U.S. Stock Index Futures Rise Amid Tech Earnings Caution
U.S. stock index futures edged higher Tuesday, as investors exercised caution ahead of earnings releases from major technology companies later in the week. At 06:25 ET (10:25 GMT), Dow Jones Futures rose 68 points, S&P 500 Futures gained 11 points, and Nasdaq 100 Futures rose 48 points.
Wall Street Rebounds Led by Tech Sector
Wall Street rebounded on Monday following two weeks of steep losses, with the tech sector leading the charge. The S&P 500 rose 0.9%, while the NASDAQ Composite surged 1.1%, both ending six-day losing streaks. The Dow Jones Industrial Average also climbed over 250 points.
Tech Giants’ Earnings Awaited
Tech giants such as NVIDIA, Meta Platforms, Microsoft, and Alphabet recorded gains ahead of their earnings reports. Tesla, set to report earnings after the bell, faced expectations of a challenging quarter after a drop in deliveries and price cuts on its cars.
Economic Data and Corporate Earnings in Focus
Beyond tech, earnings from Visa, PepsiCo, General Motors, and Danaher were scheduled for Tuesday. Novartis stock rose premarket after better-than-expected first-quarter results. Investors are also awaiting PCE inflation and Q1 GDP data later in the week.
Crude Prices Stabilize Amid Middle East Tensions
Crude prices traded largely unchanged on Tuesday, stabilizing after recent losses amid uncertainty in the Middle East. U.S. crude futures traded at $81.84 a barrel, while the Brent contract traded at $87.00 per barrel. Concerns over a full-scale war between Iran and Israel have eased, impacting oil price movements.
$AMZN- BMO Capital raised the firm’s price target on Amazon.com to $215 from $205 and keeps an Outperform rating on the shares. The firm is boosting its expected 2024 AWS revenue growth outlook to 15% from 14%, with upside potential remaining from gen-AI workloads and IT spend migration, the analyst tells investors in a research note. The Rufus integration in Retail is also underappreciated and positions Retail for double-digit gross merchandise value growth and a meaningful free cash flow unlock, BMO added.
$GE- Says all segments contributed to growth in Q1. Says “great confidence” in forward trajectory. Says demand “remained resilient” in Q1. Says can track about 80% of delivery challenges to 15 suppliers. Comments taken from Q1 earnings conference call.
$AAPL- Barclays sees Apple reporting an in-line March quarter and expects its June quarter guide will miss Street estimates due to softening hardware demand, which would continue a multi-quarter trend. The firm continues to hear of lower iPhone15 builds and an “evolutionary” iPhone 16 cycle with “very limited” artificial intelligence content. Barclays’ latest checks indicate iPhone 15 sell-through in China continues to show double-digit declines on a year-over-year basis over the last few weeks, after being down 20% in Q1, with a higher mix of the base models, leading to negative mix shift and margin headwinds, with likely selling price declines on a year-over-year basis, the analyst tells investors in a research note. The firm keeps an Underweight rating on Apple with a $158 price target.
$MSFT- Microsoft introduced three smaller A.I. models that are part of a technology family called Phi-3, Karen Weise and Cade Metz of The New York Times reports. The company said even the smallest of the three performed almost as well as GPT-3.5 and can fit on a smartphone, allowing it to be used even without internet. The smaller models require less processing which allows providers to charge customers less to use them, which Microsoft hopes will lead to more customers applying the technology in places where larger models were too expensive.
$DIS- Wells Fargo raised the firm’s price target on Disney to $141 from $128 and keeps an Overweight rating on the shares. With the proxy fight over, the firm thinks Disney management will focus on execution, including direct-to-consumer margins and transitioning Sports. Parks are humming, while creative and succession are the big To Dos, Wells adds.
Cathie Wood’s ARK Investment buys 123K shares of TSLA yesterday.
Piper Sandler notes Tesla announced another round of price cuts over the weekend, impacting “essentially all models, in all global regions” and says these cuts are “a clear indicator that Tesla’s production capacity has outstripped demand.” In the firm’s view, a coincident price cut on full self-driving software from $12,000 to $8,000 is “even more material to Tesla’s earnings potential,” the analyst tells investors. Tesla reports earnings tomorrow afternoon, “so for now, we’ll refrain from updating our model to reflect the price cuts,” added the firm, which has an Overweight rating and $205 price target on Tesla shares.
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