U.S. stock index futures fell on Friday after Federal Reserve Chair Jerome Powell said there was no need to rush interest-rate cuts, pushing up bond yields and pressuring rate-sensitive equities.
In a speech on Thursday, Powell pointed to ongoing economic growth, a solid job market, and inflation above the Fed's 2% target as reasons the central bank can afford to be careful as they determine the pace and scope of rate cuts going forward.
Market Snapshot
At 8:10 a.m. ET, Futures tied to the Dow Jones Industrial Average lost 154 points, or 0.4%. S&P 500 futures slipped about 0.5%, while Nasdaq 100 futures shed 0.8%.
Pre-Market Movers
Applied Materials reported fiscal fourth-quarter earnings that beat analysts' estimates but shares fell 8% after the chip-equipment maker issued a disappointing outlook. Applied Materials said it anticipates fiscal first-quarter adjusted earnings of $2.29 a share, plus or minus 18 cents, on revenue of $7.15 billion, plus or minus $400 million. Wall Street was expecting adjusted earnings of $2.27 a share on revenue of $7.24 billion.
Shares of vaccine makers such as Pfizer and Moderna, Inc. declined after President-elect Donald Trump announced he was nominating Robert F. Kennedy Jr., a vaccine skeptic and harsh critic of federal health agencies, to lead the U.S. Department of Health and Human Services. Pfizer fell 0.8%, Moderna dropped 2.2%, BioNTech SE was down 2.5% in U.S. trading, and Novavax slid 1.7%. The prospect of Kennedy leading HHS or a similar agency has raised major questions about the future of the health system.
Tesla Motors was up 0.3% after falling 5.8% on Thursday following a report from Reuters that said Trump likely would eliminate $7,500 purchase tax credits for electric vehicles. Analysts generally see the credit rollback as neutral for Tesla since it has the scale and cost structure to be profitable without the credits. An elimination of the credits, however, was being perceived as a negative for the rest of the industry. Rivian Automotive was down 0.9% in premarket trading after tumbling 14% on Thursday.
Palantir Technologies Inc. was rising 3% after saying it planned to transfer its listing to the Nasdaq from the New York Stock Exchange on Nov. 26. Upon transferring, Palantir said it anticipates meeting the eligibility requirements of the Nasdaq-100 Index, which includes the largest non-financial companies listed on the exchange.
AST SpaceMobile, Inc., the space-based broadband company, reported a third-quarter loss of $1.10 a share, well wider than a loss of 23 cents a share a year earlier and analysts' estimates that called for a loss of 20 cents. Revenue of $1.1 million also missed forecasts of $1.8 million. The stock declined 9%.
Domino's Pizza rose 6% after Berkshire Hathaway bought 1.3 million shares of the pizza chain that were worth about $550 million on Sept. 30, according to a quarterly 13-F filing with the Securities and Exchange Commission. Warren Buffett's company also initiated a holding in Pool, buying 404,000 shares that were worth $152 million on Sept. 30. Pool shares jumped 6%. ulta beauty fell 5% after Berkshire Hathaway sold nearly all its position in the beauty products retailer.
Market News
Alibaba Rallies After Its AI Business Provides an Earnings Lift
Alibaba reported revenue rose 2% year-over-year to $33.71 billion. Overall revenue excluding Alibaba-consolidated subsidiaries grew over 7% year-over-year for the quarter that ended on September 30, driven by double-digit public cloud growth, including increasing adoption of AI-related products.
The Hangzhou-based company pointed to improving monetization of Taobao and Tmall Group as a positive factor during the quarter. The Cloud Intelligence segment, which includes the AI business, outperformed the company's overall growth rate during the quarter.
Nvidia Discloses New Stake in Applied Digital; Maintains Arm Holdings, SoundHound Stakes
AI chip-making powerhouse NVIDIA Corp has disclosed a new investment in digital infrastructure solutions developer, Applied Digital (NASDAQ:APLD).
As of Sept. 30, Nvidia's holdings in APPLIED DIGITAL CORP totaled around 7.72M shares, worth around $63.66M, according to the chip giant’s latest 13F filing. That equates to a roughly 3% stake.
Elsewhere, the chip giant maintained its positions in biotech company Recursion Pharmaceuticals, Inc. (7.71M shares), ARM Holdings Ltd (1.96M shares), SoundHound AI Inc (1.73M shares), Nano-X Imaging Ltd. (59,632 shares) and Serve Robotics Inc. (3.73M shares).
Jack Ma-Backed Ant’s Profit Up 193% in Post-Crackdown Recovery
Ant Group Co.’s profit nearly grew 193% in the June quarter, reversing a year-long decline as the fintech company regained its footing from a government crackdown.
Hangzhou-based Ant contributed nearly 2.48 billion yuan ($343 million) of profit to Alibaba Group Holding Ltd. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 7.5 billion yuan in profit for the three months ended in June, according to Bloomberg calculations based on the listed company’s disclosures.
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