The S&P 500 futures are down 38 points, the Nasdaq 100 futures are down 250 points, and the Dow Jones Industrial Average futures are down 46 points.
Futures for the S&P 500, Nasdaq 100, and Dow are lower. A drop in NVIDIA (NVDA, Financial) and other chipmakers is contributing to the downward trend. NVIDIA expects to incur charges of up to $5.5 billion in Q1 due to H20 product licensing requirements.
The MBA Mortgage Application Index fell by 8.5% this week. Other important data today includes the March Retail Sales report and the March Industrial Production and Capacity Utilization report.
U.S. Treasury yields show little change ahead of this data, with the 10-year yield up one basis point to 4.33% and the 2-year yield down one basis point to 3.82%.
The U.S. retail sector saw a strong rebound in March, with retail sales increasing by 1.4% month-over-month to $734.9 billion, according to the U.S. Census Bureau. Core retail sales, which exclude motor vehicles and parts, rose by 0.5% month-over-month, surpassing expectations. This growth indicates a recovery from February's weaker performance, with motor vehicles and parts dealers experiencing an 8.8% year-over-year sales increase. Nonstore retailers, such as online sellers, also saw a 4.8% rise in sales year-over-year.
Nvidia (NVDA, Financial) is facing significant challenges as it requires an indefinite license to export its H20 GPUs to China, essentially blocking sales due to ongoing trade tensions. This move is seen as a strategic measure by the U.S. government in the trade war with China. Nvidia's shares dropped 6.3% in premarket trading as analysts suggest this is just the beginning of a prolonged negotiation process between the two nations.
Hertz Global (HTZ, Financial) experienced a remarkable surge in premarket trading, climbing 20% after Pershing Square Holdings disclosed a 4.1% stake in the company. This move by Bill Ackman (Trades, Portfolio)'s fund has sparked investor interest, with the car rental company's stock reaching $4.38. The high short interest in Hertz may contribute to increased volatility in the stock's performance.
Alphabet's (GOOG, Financial) Google is facing a significant class action lawsuit in the UK, with claims that it abused its dominance in the search market, potentially driving prices higher. The lawsuit alleges that Google paid Apple (AAPL, Financial) to make Google the default search engine on Apple's Safari browser, further cementing its market position. This legal battle could have broad implications for Google's business practices and market power.
Hewlett Packard Enterprise (HPE, Financial) is under the spotlight after Elliott Investment Management took a $1.5 billion stake in the company. Analysts at BofA Securities maintain a Buy rating on HPE, citing its compelling valuation and potential for cash flow improvements. The investment by Elliott Management is seen as a strategic move to unlock value within the company.
Abbott Laboratories (ABT, Financial) reported a mixed Q1 2025 performance, with revenue falling short of expectations despite an earnings beat. The company reaffirmed its earnings outlook amid uncertainties surrounding tariffs on MedTech and Pharma products. Abbott plans to invest $500 million to enhance its U.S. R&D capabilities, demonstrating its commitment to growth despite external challenges.
Target (TGT, Financial) faces a downgrade from Goldman Sachs, which cites the retailer's vulnerability to declining consumer spending due to its focus on discretionary items. With tariffs impacting consumer behavior, Target's sales may slow in a volatile macro environment, prompting Goldman to adopt a more cautious stance.
United Airlines (UAL, Financial) saw a 6% increase in shares after posting better-than-expected Q1 earnings. The airline's growth in its basic economy segment and international revenue offset a decline in domestic revenue. However, management cautioned that a recession could impact profitability in the coming quarters.
Vale (VALE, Financial) reported a 4.5% year-over-year decrease in Q1 iron ore production, attributed to adverse weather conditions in Brazil. Despite this, iron ore sales rose by 3.6% due to inventory supply. Vale's copper output exceeded expectations, with strong performances from its Canadian and Brazilian operations.
Ecolab (ECL, Financial) announced a 5% trade surcharge on its U.S. solutions and services, effective May 1, 2025. The surcharge aims to offset rising raw material costs due to changes in trade policies, as Ecolab continues to focus on delivering value to its customers amid a challenging economic landscape.
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