US Stock Market Outlook: Inflation Concerns Rise, Tech Stocks Decline, Intel Drops Over 4%

US Stock Market Update

As of Friday morning, US stock index futures are all down. The Dow futures fell by 0.6%, Nasdaq futures dropped by 1.46%, and S&P 500 futures decreased by 0.99%.

Notable Stock Movements

Star tech stocks are experiencing widespread declines, with Intel (INTC) down over 4%, and Alibaba (BABA) and AMD (AMD) both down more than 3%. Popular Chinese stocks are also down, with Baidu (BIDU) and Bilibili (BILI) each falling over 3%.

Earnings Reports

Figma reported better-than-expected earnings, with Q1 revenue growing 46% year-over-year to $333 million, surpassing market expectations of $313 million.

Applied Materials (AMAT) also reported a strong Q1, with revenue up 37% to $8.72 billion and adjusted EPS of $2.28, exceeding forecasts. The company noted a 120% increase in orders for AI chip manufacturing equipment.

Cisco (CSCO) reported a 7% revenue increase to $14.7 billion, with adjusted EPS of $0.98, also above expectations. The company’s recent layoffs improved operational profit margins, and AI network equipment orders surged by 85%.

Major Deals and Investments

Former President Trump announced that China will purchase 200 Boeing (BA) aircraft, marking the first significant purchase of US-made commercial planes by China in nearly a decade. However, this figure fell short of market expectations.

OpenAI completed a $122 billion funding round, raising its valuation to $750 billion. CEO Sam Altman stated that despite this funding, the company still faces a $30 billion gap in computing power.

Market Trends and Economic Indicators

The Federal Reserve's balance sheet increased by $19 billion to $6.729 trillion, with a notable rise in reserve balances. Concerns over inflation are growing, leading to a re-evaluation of interest rate expectations in the global bond market.

The CME's FedWatch tool indicates a 96.8% probability that the Fed will maintain interest rates in June, with only a 3.2% chance of a 25 basis point cut.

Upcoming Economic Data

Key economic indicators to watch include the New York Fed Manufacturing Index and US Industrial Production data, scheduled for release later today.

Investors are encouraged to stay informed about market movements and potential investment opportunities.