Salesforce’s forecast indicates slow AI monetisation

General market commentary

US equities closed mostly higher on Wednesday, with the Nasdaq leading gains after a favourable court ruling in the Google antitrust case lifted big tech shares. Alphabet surged nearly 9% after being allowed to retain control of its Chrome browser and Android operating system, while Apple advanced almost 4% as the decision preserved Google’s estimated $20 billion annual payment for default search placement on iPhones. The S&P 500 added around 0.5%, supported by strength in technology equities, while the Dow ended broadly flat. Salesforce, however, dropped more than 4% in extended trading after issuing a weaker-than-expected revenue forecast.

In macro developments, a Labour Department report showed US job openings fell in July to their lowest level in 10 months, signalling softer labour market conditions. The data reinforced expectations that the Federal Reserve could cut interest rates in September, though some market participants warned the motive may be slowing growth rather than progress on inflation. Government bond yields eased following the jobs data, though longer-dated yields remained elevated as global fiscal pressures continue to push rates higher. Overall, equities balanced optimism from corporate results and regulatory clarity with caution over the economic outlook and Fed policy direction.

Latest market and economic update

Most Asian equities rose on Thursday, supported by Wall Street gains and optimism over potential Fed rate cuts, with Japan’s Nikkei 225 leading, up 1.4%. China and Hong Kong lagged, with markets falling on reports of possible curbs on equity speculation, hitting tech and biotech shares, including Cambricon, SMIC, Hua Hong, and WuXi, amid profit-taking.

US equity futures were steady on Wednesday evening as investors awaited Friday’s nonfarm payrolls, expected to guide Federal Reserve policy ahead of its September meeting. Softer JOLTS data reinforced bets on a rate cut, with futures also weighed by a sharp post-earnings drop in Salesforce despite the firm boosting its buyback programme by $20 billion.

European equities rebounded on Wednesday, with the STOXX 50 and STOXX 600 rising 0.7% after Tuesday’s 1.4% decline amid fiscal and bond yield concerns. Tech shares led gains, with SAP, ASML, and Nokia up 1.8–3%, while Airbus, Schneider, and LVMH advanced 1.5–3%, helping the market recover from recent losses.

The US dollar index hovered near 98.1 on Thursday after retreating on softer labour and factory data, as markets priced in a near-certain Fed rate cut this month. Attention now turns to payrolls releases for further guidance. The euro edged higher, with EUR/USD at 1.1652, underscoring the dollar’s weaker tone against major peers.

Oil prices fell in early Asian trade this morning, with Brent at $67.35 and WTI at $63.30 a barrel, extending prior losses amid reports that OPEC+ may consider another output hike. US inventories rose unexpectedly, while soft economic data, including contracting manufacturing activity, further dampened demand prospects, adding pressure on crude ahead of key payrolls data.

President Trump warned that the US may need to “unwind” trade deals with the EU, Japan, and South Korea if the Supreme Court upholds a ruling invalidating many of his tariffs. He argued that losing the case could cause severe economic harm, while experts noted the deals were framework agreements and tariffs are primarily paid by US importers.

Equities on the move

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

Salesforce forecast third-quarter revenue slightly below estimates, as AI platform monetisation lags amid cautious client spending. A $20 billion share buyback failed to prevent shares falling over 5%. CEO Marc Benioff highlighted AI-driven efficiency, including 4,000 customer support job cuts, while acquisitions aim to expand the company’s cloud offerings.

Hewlett Packard Enterprise beat third-quarter revenue estimates at $9.14 billion, led by strong demand for AI-optimised servers and networking. Server revenue rose 16% and networking 54% year-on-year. The Juniper acquisition and Nvidia-powered AI servers supported growth, prompting HPE to raise its fiscal 2025 revenue forecast to 14–16% from 7–9%.

Macy’s shares surged 20% after raising annual sales and profit forecasts, signalling progress in its turnaround plan. The company is focusing on higher-end labels, closing underperforming stores, and selectively raising prices to offset tariff impacts. Second-quarter results beat expectations, with net sales of $4.81 billion and adjusted profit of 41 cents per share.

Apple is developing an AI-powered web search tool, internally called “World Knowledge Answers,” set for launch next year. Integrated into Siri, the service will later extend to Safari and Spotlight, enabling users to search the internet via Apple’s systems. Some underlying technology may come from Google under a newly formalised testing agreement.

ConocoPhillips will cut 20–25% of its workforce, the company confirmed, with employees notified via email and a video message from CEO Ryan Lance. A townhall meeting is scheduled for Thursday at 9 a.m. CT to provide further details. The reductions reflect the company’s ongoing efforts to streamline operations and manage costs.

Hims Hers Health shares rose 7% after a federal judge dismissed Eli Lilly’s lawsuit against Willow Health, easing legal concerns over compounded GLP-1 drugs. The ruling supports physician-tailored treatments and telehealth models, boosting investor confidence in Hims, which has seen strong subscriber growth and revenue from cost-effective alternatives to branded therapies.

NuScale Power shares rose 8.7% after ENTRA1 Energy and the Tennessee Valley Authority agreed to deploy up to 6 gigawatts of NuScale’s small modular reactors, marking the largest SMR programme in U.S. history. The reactors will provide carbon-free baseload power, supporting energy security and growing electricity demand from hyperscale datacentres, AI, and critical infrastructure.

BYD has cut its 2025 sales target by 16% to 4.6 million vehicles, marking its slowest annual growth in five years amid rising competition from rivals like Geely and Leapmotor. The Chinese EV giant reported a 30% quarterly profit drop, slowed production, and weakening domestic demand, signalling a slowdown in its previously rapid expansion.

The Trump administration expressed concern over Norway’s $2 trillion wealth fund divesting from Caterpillar, citing the use of the company’s equipment by Israeli authorities in Gaza and the West Bank. Washington is engaging with Oslo, while U.S. officials criticised the move, which comes amid the ongoing humanitarian crisis following Israel-Hamas clashes in Gaza.

Bernstein raised its ADR price target on Taiwan Semiconductor to $290 from $249 and maintained an Outperform rating, citing strong AI and non-AI demand driving projected 33% revenue growth in 2025. The brokerage highlighted rising earnings, limited FX headwinds, potential chip price hikes, and the company’s insulation from US tariffs amid robust AI infrastructure spending.

Barclays raised its price target on SAP to €300, citing strong cloud adoption, AI demand, and the Business Data Cloud (BDC) platform. The bank expects ~13% revenue CAGR to FY30 and €14.3 EPS, with AI and BDC contributing €3.5 billion. Significant margin upside and free cash flow growth support an Overweight rating.

Jefferies upgraded Prosus to “buy,” raising its price target to €65.5, citing CEO Fabricio Bloisi’s “investor-owner-operator” strategy. The approach, focused on food delivery, fintech, and AI-driven insights, aims to unlock value beyond Tencent holdings. Recent acquisitions, share buybacks, and the narrowing NAV discount support growth potential and a more optimistic valuation.

Jefferies upgraded Adidas to “buy,” raising its price target to €220, citing growth in running, apparel, and football, boosted by World Cup momentum. Despite tariff pressures, margins remain supported. EPS is projected at €7.63 in 2025, rising to €12.27 by 2027, reflecting confidence in the brand’s expansion and performance categories.

Upcoming data and events

Today’s main economic releases include the ADP private payrolls, weekly jobless claims, services and manufacturing PMIs, and oil inventories in the U.S. In Europe, retail sales data will offer insight into consumer spending trends. Earnings reports are also due from Broadcom, Costco, and Lululemon, adding further potential to influence market movements.

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