Here are the most important news, trends and analysis that investors need to start their trading day:
- Tech pressures Wall Street premarket; data shows inflation still high
- Amazon falls on ugly forecast and slowest growth since dot-com bust
- Apple drops after warning of a massive hit due to supply constraints
- Musk sells around $4 billion of Tesla shares as he moves to buy Twitter
- Chevron, Exxon drop despite reporting strong earnings on high energy prices
U.S. stock futures fell Friday, with the tech-heavy Nasdaq set to open down 1.5% as Amazon and Apple sank in the premarket, the morning after reporting rough quarterly results. The Nasdaq led a recovery rally Thursday on Wall Street, soaring more than 3%. The S&P 500 jumped 2.5%. The Dow Jones Industrial Average rose nearly 2%. All three stock benchmarks were slightly higher for the week. But heading into the final trading day of April, stocks were still sharply lower for the month.
The 10-year Treasury yield ticked higher Friday, trading at 2.9%, but below its recent late 2018 high. The Federal Reserve's favorite inflation gauge was out before the bell. March's core personal consumption expenditures price index increased 5.2% year over year, slightly lower than expected. But that's still really strong, and likely cementing the central bank's intention to raise interest rates by half a percentage point in May. February's core PCE advance of 5.3% was the highest reading since April 1983.
Amazon dropped more than 10% in the premarket, following its late Thursday announcement of weaker-than-expected first-quarter earnings and lower forward guidance. Revenue for the quarter increased 7% year over year to $116.4 billion, basically matching expectations. That was the slowest sales rise for any quarter since the dot-com bust in 2001 and the second straight quarter of single-digit percentage growth. The Amazon Web Services cloud unit was once again strong. But not strong enough to carry the e-commerce side of the business, which saw $6 billion in added costs due to rising inflation, lower worker productivity and excess fulfillment capacity.
Apple fell 1% in Friday's premarket, the morning after warning that supply constraints related to Covid could hurt sales by between $4 billion and $8 billion in its fiscal third quarter. The guidance overshadowed strong fiscal second-quarter results, including earnings, revenue and gross margin beats. While analysts were looking for a little bit more out of the Services segment, it nonetheless reported record revenue. Products sales saw a March-quarter record. Investors also got a 5% dividend increase and a $90 billion buyback authorization. At quarter end, Apple had a $73 billion net cash position.
Elon Musk sold roughly $4 billion worth of Tesla shares in the days following his $44 billion bid to take Twitter private, according to filings with the Securities and Exchange Commission. The bulk of the CEO's sales were made on Tuesday, the filings showed. Tesla shares fell 12% that day, but edged higher on Wednesday by less than 1 percentage point.
As the filings became public Thursday evening, Musk wrote on Twitter, "No further TSLA sales planned after today." Tesla's stock rose 2% in Friday's premarket. Twitter shares climbed nearly 1% to more than $49 each, below the $54.20 per-share cash offer from Musk.
Shares of Chevron turned positive in Friday's premarket, after the oil giant reported that profit more than quadrupled during the first quarter on higher oil and gasoline prices. Chevron's revenue rose nearly 70% to $54.37 billion. West Texas Intermediate crude futures spiked to $130.50 in early March, a price last seen in 2008 as Russia's invasion of Ukraine sparked supply fears. Prices have since cooled, but are still sitting above $100, boosting energy companies' operations.
Shares of Exxon Mobil turned positive in the premarket following the company's Friday announcement that it took a $3.4 billion after-tax charge in the first quarter related to its Sakhalin-1 operation in Russia. Earnings doubled to $5.5 billion in the quarter. However, profit was down from $8.87 billion in the fourth quarter. Revenue rose more than 50% to $90.5 billion, though that was short of expectations.
— Nicknamed "Woodstock for Capitalists," the Berkshire Hathaway annual meeting is on Saturday, and it will be livestreamed on CNBC.com. Presided over by Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger, the event in Omaha, Nebraska gives shareholders a chance to hear from the two legendary investors and ask them questions.