5 Things to Know Before the Stock Market Opens

Shares of Magnificent Seven member Meta Platforms (META) are soaring in premarket trading after a second-quarter earnings beat and signs that its hefty artificial intelligence (AI) spending are paying off—in stark contrast to how investors punished Microsoft  (MSFT), Google parent Alphabet (GOOGL) and Tesla (TSLA) after results disappointed; Apple’s (AAPL) China sales and AI plans will be in focus when it reports after the bell, while Amazon’s (AMZN) efficiency drive in its delivery network, ad sales, and its cloud platform are expected to lift its quarterly earnings; Arm Holdings (ARM) shares are tumbling as the chip designer’s lukewarm guidance offset its earnings beat; and the Bank of England cut interest rates for the first time in over four years. U.S. stock futures are edging up after shares closed sharply higher yesterday on a rebound in chips stocks and comments from Federal Reserve chair Jerome Powell that opened the door for an interest-rate cut in September. Here’s what investors need to know today.

1. Facebook Parent Meta Platforms Soars on Earnings Beat

Shares of Meta Platforms (META) are jumping 8% in premarket trading  after the social media giant’s second-quarter earnings and sales topped Wall Street estimates, giving investors confidence that the company’s significant investment in artificial intelligence (AI) infrastructure is paying off. The tech behemoth’s stock price has had a volatile year, with shares surging more than 20% after the Facebook parent issued its first dividend in February, then slumping on light guidance following Q1 earnings in April. CEO Mark Zuckerberg said Meta AI, which rivals offerings from Microsoft-backed OpenAI and Google, is “on track to achieve our goal of becoming the most used AI assistant by the end of the year.”

2. Apple’s AI Updates, China Sales Eyed for Q3 Results

Apple (AAPL) is set to report fiscal third-quarter earnings after the bell, with investors likely watching for an update to the tech giant’s China sales and AI plans. Worries surrounding slowing sales in China have weighed on its shares, but analysts said the third quarter could mark the end of the decline as pricing discounts drive higher iPhone shipments in the country. Apple is also expected to release its iPhone 16 in September but won’t include many AI features. The company released a beta version of its new iOS 18.1 to developers on Monday and offered investors a a first look at Apple Intelligence, its AI system, and new AI features for the device. Apple shares are rising about 1% in premarket trading.

3. Amazon Seen Reporting Q2 Profit Jump on Cost Cuts, Ads, AWS

Amazon (AMZN) reports second-quarter earnings after the bell, with cost cuts that have made its delivery network more efficient seen boosting results. Analysts expect total revenue to rise about 11% year-over-year to $148.68 billion and net income to jump 65% to $11.13 billion. Advertising and its cloud platform, AWS, are expected to be sources of growth for the tech and retail giant, which may also provide updates on how its Prime Day sales event last month impacted its third-quarter outlook. Amazon shares are trading about 2% higher in premarket trading. 

4. Arm Slumps on Tepid Outlook

Arm Holdings (ARM) American depositary receipts (ADRs) are tumbling 9% in premarket trading as the chip designer’s lukewarm guidance offset first-quarter earnings that were higher than analysts expected. Arm projected adjusted earnings per share (EPS) between 23 cents and 27 cents for the current quarter, leaving unchanged its full-year revenue and adjusted EPS guidance. Still, since going public on Sept. 14 last year, Arm shares have more than doubled through Wednesday’s close.

5. BOE Cuts Interest Rate for First Time in Four Years

The Bank of England made its first cut to its benchmark interest rate in four years, marking a contrast with the Federal Reserve, which stood pat after its meeting yesterday and kept interest rates at 23-year highs. In In a 5-4 vote, the U.K. central bank cut its Bank Rate to 5% from 5.25%, noting that the 12-month CPI inflation was at officials’ 2% target for both May and June.

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