US Stock Market Outlook: Mixed Signals Amid Nonfarm Data and Fed Disagreements

US Stock Market Overview

On Friday morning, US stock futures showed a downward trend across the board. The Dow futures fell by 0.25%, S&P 500 futures dropped by 0.33%, and Nasdaq futures decreased by 0.52%.

Notable Stock Movements

Most star tech stocks experienced declines, with AMD down by 2% and Nvidia falling over 1%. Chinese concept stocks also saw a general downturn, with Xiaoma Zhixing dropping over 4%, Xpeng Motors down nearly 3%, and Alibaba falling more than 2%.

In contrast, high-performing stocks rose before the market opened, with Expedia surging over 14%, Affirm Holdings increasing by more than 10%, and SanDisk Corp rising over 4%. However, underperforming stocks weakened, with Opendoor Technologies plummeting over 23% and MP Materials dropping nearly 7%.

Tesla's Shareholder Meeting

Tesla shareholders approved a compensation package for Elon Musk worth up to $1 trillion, with over 75% voting in favor. Musk revealed that the Full Self-Driving (FSD) technology is expected to receive full approval in China by early next year. To unlock the full compensation, Tesla's market cap must exceed $8.5 trillion, and several key targets must be met.

Key Targets for Musk's Compensation

• Cumulative delivery of 20 million Tesla vehicles
• Active FSD subscription users exceeding 10 million for three consecutive months
• Delivery of 1 million robots
• 1 million Robotaxis in commercial operation

Other Noteworthy Developments

Apple and TSMC Price Increases

Reports suggest that TSMC will raise prices on several chips for Apple, potentially impacting the pricing of the upcoming iPhone 18.

Meta's Revenue Concerns

Meta Platforms is facing scrutiny as it is projected that 10% of its 2024 revenue, approximately $16 billion, will come from fraudulent advertising. This has led to a slight pre-market decline in its stock.

Airbnb's Strong Demand

Airbnb reported strong demand in October, predicting fourth-quarter sales to exceed expectations, although new service expenditures may impact profits.

Market Sentiment and Economic Indicators

Fed's Potential Actions

New York Fed President John Williams indicated that the Fed may soon need to expand its balance sheet to meet liquidity demands, hinting at potential bond purchases.

Concerns Over AI Investments

The excitement surrounding AI stocks is being overshadowed by concerns about funding for OpenAI, which has committed to investing over $1.4 trillion in AI infrastructure without current profitability.

Jobless Claims Rise

Recent analyses suggest that initial jobless claims in the US may have risen to approximately 228,000, reflecting economic pressures during the government shutdown.

Conclusion

The market is currently navigating through a mix of strong earnings reports and economic uncertainties, with significant movements in tech stocks and ongoing discussions about monetary policy and economic forecasts.