Stock futures were mixed Thursday after President Donald Trump and Chinese leader Xi Jinping discussed trade issues and investors digested a warning from Federal Reserve Chair Jerome Powell and several big tech earnings reports, with more set to be delivered after the bell.
Futures associated with the blue-chip Dow Jones Industrial Average were down 0.3%, while the benchmark S&P 500 and tech-heavy Nasdaq were both up less than 0.1%.
Yesterday, all three indexes set fresh intraday highs soon after markets opened, but only the Nasdaq finished higher after Powell said an additional interest-rate cut in December “is not a foregone conclusion—far from it” after the central bank trimmed its key rate by a quarter point.
After meeting with Xi in Busan, South Korea, earlier Thursday, Trump said the U.S. would lower tariffs on Chinese goods by 10% in exchange for China taking “very strong action” on chemicals used to produce fentanyl. China also agreed to ease restrictions on rare-earths exports and purchase “tremendous amounts” of U.S.-produced soybeans, Trump said.
After the bell yesterday, tech giants Microsoft (MSFT), Meta Platforms (META), and Google parent Alphabet (GOOGL) reported quarterly results. Shares of Alphabet are jumping 8.5% in premarket trading after it surpassed $100 billion in quarterly revenue for the first time, but those of Meta and Microsoft were down roughly 9.5% and 2.5%, respectively.
Two additional Magnificent Seven members, Apple (AAPL) and Amazon (AMZN), will be reporting results after markets close today. Shares of Apple were up 0.8% and those of Amazon down 0.8% before the bell.
Shares of Nvidia (NVDA), which Wednesday became the first company to be worth $5 trillion, were down 0.8% in premarket trading.
Elsewhere, Chipotle Mexican Grill (CMG) shares sank 18% after it cut its comparable-restaurant sales outlook as it said customers are making fewer visits, and Sprouts Farmers Market (SFM) stock plummeted 22% after the company issued a weak outlook following soft same-store sales.
Eli Lilly (LLY) stock surged 4% after the maker of popular weight-loss drugs Zepbound and Mounjaro lifted its full-year outlook following stronger-than-expected third-quarter results. Align Technology (ALGN) stock popped 13% after the company reported better-than-expected results, while shares of ServiceNow (NOW) advanced 3.5% after the enterprise software firm’s results topped estimates and its board authorized a 5-for-1 stock split.
The 10-year Treasury yield rose to 4.10%, while the U.S. dollar index, which tracks the value of the greenback against a basket of foreign currencies, ticked higher to 99.34. Bitcoin was trading around $109,400, near the day’s low. Gold futures were below $4,000 an ounce, while West Texas Intermediate crude oil futures were down 0.6% at around $60.10 a barrel.
Eli Lilly Stock Surges as Drugmaker Lifts Outlook Following Robust Mounjaro, Zepbound Sales
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Strong sales of Eli Lilly’s blockbuster weight-loss treatments Mounjaro and Zepbound are powering its shares Thursday morning.
Eli Lilly (LLY) stock surged 4% in premarket trading after the maker of diabetes treatment Mounjaro and obesity drug Zepbound lifted its full-year outlook following stronger-than-expected third-quarter results.
The Indianapolis-based firm reported adjusted earnings of $7.02 per share on revenue that soared 54% year-over-year to $17.60 billion. Analysts surveyed by Visible Alpha had expected $5.91 and $16.06 billion, respectively.
Mounjaro sales more than doubled to $6.52 billion, topping projections of $5.41 billion. Sales of Zepbound skyrocketed nearly tripled to $3.59 billion, while analysts had estimated $3.37 billion.
As a result, Lilly raised its full-year revenue guidance to a range of $63.0 billion to $63.5 billion from the prior $60 billion to $62 billion, and its adjusted EPS outlook to $23.00 to $23.70 from $21.75 to $23.00.
Eli Lilly shares entered Thursday up just 5% year-to-date, trailing the benchmark S&P 500’s 17% advance.
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Chipotle Stock Sinks on Comparable-Restaurant Sales Outlook Cut as Young Customers Visit Less Often
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Young customers are making fewer visits to Chipotle.
Shares of Chipotle Mexican Grill (CMG) sank 17% in premarket trading Thursday, a day after the fast-casual chain cut its comparable-restaurant sales outlook as it said inflation is taking a toll.
The Newport Beach, Calif.-based company reported third-quarter revenue of $3.00 billion, up 7.5% year-over-year but below the $3.06 billion consensus estimate of analysts polled by Visible Alpha. Adjusted earnings of $0.29 per share matched expectations.
Chipotle now sees full-year comparable-restaurant sales down “in the low-single-digit range” versus its July forecast of “about flat” comparable sales. “We continue to see persistent macroeconomic pressures,” CEO Scott Boatwright said in the earnings release.
On a later call with analysts Wednesday, Boatwright said that Chipotle is seeing a “significant pullback” from customers 25 to 34 years old who make less than $100,000 a year. “We’re losing them to grocery and food at home,” he said. “And so, that consumer is under pressure. It is one of our core consumer cohorts. And so, they feel the pinch and we feel the pullback from them as well.”
Chipotle shares entered Thursday having lost about a third of their value this year.
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How the Federal Reserve Could Inflate or Pop an AI Bubble
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Concerns about an AI bubble have some on Wall Street warily eyeing Silicon Valley, but others say they’re looking in the wrong direction. Washington, D.C.—specifically the Eccles Building, where the Federal Open Market Committee sets monetary policy—is where the fate of an AI bubble may be decided, they say.
“I think you’re going to have a very hard time popping a bubble when the Fed is cutting rates,” said Jeff deGraaf, Chair and Head of Technical Research at Renaissance Macro Research, on a recent episode of the firm’s weekly Youtube series. The Dotcom bubble, the U.S. housing bubble, and the Japanese bubble of the late 1980s all popped either while or shortly after central banks hiked rates, according to deGraaf.
Al Drago / Bloomberg via Getty Images
Artificial intelligence has propelled stocks to record highs this year, but recent developments have raised some red flags. A series of circular deals by the likes of AI bellwethers Nvidia (NVDA) and OpenAI have drawn comparisons to the vendor financing agreements that fueled bubbles in the 1990s. The Magnificent Seven account for 35% of the S&P 500, evidence of an increasingly concentrated stock market. And the benchmark index’s price-to-earnings ratio isn’t far off the Dotcom Bubble’s peak.
“I think it’s early,” DeGraaf said of a potential AI bubble, evidence of which he argued doesn’t appear to be “rampant” yet. Though, he warned, “you could have [a] world play out where the economy softens, the Fed is forced to get more aggressive, and the market absolutely goes into the stratosphere because they’re looking at the liquidity. And I think that’s a big disconnect that people don’t appreciate.”
Read the full article here.
Stock Futures Point Lower After Trump-Xi Meeting, Powell Warning, Big Tech Results
1 hr 12 min ago
Futures tied to the Dow Jones Industrial Average were down 0.3%.
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S&P 500 futures were 0.1% lower.
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Nasdaq 100 futures also were down 0.1%.
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