5 Things to Know Before the Stock Market Opens

US stock futures are rising amid a flurry of earnings reports and following Federal Reserve Chair Jerome Powell’s comments Wednesday that an interest rate hike is unlikely; Apple (AAPL) shares are gaining ahead of the iPhone maker’s quarterly earnings report, as investors await details on China sales and AI initiatives; Novo Nordisk AS (NVO) shares are slipping as Wegovy sales undershot lofty forecasts even as the Danish drugs giant boosted its 2024 guidance; Qualcomm (QCOM) shares are gaining as growing demand for AI-equipped smartphones boosts its outlook; and Carvana (CVNA) shares are skyrocketing as an upbeat outlook signals the used-car retailer’s turnaround is working. Here’s what investors need to know today.

1. US Stock Futures Rise as Rate Hikes Seem Off the Table 

US stock futures are rising as investors digest comments Wednesday from Federal Reserve Chair Jerome Powell, who said the central bank needs more confidence that inflation is tamed before cutting interest rates but also said that a rate hike is unlikely. The Fed’s policy committee decided Wednesday to keep the influential fed funds rate at a 23-year high. The committee said there had been “a lack of further progress” in reaching the Fed’s 2% inflation goal. Powell said the recent hot data showing price pressures remain strong has made him less confident about inflation’s downward trajectory. Still, Powell believes inflation will fall, likely because rent increases have cooled off, say economists, helping to push inflation down in the months ahead.

2. Apple Set to Report, With iPhone Sales, China Results and AI in Focus

Apple (AAPL) shares were up 1% about 90 minutes before the opening bell as investors await the tech giant’s earnings report after the close Thursday. While Apple is expected to post declines in revenue and profit for its fiscal second quarter, investors will be closely watching for details on iPhone sales, the company’s performance in China and artificial intelligence initiatives. Apple’s stock has been under pressure this year amid concerns about weak sales in China as it loses ground to domestic rivals, while the company is seen as being behind in the AI race versus its Big Tech rivals such as Microsoft (MSFT). Analysts project Apple’s revenue to be $90.36 billion for the fiscal second quarter of 2024 and diluted earnings per share of $1.50. Through Wednesday’s close, Apple shares were down 12% this year. 

3. Novo Nordisk Slips as Wegovy Sales Lag Estimates

Novo Nordisk (NVO) shares were slightly lower as sales of Wegovy failed to live up to already lofty expectations even as the pharmaceutical firm raised its full-year profit guidance on buoyant demand for its weight-loss and diabetes drugs. The Danish pharmaceutical giant, which also makes Ozempic, has been struggling to meet surging demand for its weight-loss drugs, and said it continued to suffer “periodic supply constraints.” It recently acquired syringe-maker Catalent and is also spending billions of dollars to expand its manufacturing facilities. Results for the quarter were higher-than-forecast, while Novo Nordisk also said it expects 2024 sales to rise as much as 27%, versus a top-level of 26% previously. During the first quarter, sales at its blockbuster Ozempic diabetes drug rose 42% while sales of Wegovy more than doubled. Novo Nordisk shares are up about 25% this year.

4. Qualcomm Jumps as Surging Demand for AI-Equipped Smartphones Boosts Results

Qualcomm (QCOM) shares rose more than 5% in premarket trading after the mobile-phone chip giant posted strong earnings and a better-than-expected current-quarter outlook amid growing demand for artificial intelligence (AI)-equipped smartphones. While the company said it expects handset revenues to decline in the current quarter due to fewer smartphone launches over the summer months, it said strong demand for “premium tier” devices that require more advanced chips was encouraging. It also said that revenue from Chinese phone manufacturers surged 40% from a year earlier.

5. Carvana Surges as Used-Car Retailer’s Earnings, Outlook Signal Turnaround

Carvana (CVNA) shares soared more than 35% in premarket trading after the online used-car retailer issued upbeat sales guidance for the current quarter and projected gains in a key profit metric, EBITDA—signaling the company’s turnaround efforts are working. First-quarter net income of $49 million also came in better than analysts’ expectations, which called for a $116 million loss. Carvana boomed during the pandemic as more people, stuck at home, bought used cars online, but struggled in the aftermath, although the recent numbers show that its streamlining as well as consumers’ preference for second-hand cars as interest rates stay elevated are benefiting the company.

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