After the U.S. stock market opened, sellers quickly took control. Futures on the main indices (US100, US500) are down about 1%, while US30 and US2000 are doing better and are up around 0.2%. This may suggest that market concerns are heavily concentrated in large-cap companies and the technology sector.
The market is focusing on news from technology companies, especially Micron’s excellent results, as well as a dense set of May macroeconomic data. Micron’s results reinforce the “AI trade” narrative, but the behavior of the indices clearly shows that not all investor doubts have been resolved.
Macroeconomic data
- PCE inflation rose to 4.1%, in line with market expectations. This data should not dramatically affect the priced-in path of U.S. interest rates. It is worth noting that core PCE inflation is not only significantly lower, but also stabilized earlier. This may imply that the price increase is temporary.
- Economic growth surprised to the upside: U.S. GDP (Q1) grew by 2.1% versus 1.6% expected. Wages and personal spending also increased by 0.7%.
- Jobless claims remained in a range above 200k, but came in below expectations.
- Consumer spending and durable goods orders may be a concern, as they turned out to be clearly lower than expected.
US100 (D1)
Price is oscillating around resistance at the 38.2% Fibonacci level, but supply is already clearly entering the resistance zone. The correction remains shallow, and the RSI has normalized in the meantime. The momentum of the EMA averages also remains clearly pro-growth (bullish). If selling maintains the initiative, the next target level would be the 61.8% Fibonacci level, i.e. around 28,445 points. Source: xStation5.
Company news
- Micron (MU.US): The memory manufacturer posted phenomenal results; the stock is up 20% at the open. The company reported $41.46 billion in revenue and $25.11 EPS, an increase of over 100% versus the previous quarter and several percent above the median market expectations. Strong results are also supporting other manufacturers in the sector.
- Wendy’s (WEN.US): The stock continues its rebound from valuation lows, driven by retail buying amid optimism about the next “meme stock.” The shares are up about 10%.
- IBM (IBM.US): The company showcased its first prototype chip in technology below 1 nm. Shares are up 2%.
- Apple (AAPL.US): The company raised product prices, citing large shortages of memory components, which consumer electronics must compete for with AI data centers. The market sees looming pressure on margins and/or a decline in sales; the stock is down about 5%.
- Blue Owl (OBDC.US): According to Bloomberg, the investment firm is negotiating the purchase of the “Cavaliers” basketball team. Shares are up 2%.
- BlackBerry (BB.US): The company published optimistic year-end guidance; revenue is expected to be supported by infrastructure spending. Shares are up 7%.
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