Market Optimism Boosted by Apple’s Solid Earnings
As the deadline for tariffs on Canada and Mexico approaches, US stock futures are on the rise, driven by Apple’s impressive first-quarter profit beat. The tech giant’s shares are surging in pre-market trading, despite quarterly iPhone and China sales falling short of expectations. Investors are taking an upbeat outlook on revenue as a sign of future recovery.
Tech Sector Gets a Boost
Intel’s better-than-expected earnings are also helping to alleviate tech fears sparked by DeepSeek’s promise of cheap Chinese AI. The chipmaker’s stock is tipped to rise, adding to the positive sentiment in the market. The Nasdaq 100 futures are up 0.8%, while S&P 500 futures and Dow Jones Industrial Average futures are also gaining, building on Thursday’s gains.
Tariff Deadline Looms
However, the looming Saturday deadline for tariffs on Canada and Mexico is reviving worries about the impact on the economy. President Trump has doubled down on his threat to impose a 25% tariff, which could lead to inflation and affect interest rates. The dollar is rising, headed for its best week since November, as investors await the outcome.
Inflation Report to Shape Interest Rates
The Personal Consumption Expenditures index, the Fed’s preferred inflation gauge, will be closely watched for a steer on the path of interest rates. Economists expect annual “core” PCE to come in at 2.8% in December, unchanged from November. The report will provide valuable insights into the economy and guide the Federal Reserve’s decision-making.
Earnings Season Heats Up
A fresh batch of earnings reports is expected from major companies, including Chevron, Colgate, Exxon Mobil, and Phillips 66. Investors will be closely watching these reports for signs of growth and recovery.
Executives Speak Out
Intel’s co-interim CEO Michelle Holthaus has been praised for her blunt honesty on the state of the chipmaker. Her comments, along with those of co-interim CEO David Zinsner, suggest Intel is in for a tough 2025. Meanwhile, Apple’s Tim Cook has expressed bullish comments on Apple Intelligence, driving the pre-market bid in Apple shares. However, analysts remain cautious, citing concerns over China sales and competition.
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