The major U.S. index futures are currently indicating a lower open on Friday, with stocks expected to trend downward following the mixed performance observed in the previous session. Weakness among technology stocks is expected to exert downward pressure on the markets in the early trading session, as evidenced by the 1.3 percent decline in the tech-heavy Nasdaq 100 futures. Concerns regarding the future of the AI sector could be influencing the early decline in technology stocks, following a report indicating that OpenAI is contemplating postponing its IPO until next year. Source reported that the company’s advisers are urging its chief executive, Sam Altman, to adopt a cautious approach following the volatility in SpaceX’s stock and as the start-up faces financial challenges. “The one-way rally that characterised much of April and May has given way to more selective positioning, where company fundamentals, economic data and central-bank expectations are once again driving performance,” stated Daniela Hathorn. She added, “The AI narrative remains the dominant structural theme, but with valuations elevated and the Fed maintaining a cautious stance, investors are becoming increasingly discerning about where they deploy capital.”
U.S. stocks exhibited a varied performance on Thursday, as investors processed a range of significant economic data alongside corporate developments, notably the earnings update from Micron. The focus was also on reports regarding the ongoing peace efforts between the U.S. and Iran. The Dow increased by 71.72 points, representing a 0.1 percent rise, concluding at 51,920.62. In contrast, the Nasdaq experienced a decline of 118.03 points, or 0.5 percent, finishing at 25,358.60. Meanwhile, the S&P 500 saw a slight decrease of 0.73 points, which is less than a tenth of a percent, closing at 7,357.49. Shares of Micron Technology surged 15 percent, driven by stronger-than-anticipated earnings and a positive adjustment in the company’s revenue outlook.
The chipmaker anticipates revenue of $50 billion for the quarter ending in August, significantly surpassing expectations. Another stock to experience a significant increase was Qualcomm, which rose by over 5 percent following a two-fold increase in its projection for non-handset revenue over the next three years. Meanwhile, shares of Amazon, Nvidia, Oracle, Alphabet, and Microsoft experienced a significant decline. Apple experienced a decline of approximately 6 percent. In recent economic developments, the Labour Department reported that the core PCE price index in the U.S., which serves as the Federal Reserve’s favoured measure of underlying inflation, increased by 3.4 percent year-over-year in May. This marks the highest rate since October 2023 and significantly exceeds the Federal Reserve’s target of 2 percent.
Additionally, the Commerce Department reported that new orders for US-manufactured durable goods experienced a decline of 4.5 percent month-over-month, totalling $332 billion in May, following an upwardly revised increase of 8.5 percent in April. The Labour Department reported that seasonally adjusted initial jobless claims stood at 215,000 last week, a decrease from the prior week’s figure of 227,000. Finally, U.S. GDP experienced a growth of 2.1 percent in the first quarter, in contrast to a revised increase of 0.5 percent in the preceding quarter. In the first quarter of this year, GDP experienced a year-on-year increase of 3.6 percent, in contrast to a revised growth rate of 3.7 percent from the previous year.