report from Hindenburg Research.
Omega Healthcare Investors (OHI) remained a top pick for Mizuho Americas despite one of its top tenants filing for bankruptcy. The REIT expects near-term pressure but sees potential positive outcomes and higher near-term cash flow.
Microsoft (MSFT) and Hitachi (HTHIY) entered a strategic collaboration to accelerate generative AI services. The partnership will enhance Hitachi's Lumada business and improve productivity for its 270,000 employees by integrating Microsoft cloud services and AI tools.
TeraWulf (WULF) reported mining 186 bitcoins in May, the first full month after the April Halving event. The company's installed and operational self-mining capacity reached ~8.0 EH/s, with a power cost per self-mined bitcoin of $31,239.
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