5 Things to Know Before the Stock Market Opens

Metals prices are soaring, with gold and copper hitting records and silver breaching multi-year highs; U.S. stock futures are rising after the Dow closed over the 40,000 threshold Friday; Palo Alto Networks (PANW) is expected to post gains in fiscal third-quarter results after the closing bell; Li Auto (LI) shares are slumping in premarket trading after the Chinese electric vehicle manufacturer posted a 36% drop in first-quarter profit; and Johnson Controls (JCI) is on the rise on a report that Elliott Investment Management has taken a stake in the company. Here’s what investors need to know today.

1. Silver, Gold, Copper Surge as Investors Pile Into Safe Havens 

Metals prices are soaring as investors pile into safe-haven commodities following the death of Iranian President Ebrahim Raisi in a helicopter crash. Gold is surging beyond its April record, while silver also is gaining after it climbed to an 11-year high above the closely watched psychological $30 mark. Copper, meanwhile, continues to rise after hitting record highs last week. Also boosting the metals is the softness in the U.S. dollar, which makes these dollar-denominated metals cheaper for foreign buyers, as well as their utilities in industrial applications. Silver is highly conductive, for instance, which gives it many industrial uses, while gold’s durability also has utility in areas like dentistry. Copper, meanwhile, has gained from rising demand for artificial intelligence (AI), which feeds on power from increasingly large data centers that commonly use copper wiring.

2. US Stock Futures Gain, Dow Set to Rise After Closing Above 40,000

U.S. stock futures are rising in premarket trading, with the Dow—which notched its first close in history above 40,000 points on Friday—set for more gains as investors increasingly expect the Federal Reserve to cut interest rates. Recent data has shown that inflation is cooling, which may prompt sooner-rather-than later policy easing by the Fed, which has said it wants to see price pressures decrease before lowering interest rates. Remarks due by Atlanta Fed President Raphael Bostic and Fed Vice Chair Michael S. Barr today could offer insights into how officials are looking at inflation.

3. Palo Alto Expected to Post Strong Results—Customer Spending in Focus

Palo Alto Networks (PANW) is expected to post year-over-year gains in fiscal third-quarter results after the closing bell today, although investors’ sights will be on its sales after the cybersecurity company earlier lowered its outlook amid consumer “spending fatigue.”  The cybersecurity company could also provide updates on its “platformization” strategy in its efforts to become a “one-stop shop” for cybersecurity. Analysts project Palo Alto Networks’ third-quarter revenue to rise to $1.97 billion from $1.72 billion in the same period in 2023, and diluted earnings per share (EPS) of 40 cents, up from 31 cents last year.

4. Chinese EV Maker Li Auto Posts Q1 Profit Slump as It Lowered Car Prices 

American depositary receipts (ADRs) of Li Auto (LI) are down more than 4% in premarket trading after the Chinese EV manufacturer posted a 36% year-over-year drop in first-quarter net income as it lowered car prices. The company said its profit attributed to shareholders was 592.6 million yuan ($82.0 million), versus CNY929.7 million in the same period last year, and well below analysts’ forecasts of CNY1.63 billion. Revenue was up, however, by 36% at CNY25.63 billion, including a 32% jump in vehicle sales to CNY24.3 billion. “The increase in revenue from vehicle sales over the first quarter of 2023 was mainly attributable to the increase in vehicle deliveries, partially offset by the lower average selling price due to different product mix and pricing strategy changes between two quarters,” Li Auto said.

5. Johnson Controls Shares Gain as Elliott Reportedly Builds Up Stake

Shares in Johnson Controls International (JCI) rose 5% in premarket trading after Bloomberg reported late Sunday that activist investor Elliott Investment Management has taken a significant stake in the industrial conglomerate. The New York-based hedge fund has built a position in the company valued at over $1 billion, though the intentions for taking the stake couldn’t be immediately learned, the report said. Elliott’s investment in Johnson Controls comes several months after reports surfaced that the industrial conglomerate was considering divesting several non-core businesses.