Equities struggle to maintain positive momentum

General market commentary

U.S. equity markets finished mostly higher on Wednesday in a relatively quiet session for economic data, as investors looked ahead to key inflation and consumer-spending reports. The Nasdaq outperformed with a 0.7% gain, driven by strength in growth-oriented sectors such as technology and communication services, while the S&P 500 rose modestly by 0.1%, and the Dow Jones slipped 0.2%. The recent rebound in equities has been supported by a de-escalation in trade tensions, particularly with China and the UK, helping the S&P 500 recover from a 19% decline earlier in the year to now stand roughly flat year-to-date. However, defensive sectors like health care lagged, reflecting shifting investor preferences amid a rally that’s seen U.S. small- and mid-cap shares rise sharply. Treasury yields also moved higher, with the 10-year rate climbing to 4.56%, signaling investor focus on upcoming inflation data and Fed policy commentary.

Investor attention now turns to today’s economic data, with April’s producer price index (PPI) and retail sales figures set to provide fresh insights into inflation and consumer demand. Expectations call for modest monthly gains in both headline and core PPI, as well as in control-group retail sales, which excludes volatile categories. While recent trade agreements have eased tensions, Fed Vice Chair Philip Jefferson warned that tariff increases could temporarily disrupt disinflation trends. At the same time, strong household balance sheets and a resilient labour market are expected to support consumer spending despite rising prices. In corporate news, Super Micro Computer surged 16% on a $20 billion AI partnership, while AMD jumped nearly 5% following a new $6 billion buyback plan—highlighting continued investor enthusiasm for tech-driven growth.

Latest market and economic update

Asian markets mostly retreated on Thursday as a tech-led rally cooled, with investors turning cautious ahead of key earnings from Alibaba and U.S. Federal Reserve commentary. Japan led losses amid GDP concerns, while Chinese and Hong Kong stocks saw mild fluctuations, and Australia and Singapore posted modest gains.

U.S. equity index futures fell overnight, with the S&P 500 and Nasdaq 100 futures down 0.1% and Dow Jones futures dropping 0.5%, as investors awaited key inflation data and a speech by Federal Reserve Chair Jerome Powell for signals on monetary policy. In after-hours trading, Foot Locker surged 69% on reports of a near $2.3 billion acquisition by Dick’s Sporting Goods, while UnitedHealth dropped 8% amid a Japanese central bank probe.

European shares closed slightly lower as investors took profits and weighed risks from pending US tariffs. The Eurozone STOXX 50 fell 0.3% to 5,400 and the STOXX 600 dropped 0.4%, with consumer discretionary hardest hit-LVMH and Kering down 2% and 3%, and L’Oreal falling 3.3%. Healthcare also declined on US drug price cap concerns, while banks outperformed, with Santander, UniCredit, and ING gaining over 1%.

The U.S. dollar wobbled amid mixed investor sentiment following the U.S.-China tariff truce and ongoing trade uncertainties. The euro traded around $1.1214, supported by a weaker dollar, as the dollar index remained steady at 101 and is expected to gain further against major currencies in the near term, driven by evolving economic and policy developments.

Oil prices extended sharp declines in Asia, with Brent falling 1.6% to $65.04 and WTI dropping 1.7% to $61.62 per barrel, following a report that Iran is open to a nuclear deal with the U.S. if sanctions are lifted. The market was also weighed down by an unexpected 3.5 million barrel rise in U.S. crude inventories, fuelling concerns of oversupply amid ongoing OPEC+ production increases.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Cisco Systems reported better-than-expected quarterly results, with revenue of $14.15 billion and adjusted earnings of 96 cents per share, beating analyst estimates. Following the strong performance and an upgraded annual revenue forecast of $56.5 billion to $56.7 billion, shares rose 2.7% in after-hours trading.

Tencent Holdings posted stronger-than-expected first-quarter results, with revenue up 13% to 180 billion yuan, driven by AI-powered growth in its gaming and advertising units. Bernstein raised its price target to HK$660, praising management’s confident focus on the long-term benefits of AI and suggesting the market is undervaluing Tencent’s growth prospects.

UnitedHealth Group is being investigated by the Department of Justice for possible Medicare fraud related to its Medicare Advantage business, causing its shares to fall sharply in after-hours trading to a near five-year low. Besides this criminal probe, the company faces antitrust and civil investigations, has replaced its CEO, and is grappling with challenges from potential federal healthcare spending cuts and drug pricing reforms.

Dick’s Sporting Goods is nearing a deal to acquire Foot Locker for about $2.3 billion, offering $24 per share, which represents an 86.5% premium to Foot Locker’s last closing price. Following the news, Foot Locker’s shares surged over 62% in after-hours trading, while Dick’s Sporting Goods shares fell around 5%, with the deal potentially finalising as early as today.

