U.S. stock index futures pared some declines on Friday after a cooler-than-expected inflation reading calmed some investor concerns over fewer rate cuts next year.
A Commerce Department report showed the Personal Consumption Expenditure (PCE) index, the Fed's preferred inflation measure, rose 2.4% in November on an annual basis, compared with estimates of 2.5%, as per economists polled by Reuters. On a monthly basis, it rose 0.1%.
Market Snapshot
At 8:37 a.m. ET, Dow e-minis were down 127 points, or 0.3%, S&P 500 E-minis were down 31.5 points, or 0.53%, and Nasdaq 100 E-minis were down 194.5 points, or 0.91%.
Pre-Market Movers
Tesla - Tesla was down 2.3% after falling 0.9% on Thursday. Pressuring the stock in the previous session was an idea proposed by Sen. Rand Paul, a Kentucky Republican, that Elon Musk, chief executive of the electric-vehicle maker, be namedspeaker of the House of Representatives. Tesla didn’t respond to requests for comment from Barron’s about Paul’s idea.
Nvidia - Nvidia stock was falling 1.1% ahead of Friday’s opening bell, putting the chip maker on course to extend its Santa slump. It’s been a rough end to the year for Nvidia. While the semiconductor designer’s stock jumped 200% between Jan. 1 and Dec. 4 as the company cemented its status as the market’s AI darling, shares are down about 10% since then.
Crypto Stocks - Crypto stocks dropped in premarket trading as Bitcoin dropped below $93,000. SOS Limited, Canaan, and The9 fell 4%; Bit Digital, Bitcoin Depot, and BIT Mining fell 3%; MARA Holdings, Bakkt Holdings, and Coinbase fell 2%; Hut 8, MicroStrategy, Bitfarms, and Riot Platforms fell 1%.
Quantum Stocks - Quantum stocks sank again in premarket trading Friday. Quantum Computing fell 17%; Quantum Corp fell 16%; Arqit Quantum fell 14%; D-Wave Systems fell 12%; Rigetti Computing fell 8%; IONQ Inc. fell 5%; Alphabet fell 2%.
Novo Nordisk, Eli Lilly - U.S.-listed shares of Novo Nordisk dropped 20% after a late-stage trial of the company’s CagriSema obesity drughelped patients lose an average of 22.7% of their body weight, less than the company’s expectations of 25%. Shares of rival weight-loss drug maker Eli Lilly were up 6.5%.
Micron Technology - Micron Technology ended Thursday’s session down 16% and was falling a further 3% in premarket trading after the largest U.S. maker of memory chips issued aweak outlookfor its fiscal second quarter.
FedEx - FedEx was rising 7.7% after the shipping and logistics giant said it wouldspin off its freight trucking businessand reported fiscal second-quarter adjusted earnings of $4.05 a share that topped analysts’ forecasts. FedEx said its goal was to complete the separation of the freight business, the largest less-than-truckload operator in the U.S., within 18 months. The company did, however, cut fiscal-year guidance, saying it expects earnings of $19 to $20 a share, down from prior guidance of $20 to $21 a share, and revenue roughly flat with a year earlier compared with a previous forecast of a low single-digit percentage increase.
Nike - Fiscal second-quarter earnings and revenue at Nike topped Wall Street expectations but shares fell 7% after the sportswear company said it expects third-quarter revenue to fall by low double-digits—worse than analysts’ estimates that called for a 7.7% decrease. Nike also said gross margins will be down about 3 to 3.5 percentage points in the period under its restructuring plan. “We’re taking the long-term view here,” said CEO Elliott Hill, the company veteran who started as chief in mid-October.. “We’re making the decisions that are best for the health of our brand and business, decisions that will drive shareholder value.”
U.S. Steel - U.S. Steel declined 6.3% after saying it expects a fourth-quarter adjusted loss of between 25 cents and 29 cents a share, well below analysts’ expectations that called for a profit of 22 cents. The steel company also reduced its outlook for adjusted earnings before interest, taxes, depreciation, and amortization to $150 million, down from $225 million to $275 million. “Steel prices remained depressed,” said Chief Executive David B. Burritt in a statement.
BlackBerry - BlackBerry reported third-quarter adjusted profit of 2 cents a share, better than Wall Street estimates that called for an adjusted loss of 1 cent, but reduced its fiscal-year outlook ahead of closing the sale of its Cylance endpoint security assets. The stock was up 1.3%.
Mission Produce - Mission Produce, the avocado farming company, posted fiscal fourth-quarter adjusted earnings of 28 cents a share, beating analysts’ estimates, as revenue jumped 37% from a year earlier. For the fiscal first quarter of 2025, the company said it expects industry volumes to be consistent with the prior-year period, while pricing will be about 20% higher. The stock was up 9.7%.
Occidental, Sirius XM - Occidental Petroleum rose 2.1% and Sirius XM gained 2.7% following disclosures that Warren Buffett’s Berkshire Hathaway purchased shares in the companies in recent days. Berkshire’s largest purchase was about $405 million of Occidental Petroleum. The purchase of around 8.9 million shares raised Berkshire’s stake in the energy company to 264.2 million shares, roughly a 28.1% stake.
Market News
Trump-Backed GOP Funding Plan Fails in House as Shutdown Nears
The Republican-led House rejected a temporary funding plan backed by President-elect Donald Trump on Thursday with just over 24 hours to go before a US government shutdown, capping an extraordinary two days in Washington that tested the limits of the incoming president’s power.
Trump and key adviser Elon Musk had pressured GOP lawmakers, including threats to oppose them in the next election, to abandon an earlier bipartisan deal. Trump insisted Republican leaders add a provision waiving or raising the federal debt limit before he takes office.
But the bill failed by a vote of 235 to 174, with 38 Republicans voting against it in defiance of both the president-elect and the richest man in the world. Nearly all Democrats voted against the spending package, which would have also suspended the debt ceiling for two years.
Google Releases Its Own "Reasoning" AI Model
Google has released what it’s calling a new “reasoning” AI model — but it’s in the experimental stages, and from our brief testing, there’s certainly room for improvement.
The new model, called Gemini 2.0 Flash Thinking Experimental (a mouthful, to be sure), is available in AI Studio, Google’s AI prototyping platform. A model card describes it as “best for multimodal understanding, reasoning, and coding,” with the ability to “reason over the most complex problems” in fields such as programming, math, and physics.
In a post on X, Logan Kilpatrick, who leads product for AI Studio, called Gemini 2.0 Flash Thinking Experimental “the first step in [Google’s] reasoning journey.” Jeff Dean, chief scientist for Google DeepMind, Google’s AI research division, said in his own post that Gemini 2.0 Flash Thinking Experimental is “trained to use thoughts to strengthen its reasoning.”