These are the early headlines and other items poised to influence the market at the start of trading Thursday. As we share this collection of market drivers, U.S. equity futures point to a modest decline when the market opens. However, that could change subject to this morning’s April PCE Price Index data out at 8:30 AM ET.
1. The US struck Iranian military targets for the second time this week and Kuwait said it responded to missile and drone threats, highlighting the fragility of the ceasefire and the challenge of forging a peace accord that would restore global energy flows… Brent crude oil rose as much as 4% to $98.20 a barrel on Thursday. While prices have retreated from as much as $126 last month, they’re still about a third higher than before the war began. (Bloomberg) Commercial shipping through the Strait of Hormuz dwindled to only a few mostly Iran-linked vessels crossing on Wednesday, underscoring the stop-start nature of traffic through the world’s most vital energy chokepoint. (Bloomberg)
Whether this is some late-in-the-game saber rattling to push further compromise on peace talks or the precursor to them falling apart is to be determined. It does suggest those peace talks are fragile as President Trump reiterated he does not want the Strait of Hormuz under Iran’s control and poured cold water on the prospect of Iran transferring its store of highly enriched uranium to Russia or China as part of any deal to end the war with the U.S. As we keep one eye on this front, we are reading reports the Pentagon is putting building blocks in place for a potential invasion of Cuba.
2. Economists expect the latest data will show the Federal Reserve’s official inflation gauge rose in April for the third month in a row, hitting yet another three-year high. The personal consumption expenditures price index isn’t expected to show the major jumps that other price measures, such as the consumer price index, registered in April. But it is expected to deliver strong enough inflation growth to keep the heat on policymakers. (Barron’s)
At 8:30 AM ET, we’ll get one of the final pieces of April inflation data and it’s the one widely cited as the Fed’s favorite. Leading up to the PCE price index figure for April, the inflation data received so far, be it the CPI, PPI or even the Price index data in ISM’s April PMI reports, all pointed to a sharp step up in inflation pressures. So too did the Flash May PMI report from S&P Global, and that has made inflation a focal point for Fed members. Yesterday, Minneapolis Federal Reserve President Neel Kashkari said that bringing down inflation in the U.S. remains his top priority. In his words:
“I am focusing heavily on inflation. I’m not ignoring at all the labor market. We need to pay attention to both sides, but the labor market is in decent shape right now, while inflation is simply much too high.”
The consensus forecast for April headline PCE price index is 3.8%, up from March’s 3.5%, while the core reading is expected to tick up to 3.3% from March’s 3.2%.
3. The data-center boom is still going strong for Marvell Technology. The chip company reported better-than-expected first-quarter revenue and sees higher revenue than expected in the current quarter. “We expect revenue growth to continue accelerating each quarter throughout fiscal 2027, driven by continued strength in our data center business,” CEO Matt Murphy said. For the second quarter, Marvell said it expects adjusted earnings to be between 88 cents per share to 98 cents per share, compared with analyst estimates of 90 cents per share. Revenue for the quarter should be between $2.57 billion and $2.84 billion, the company said, compared with analyst expectations of $2.6 billion. (Barron’s)
Going into that report, our view was that Marvell (MRVL) would need to knock its guidance out of the park following the more than 160% rocket ship ride in its shares over the last several weeks. Arguably, the guidance served up for the current quarter wasn’t that, and that explains why the shares are trading off this morning.
However, to focus on that would miss the forest for the trees, as they say, because what management communicated during the earnings call last night points to the demand ramp for its AI, data center, networking, and custom AI silicon businesses continuing in a big way:
“… we now expect overall Marvell revenue in fiscal 2027 to grow approximately 40% year-over-year to nearly $11.5 billion. The increase in our revenue outlook continues to be driven by our data center business, which we now expect to grow approximately 50% this fiscal year. Notably, we expect our interconnect business to grow more than 70% year-over-year, well above our prior expectation of 50% growth… we expect data center revenue in fiscal 2028 to grow approximately 55% year-over-year, accelerating from fiscal 2027’s projected growth rate. For our communications end market, we continue to expect low single-digit percentage revenue growth in fiscal 2028 consistent with our prior view. In aggregate, we now expect overall company revenue to grow approximately 45% in fiscal 2028, off a higher fiscal 2027 base… As a result, we now expect Marvell’s fiscal 2028 revenue to reach approximately $16.5 billion, roughly $1.5 billion higher than the outlook we provided on our earnings call last quarter.“
What the company didn’t specifically call out is how its fiscal 2028 guidance equates to double the revenue Marvell posted in fiscal 2026. And yes, the revenue guidance served for fiscal 2027 and 2028 are well above what the market was looking for.
