U.S. stock futures were largely flat on Friday as investors weighed easing inflation pressures against a fresh batch of technology earnings, renewed semiconductor volatility and persistent geopolitical risks in energy markets.
Applied Materials (NASDAQ:AMAT) delivered stronger-than-expected fourth-quarter revenue guidance, but its shares still fell in extended trading as investors judged the outlook against lofty expectations for AI-related companies.
At the same time, Semiconductor Manufacturing International Corp rallied after reporting a sharp improvement in second-quarter revenue and profit, while oil prices moved higher amid uncertainty surrounding the Strait of Hormuz.
U.S. futures little changed after Wall Street gains
By 03:18 ET (07:18 GMT), Dow futures were down 72 points, or 0.1%, while S&P 500 and Nasdaq 100 futures were broadly unchanged.
Wall Street’s main indices had advanced on Thursday, supported by another wave of results from companies linked to artificial intelligence spending.
Vital Knowledge analysts noted that several AI-exposed businesses, including Cisco Systems and Cerebras Systems, saw their shares fall despite quarterly updates because expectations had become particularly demanding.
Sandisk (NASDAQ:SNDK) also struck an optimistic tone at an analyst event, forecasting mid-to-high-teens percentage revenue growth between fiscal 2028 and 2030, helped by longer-term AI demand.
Meanwhile, softer annual producer price inflation in July strengthened expectations that the Federal Reserve could keep interest rates unchanged at its September meeting rather than resume tightening.
Applied Materials outlook fails to satisfy elevated expectations
Applied Materials forecast fourth-quarter revenue of around $10.25 billion, plus or minus $500 million, exceeding market expectations as investment in AI infrastructure continues to support demand for advanced semiconductor manufacturing equipment.
The rapid build-out of AI computing infrastructure has increased demand for both sophisticated chipmaking tools and additional wafer capacity, providing a strong backdrop for semiconductor equipment suppliers.
Applied Materials said it is also working to expand manufacturing capacity to meet customer demand.
Even so, the shares fell more than 5% in extended-hours trading as investors focused on whether the company’s guidance was strong enough relative to already elevated Wall Street forecasts.
SMIC earnings surprise drives shares higher
Semiconductor Manufacturing International Corp posted a strong second quarter, with revenue climbing 36.1% year on year to $3.01 billion.
Profit attributable to shareholders surged 261.7% to $479.2 million, while gross margin improved to 25.3% from 20.4% a year earlier.
Wafer shipments increased 20.1% and capacity utilisation rose to 93.7% from 92.5%.
For the third quarter, SMIC expects revenue to grow 2% to 4% sequentially, with gross margin forecast between 26% and 28%.
Management said AI-related industrial momentum should continue to support broad semiconductor demand during the second half, while the company plans to speed up qualification of newly added production capacity.
Oil advances as Hormuz risks remain unresolved
Oil prices rose on Friday and were on track for their first weekly gain in three weeks as uncertainty over U.S.-Iran tensions and Persian Gulf shipping continued to support a geopolitical risk premium.
Brent crude futures gained 1.6% to $88.43 a barrel, while U.S. West Texas Intermediate advanced 1.9% to $82.72 by 03:36 ET. Both benchmarks were up roughly 5% for the week.
The rally was partly restrained by weaker demand forecasts from major industry bodies and a larger-than-expected increase in U.S. crude inventories.
The Strait of Hormuz remained a key source of uncertainty, with Washington and Tehran making conflicting claims over control and commercial access.
U.S. Treasury Secretary Scott Bessent said Washington would impose “measures like have never been seen in the history of economic isolation on a country.”
Workday jumps on Silver Lake takeover report
Workday (NASDAQ:WDAY) shares surged 25% on Thursday after Reuters reported that private equity firm Silver Lake was holding discussions over a possible acquisition of the software company.
The talks have reportedly taken place over recent months, although negotiations remain ongoing and there is no certainty that a deal will be completed.
A potential acquisition would likely value Workday above its roughly $43 billion market capitalisation and could rank among the largest software buyouts on record.
Before the report, Workday shares had fallen around 15% year to date and more than 40% from their 2024 peak.
Reuters said neither Silver Lake nor Workday responded to requests for comment.
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