U.S. stock futures dipped slightly Friday following record-setting closes for Wall Street’s major indices in the previous session. Investors are also focused on a scheduled phone call between President Donald Trump and Chinese President Xi Jinping, with a potential deal over TikTok’s U.S. operations expected to dominate discussions. Meanwhile, FedEx exceeded analysts’ revenue and profit forecasts, while Lennar shares slipped after a sharp fall in quarterly earnings.
Futures Show Minor Retreat
By 02:55 ET, Dow futures had declined 40 points, or 0.1%, S&P 500 futures were down 4 points, and Nasdaq 100 futures were largely unchanged. On Thursday, the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite all closed at record highs, as investors processed the Federal Reserve’s rate cut earlier this week.
“[B]ulls [are] celebrating the fact that both fiscal and monetary policy are now in stimulus mode while the AI mania continues,” analysts at Vital Knowledge said in a note.
Shares of Intel (NASDAQ:INTC) jumped more than 22% after Nvidia (NASDAQ:NVDA), the AI-focused chipmaker, revealed a $5 billion stake in the beleaguered semiconductor company. After the issuance of new shares, Nvidia will become one of Intel’s largest stakeholders.
Trump-Xi Call Draws Attention
Market participants are closely watching the expected Friday morning call between Trump and Xi, with a potential agreement to keep TikTok operating in the U.S. likely to be discussed.
U.S. officials told Reuters that the TikTok deal tops the agenda for the first known call between the two leaders in three months. The discussion could set the stage for a possible in-person summit in South Korea later this year, following months of tense trade negotiations since Trump returned to office in January.
For TikTok, owned by China’s ByteDance, an agreement on its U.S. operations would resolve ongoing uncertainty for the platform. While Congress has demanded that TikTok divest its U.S. business or face a shutdown, Trump has repeatedly extended the deadline, arguing it allows time to find a willing buyer. Trump has also noted that the app “helped get me elected” in 2024.
On Monday, U.S. and Chinese officials unveiled a framework deal, with the Wall Street Journal reporting that TikTok’s U.S. arm would be managed by a consortium including Oracle, Silver Lake, and Andreessen Horowitz. Significant questions remain regarding the ownership structure and China’s influence over the platform.
FedEx Beats Expectations
FedEx (NYSE:FDX) shares rose in after-hours trading after the company reported quarterly revenue and profit above analysts’ forecasts. Cost-cutting initiatives helped offset weaker international volumes following the end of a tariff exemption on certain low-value consumer shipments.
As part of a $1 billion cost reduction plan for the fiscal year, FedEx has closed facilities, restructured divisions, and parked aircraft. These measures, coupled with resilient consumer demand amid tariff-driven price pressures, boosted operating margins.
Executives noted that ending the “de minimis” exemption reduced first-quarter revenue by $150 million, but total revenue of $22.24 billion still exceeded estimates of $21.66 billion. Adjusted profit of $912 million also surpassed expectations.
Lennar Earnings Disappoint
Shares of Lennar (NYSE:LEN) declined slightly in after-hours trading after the homebuilder posted a 46% drop in fiscal third-quarter profit. U.S. housing demand has been pressured by inflation concerns, and it is unclear if the Fed’s renewed policy easing will reduce mortgage costs in the near term.
Lennar has introduced incentives, including cost adjustments and mortgage rate buydowns, to stimulate demand, but these measures have reduced profit margins. Fourth-quarter home deliveries are expected to range from 22,000 to 23,000 units, below the 25,000 estimated, according to LSEG data cited by Reuters.
Bank of Japan Holds Rates
The Bank of Japan kept interest rates at 0.5% as expected Friday, amid political uncertainty and concerns over the impact of U.S. tariffs. Policymakers also outlined plans to sell portions of their extensive holdings in equities, ETFs, and REITs, following last year’s historic halt to purchases—a move that triggered declines in Japanese equities.
The rate decision passed with a 7-2 vote in the BOJ board, with two members—Takata Hajime and Tamura Naoki—calling for a 25-basis point hike despite steady inflation. The BOJ last raised rates in January.
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