We’ll have more to say in a stand-alone note to Pro members later this morning.
4. Salesforce Inc. gave a revenue outlook for the current period that fell just short of analysts’ estimates, unnerving investors already concerned about the possibility that artificial intelligence will disrupt the software business. Revenue will be about $11.3 billion in the fiscal second quarter, which ends in July, Salesforce said Wednesday in a statement. Analysts, on average, projected $11.4 billion. The company also reported fiscal first-quarter remaining performance obligations — a measure of future sales — were $67.9 billion, compared with analysts’ average estimate of $68.9 billion. (Bloomberg)
That remaining performance obligation (RPO) figure of $67.9 billion for Salesforce (CRM) not only missed market expectations but it was also down from $72.4 billion at the end of January. That wasn’t the only figure moving in the wrong direction for Salesforce, as it’s Subscription & Support revenue declined to $10.6 billion in the April quarter vs. $10.7 billion for the January one. While management may be “confident on the reacceleration” for that business, those figures are not going to instill confidence given growing investor concerns about moves by OpenAI, Anthropic and others to expand AI adoption in the enterprise.
5. Shares of Snowflake were flying toward their highest level ever in after-hours trading Wednesday, after the cloud software company beat fiscal first-quarter earnings expectations by a wide margin, and raised its full-year outlook. As use of artificial intelligence by companies accelerates, demand for the company’s core data-platform business continues to grow, Snowflake Chief Financial Officer Brian Robins said. During the latest quarter, 46 customers crossed the threshold of spending more than $1 million on a trailing 12-month basis, Robins said, which compares with 26 customers a year ago… (MarketWatch)
As impressive as those results were, the item that is popping Snowflake (SNOW) shares this morning is the $6 billion commitment to expand its collaboration with Amazon’s (AMZN) AWS cloud business. To give some context, that multi-year agreement compares to the $1.4 billion Snowflake estimates it will deliver in revenue for the current quarter. That news, along with ~19.5 million shares short heading into last night’s earnings report and subsequent short squeeze, is sending SNOW shares soaring.
6. The Trump administration is pursuing funding deals with a group of drone companies as part of its effort to increase domestic production and lower the costs of the increasingly vital weapons, people familiar with the matter said. The potential deals follow months of discussions between a diverse set of private-sector drone companies and the Pentagon, the people said. The discussions have included the Office of Strategic Capital, a lending office set up by the Biden administration to fund companies deemed important to national security supply chains. (WSJ)
This builds on the Defense Department’s request for more than $54 billion for its Defense Autonomous Warfare Group (DAWG), up considerably from ~$225 million this year. While the Pro Portfolio has drone exposure through Axon (AXON), should we see these funding deals move forward and even a sizable step up in Defense Department spending, we may need to consider other options like the Defiance Drone & Modern Warfare ETF (JEDI).
7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), GDP – (Q1 2026, Second Estimate), GDP Price Index ( Q1 2026, Second Estimate), Personal Income & Spending (April), PCE Price Index (April), Durable Goods Orders (April), New Home Sales (April), EIA Natural Gas Inventories (Weekly).
8. Companies reporting today per TipRanks: AM- Burlington Stores (BURL), Dollar Tree (DLTR), Hormel Foods (HRL), Kohl’s (KSS). PM – American Eagle (AEO), Autodesk (ADSK), Costco (COST), Dell (DELL), Elastic (ESTC), Gap (GAP), NetApp (NTAP), Okta (OKTA), SentinelOne (S).
More Pro Portfolio:
- We’re Adding to and Lifting Our Rating on This Holding
- We’re Tracking 29 Signals Across 9 Portfolio’s Investment Themes
- Weekly Roundup: Profiting From the Rally, But Not Letting Our Guard Down
At the time of publication, TheStreet Pro Portfolio was long AMZN, AXON, COST, and MRVL shares.