Starbucks has reached out to private equity firms, technology companies, and other potential investors as it explores strategic options for its China business, including a possible stake sale, Bloomberg News reported. The company has sent letters via a financial adviser to gauge interest and growth ideas, with the transaction potentially valuing the business at several billion dollars.

Netflix’s ad-supported tier has grown rapidly to 94 million monthly active users, up from 70 million in November, reflecting strong demand for its lower-priced $7.99 plan amid global economic uncertainty. The company continues to see robust engagement across all streaming tiers, with its ad-supported option reaching more U.S. viewers aged 18 to 34 than any broadcast or cable network, while expanding its advertising platform globally to attract more users and advertisers.

Euronext reported a 14.1% year-on-year rise in first-quarter revenue and income to €458.5 million, driven by record fixed income trading, strong equity markets, and growth in non-volume revenue, which made up 57% of income. Adjusted EBITDA rose 17% to €294.1 million with a 64.1% margin, while adjusted net income increased 11.8% to €183.5 million, reflecting strong performance amid market volatility and early gains from the "Innovate for Growth 2027" strategy.

Alstom’s shares fell over 17% after it issued a cautious forecast for 2025/26, projecting free cash flow between €200 million and €400 million and an adjusted EBIT margin of 7%, below market expectations. Despite this, the company reported a strong fiscal 2024/25 with free cash flow of €502 million, signalling resolution of previous cash issues from the Bombardier acquisition, alongside organic sales growth of 6.6% and ongoing debt reduction.

Burberry plans to cut around 1,700 jobs globally, about 20% of its workforce, mainly affecting office roles and removing a night shift at its Castleford trench coat factory to reduce overproduction. The company aims to save £100 million annually by 2027 through these cost reductions, while investing in upgrading the Castleford facility to sustain UK manufacturing and support its turnaround.

Qatar Airways placed a record order for 160 Boeing widebody jets, including 130 787 Dreamliners and 30 777X aircraft, with options for 50 more, in a $96 billion deal signed during President Donald Trump’s visit to Qatar. The agreement, which also includes more than 400 GE Aerospace engines, marks Boeing’s largest-ever widebody order and is seen as a significant boost for the company.

Apple is developing an eye-scrolling feature for its Vision Pro headset as part of the visionOS 3 update, allowing users to scroll through apps using only their eyes and removing the need for hand gestures. This builds on the headset’s eye-tracking technology and aims to improve user interaction, with Apple expected to unveil visionOS 3 at its Worldwide Developers Conference on June 9.

Novo Nordisk has partnered with Septerna to develop oral small molecule medicines for obesity and diabetes, in a deal worth up to $2.2 billion. This supports Novo’s aim to expand its pipeline and strengthen its position in the $150 billion obesity market amid growing competition, including from Eli Lilly’s Zepbound, while advancing innovative therapies targeting key GPCR receptors.

Super Micro Computer shares rose 15.7% yesterday after announcing a $20 billion deal with Saudi firm DataVolt to supply GPU platforms for AI data centres. The partnership supports DataVolt’s use of renewable energy and Supermicro’s US manufacturing expansion, aiming to boost sustainable, large-scale computing infrastructure and strengthen international technology cooperation.

AMD announced a new $6 billion share repurchase program, increasing its total buyback capacity to around $10 billion including the remaining $4 billion from its previous authorisation. CEO Dr. Lisa Su highlighted that the expanded program reflects confidence in AMD’s strategy, strong free cash flow, and commitment to disciplined capital allocation and shareholder returns.

eToro Group Ltd priced its upsized IPO at $52 per share, raising $620 million by selling nearly 12 million shares, with trading debuting strongly on Nasdaq and shares surging 39% to $72.25, valuing the company at nearly $6 billion. The firm reported robust 2024 results with net income up 1,161% to $192 million and commissions rising 46%, driven by growth in crypto and equity trading.

Bank of America raised price targets for Nvidia to $160 and AMD to $130, citing multi-year AI deals with Saudi Arabia’s HUMAIN worth $3–$5 billion annually that could offset export restrictions to China from 2026. The bank sees sovereign AI as a $50 billion annual market, expects Nvidia to secure $7 billion in contracts, and AMD’s $10 billion project marks its first major engagement alongside Nvidia, reaffirming Buy ratings on both.

Upcoming data and events

Key U.S. data today include retail sales, producer price index, and jobless claims, revealing trends in spending, inflation, and employment. Walmart, Deere & Co, and Applied Materials are among major firms reporting earnings.

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