US Stock Market Outlook: Uncertain US-Iran Relations, Warner Bros Deal Finalized, Block Soars 18%

US-Iran Negotiations and Market Reactions

The key negotiations between the US and Iran concluded on Friday without an agreement, with both parties set to continue discussions next week.

Market Overview

US stock futures showed weakness across the board, with the Dow futures down 0.66%, Nasdaq futures down 0.44%, and S&P 500 futures down 0.45%.

Pre-Market Movements

Most major tech stocks were down in pre-market trading. Notable declines included:

• Broadcom (AVGO) down nearly 2%
• Micron Technology (MU), ASML, and Microsoft (MSFT) down over 1%
• AMD and Meta Platforms (META) down nearly 1%

In contrast, some Chinese stocks showed mixed results, with Alibaba (BABA), Xpeng (XPEV), and Li Auto (LI) down over 1%, while Pony.ai (PONY) rose nearly 4%.

Notable Company Updates

• Paramount Skydance: Acquired Warner Bros Discovery (WBD) for $31 per share, leading to an 8% pre-market rise for Netflix (NFLX), which withdrew from the bidding citing financial concerns.

• Block (XYZ): Shares surged over 18% after announcing significant layoffs due to AI efficiency improvements, while projecting a 17% year-over-year increase in gross profit for 2025.

• Dell Technologies (DELL): Stock rose over 11% after reporting record earnings and projecting a doubling of AI server revenue by 2027.

• Applied Optoelectronics (AAOI): Shares jumped over 20% as Q4 losses narrowed, exceeding analyst expectations.

• MARA Holdings (MARA): Stock rose 17% as it partnered with Starwood Capital to transform sites for AI infrastructure.

• CoreWeave (CRWV): Shares fell nearly 11% after disappointing Q1 revenue guidance.

• Duolingo (DUOL): Stock plummeted 25% despite exceeding Q4 earnings expectations, due to disappointing 2026 forecasts.

• Rocket Lab (RKLB): Shares dropped over 5% as the Neutron rocket launch was delayed.

Economic Indicators

The US is set to release the latest Producer Price Index (PPI) data, which is anticipated to provide insights into inflation trends. Economists expect stable price pressures, which may influence the Federal Reserve's interest rate decisions.

Central Bank Updates

The People's Bank of China announced a reduction in the forward foreign exchange risk reserve ratio from 20% to 0%, aiming to stabilize the RMB exchange rate.

Market Reactions

Foreign investors sold a record 6.8 trillion KRW (approximately $47 billion) in South Korean stocks, while local investors showed net buying activity.

Conclusion

As negotiations continue and companies report earnings, market volatility is expected. Investors are advised to stay informed on economic indicators and corporate developments.