US Stock Market Outlook: Potential Breakthrough in US-China Talks, Major Stocks Rise

Market Overview

On Thursday morning, an Iranian diplomatic source indicated that negotiations between Iran and the U.S. in Pakistan might achieve a breakthrough "tonight or tomorrow." This news led to a slight narrowing of losses in U.S. stock index futures, with the Dow futures down 0.38%, Nasdaq futures down 0.18%, and S&P futures down 0.16%.

Pre-Market Movements

• Star Tech Stocks: Tesla fell nearly 3%, while Meta, Microsoft, and ASML dropped over 1%.

• Popular Chinese Stocks: Most saw declines, with Xpeng down over 4%, Alibaba down over 2%, and Pinduoduo and TAL Education down over 1%.

Tesla's Strategic Shift

Tesla announced an unexpected increase in its capital expenditure for 2026, projecting over $25 billion to support AI chip development, Robotaxi, and the Optimus robot. The company emphasized that Full Self-Driving (FSD) is its core product, with cars serving merely as delivery vehicles.

Tesla's executives confirmed that the commercial license for FSD in China is not yet in place, contradicting earlier rumors of a rollout on April 22. The third-generation humanoid robot is expected to debut mid-year, with production starting in July-August 2026.

Nokia's Strong Q1 Performance

Nokia reported better-than-expected Q1 earnings, with a 56% year-on-year increase in optical network sales. The company’s net sales rose 3% to €4.5 billion, slightly below analyst expectations, but adjusted operating profit surged 54% to €281 million.

Intel's Upcoming Earnings

Intel's stock rose nearly 2% in pre-market trading as it prepares to release its earnings report. The company has secured its first major customer for its advanced 14A manufacturing process, which Tesla plans to use in its Terafab project.

Broadcom Joins $2 Trillion Club

Broadcom's stock surged approximately 5% after announcing a collaboration with Google on the eighth-generation Tensor Processing Unit (TPU), pushing its market cap past $2 trillion, making it the sixth U.S. company to reach this milestone.

Netflix Announces Stock Buyback

Netflix's stock rose over 1% after announcing a $25 billion stock buyback plan, building on a previous plan that still has $6.8 billion available. This comes after a disappointing earnings report that saw the stock drop over 13% since April 16.

ServiceNow's Mixed Results

ServiceNow's stock fell over 13% in pre-market trading despite reporting Q1 revenues of $3.77 billion, which met analyst expectations. The ongoing Middle East conflict has delayed several large orders, raising concerns about the impact of AI on enterprise software.

Texas Instruments' Strong Q1

Texas Instruments' stock rose over 10% after reporting a strong Q1 performance, with revenues up 19% year-on-year to $4.83 billion, exceeding expectations. The company anticipates Q2 revenues between $5 billion and $5.4 billion.

Other Notable Earnings

• STMicroelectronics: Q1 revenue grew 23% to $3.1 billion, exceeding expectations.

• IBM: Despite exceeding revenue expectations, its stock fell over 7% due to concerns about AI's impact on traditional business.

Conclusion

The market is reacting to a mix of earnings reports and geopolitical developments, with significant movements in tech stocks and ongoing concerns about the economic impact of international conflicts. Investors are closely monitoring these developments as they shape market sentiment.