S&P 500 futures are down 20 points, Nasdaq 100 futures are down 122 points, and Dow Jones Industrial Average futures are down 57 points.
Futures for the S&P 500, Nasdaq 100, and Dow are lower, along with Treasury yields. The 10-year note yield is down three basis points to 3.81%, and the 2-year note yield is down four basis points to 3.85%.
The early action is similar to yesterday, with a slide in chip stocks and a drop in market rates due to growth concerns from weak data. Recent economic news shows the final August Services PMI for the eurozone, China's Caixin Services PMI for August, and Japan's Services PMI all missed expectations.
In today's US economic data, the weekly MBA Mortgage Applications Index jumped 1.6% after last week's 0.5% increase. The July Trade Balance will be released at 8:30 ET, and July Factory Orders and July JOLTS Job Openings will be released at 10:00 ET.
NVIDIA (NVDA, Financial) is down ahead of the open after receiving a DOJ subpoena in an antitrust probe. Salesforce (CRM, Financial) is acquiring Tenyx, a developer of AI-powered voice agents, with financial details undisclosed. Dick's Sporting Goods (DKS, Financial) beat earnings expectations by $0.51, reported revenues in line, raised FY25 EPS and comparable sales guidance, but guided revenue below consensus. Dollar Tree (DLTR, Financial) missed earnings by $0.37 and missed on revenues, guiding Q3 EPS below consensus and FY25 EPS and revenues below consensus. Hormel Foods (HRL, Financial) beat earnings by $0.01 but missed on revenues, guiding FY24 EPS in line and revenues below consensus. Zscaler (ZS, Financial) beat earnings by $0.18 and revenues, but guided Q1 EPS below consensus with revenues above consensus, and FY25 EPS below consensus with revenues in line. GitLab (GTLB, Financial) beat earnings by $0.05 and revenues, guiding Q3 EPS above consensus and FY25 EPS and revenues above consensus.
Today's News
Qualcomm Technologies (QCOM, Financial) has introduced the Snapdragon X Plus 8-core processor as it broadens its push into the AI PC space. This move positions Qualcomm against industry giants Intel (INTC, Financial) and AMD (AMD). CEO Cristiano Amon announced the expansion ahead of the IFA conference in Berlin, with the new processor available from major OEMs like Acer, ASUS, Dell, HP, Lenovo, and Samsung. This development follows Microsoft's (MSFT) introduction of its new Surface PCs powered by Qualcomm’s X Series chips.
Intel (INTC, Financial) could potentially be replaced in the Dow Jones Industrial Average after nearly 25 years. The company's recent slump, marked by an 8.8% drop to $20.10/share, has raised concerns about its ability to turn around its business. Intel has been trading near the lower end of its 52-week range and is the worst performer on the Dow, losing more than half its value year-to-date.
Nvidia (NVDA, Financial) has entered bear territory, with shares declining 23% from their intraday high set in June. Goldman Sachs attributes this to several factors, including residual earnings-related supply issues, negative seasonality, and reports of OpenAI developing in-house chips. Additionally, Nvidia received a subpoena from the Department of Justice related to an ongoing antitrust probe.
Super Micro Computer (SMCI, Financial) saw its shares downgraded by Barclays to Equal-Weight from Overweight, citing uncertainty around its AI margins and internal controls. The brokerage also cut its price target on the stock to $438 from $693, highlighting limited visibility on forward AI server gross margin trends and weaker competitive positioning as key concerns.
Investment firm Citi remains bullish on the semiconductor space despite a recent crash in several stocks. The firm noted that July sales data showed a continued resurgence, with Micron (MU, Financial) being its top pick. Citi maintains its 2024 semi sales forecast of a 14% year-over-year increase, driven by strong pricing for dynamic random access memory.
Nordstrom (JWN, Financial) received a non-binding offer from the Nordstrom family to acquire the retailer for $23 a share in cash. The offer represents a slight premium to Nordstrom's closing price and would be financed through a combination of rollover equity, cash commitments, and new bank financing. The special committee and independent directors are reviewing the proposal.
Zscaler (ZS, Financial) faced a significant drop in shares after offering weaker-than-expected guidance. Several Wall Street firms cut their price targets, with J.P. Morgan lowering its target to $220 from $230. The company’s guidance for fiscal 2025 billings was slightly below consensus, although operating income guidance was better than expected.
Dollar Tree (DLTR, Financial) fell short of estimates with its FQ2 earnings results, leading to a decline in early trading. Sales were up 0.7% to $7.37 billion, with same-store sales increasing by 0.7%. The company saw improved gross margins but faced challenges with higher occupancy and distribution costs.
GitLab (GTLB, Financial) shares surged over 15% after reporting strong FQ2 results and raising its full-year outlook. The company exceeded expectations for adjusted EPS and sales, projecting full-year sales between $742M and $744M, and adjusted EPS of $0.45 to $0.47.
Exxon Mobil (XOM, Financial) has agreed to sell a 35% equity stake in its proposed low-carbon hydrogen and ammonia production facility in Baytown, Texas, to Abu Dhabi National Oil Company. The facility is expected to be the world's largest of its kind upon startup, with production anticipated to begin in 2029.
Boeing (BA, Financial) delivered the most 737 Max jets to China in about six years, with nine planes handed over in August. This marks a positive development for the company, which has faced challenges with the 737 Max model since two deadly crashes led to its grounding in 2018.
Amphenol (APH, Financial) shares slipped 3.7% after BofA downgraded the stock to Neutral from Buy. The downgrade was based on potential design changes to Nvidia’s GB200 platform, which could impact Amphenol’s revenue opportunities.
Molson Coors (TAP) is ending some of its diversity, equity, and inclusion programs amid social media backlash. The company will no longer participate in the Human Rights Campaign's Corporate Equality Index and will end DEI-based training programs and supplier diversity goals. Executive compensation will also no longer be tied to DEI hiring goals starting next year.
Microsoft’s (MSFT) hiring of Inflection AI employees will not be investigated by the U.K.'s antitrust agency. The Competition and Markets Authority found that the transaction does not give rise to a substantial lessening of competition. Microsoft brought in Inflection AI co-founders to help lead its consumer artificial intelligence unit.
US Steel (X) would remain a U.S. company headquartered in Pittsburgh if acquired by Nippon Steel. The Japanese company detailed a governance policy ensuring that US Steel's board and core senior management would be majority U.S. citizens, prioritizing production to meet U.S. market demand.
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