US OPEN: Wall Street reaches new heights on Intel-Apple optimism

Wall Street opened higher on Tuesday, with the S&P 500 on track to set a fresh record high as it rose 0.6 per cent to 7,245 in early trading. If the index sustains these levels, it will surpass its previous record close of 7,230 reached on Friday. While broad market futures hovered near their opening levels, the tech-heavy Nasdaq 100 showed more pronounced strength, advancing 1 per cent as the sector continued to power the five-week rally.

Market sentiment has been buoyed by a fragile ceasefire between the US and Iran, which appears to be holding despite recent clashes in the Strait of Hormuz and missile attacks against the UAE. This relative stability has encouraged a return to risk assets, leading West Texas Intermediate (WTI) crude to fall approximately 3.5 per cent to roughly $103 a barrel. The retreat in energy prices, with Brent dropping toward $111, has slightly cooled immediate fears of energy-driven inflation.

On the macroeconomic front, the Institute for Supply Management (ISM) services index fell to a five-month low of 53.6 in April, indicating a moderate cooling in the service economy. While the sector remains in expansion, new orders growth slowed significantly, dropping more than 7 points to 53.5. Of greater concern to policymakers is the price gauge, which held at 70.7, matching its highest level since 2022, suggesting that cost pressures in the service sector remain stubbornly elevated. Investors are now looking toward Friday’s non-farm payrolls report for further guidance on Federal Reserve interest-rate policy.

Technical Outlook for the S&P 500 (US500)

The S&P 500 (US500) traded around 7,245 points following the open, while the Nasdaq 100 (US100) saw more aggressive gains of 1 per cent. Technical analysts are watching the 7,300 level as a key resistance point, while immediate support is identified around the 7,220 mark.

Corporate Highlights

• Intel (INTC.US): Shares jumped 10 per cent following reports that Apple has held exploratory discussions regarding using Intel’s US-based manufacturing facilities for its main device processors. Analysts suggest a deal would be a major milestone for Intel’s foundry unit, which has struggled to secure large external clients beyond its partnership with Elon Musk’s Terafab.
• AMD (AMD.US): Shares rose 2.6 per cent ahead of its earnings report due after the closing bell. The stock is coming off its largest one-month gain since 2001, leaving it "priced for perfection" according to some analysts.
• Pfizer (PFE.US): The pharmaceutical giant was little changed after reporting first-quarter sales that exceeded estimates. Robust demand for its established "blockbuster" drugs helped offset the expected decline in revenues from Covid-related products.
• PayPal (PYPL.US): Shares sank 9.5 per cent after the company warned of trends at the lower end of its full-year outlook, despite beating first-quarter earnings estimates.
• Pinterest (PINS.US): The stock surged 17 per cent following an outlook that signaled strong advertising growth and first-quarter sales that topped analyst estimates.
• Palantir (PLTR.US): Shares fell 4.2 per cent; although the company raised its revenue outlook for the year, it missed estimates for US commercial sales.
• GameStop (GME.US): The retailer dipped 2.6 per cent after investor Michael Burry disclosed he had sold his entire position. Burry cited concerns regarding the debt the company might incur following its $56 billion offer to acquire eBay Inc.