Sign InKey Insights Ahead of Friday's, May 31, Stock Market Opening Bell
Alex Vellor
Tech Stocks Tumble
On Thursday, the stock market experienced a notable decline, driven primarily by the tech sector. Salesforce (NYSE: CRM), a leading cloud software vendor, had its worst trading day since 2004, plummeting by 20%. The company’s fiscal first-quarter results fell short of expectations, causing significant investor concern. This substantial drop pulled the Dow Jones Industrial Average down by 330.06 points, or 0.86%. The S&P 500 lost 0.6%, while the Nasdaq Composite, which is heavily influenced by technology stocks, fell by 1.08%.
Adding to the tech sector's woes, Nvidia’s stock slid over 3%, marking its first decline since its impressive earnings report last week. Microsoft also saw a decline of more than 3%, contributing further to the overall weakness in the technology market.
Ambarella's Optimistic Outlook
In the semiconductor sector, Ambarella (NASDAQ: AMBA) saw a significant increase in premarket in its stock price, rising 20%. The company reported a smaller-than-expected loss for the first quarter of fiscal year 2025 and provided an optimistic revenue outlook for the second quarter. This positive forecast has boosted investor confidence, reflecting optimism about the company’s future performance.
Other premarket movers:
| Company | Exchange | Ticker | Stock Change | Summary |
|---|---|---|---|---|
| Dell Technologies | NYSE | DELL | -15% | Lower-than-anticipated earnings outlook and increased spending on servers for AI impacted full-year margins. |
| Gap | NYSE | GPS | +23% | Raised its full-year sales forecast, indicating a successful turnaround strategy. |
| Nordstrom | NYSE | JWN | -7.5% | Wider-than-expected Q1 loss, although revenue was above estimates. |
| Zscaler | NASDAQ | ZS | +15% | Strong quarterly earnings and increased guidance. |
| MongoDB | NASDAQ | MDB | -24% | Issued lighter guidance for the quarter and reduced full-year forecast. |
| Trump Media & Technology Group | NASDAQ | DJT | -1.6% | Stock dropped after a jury found Donald Trump guilty in a hush money trial. |
| Marvell | NASDAQ | MRVL | -5.7% | Missed Q1 revenue expectations due to weak spending in wireless carrier and enterprise markets. |
| Costco Wholesale | NASDAQ | COST | -0.5% | Decided against raising membership fees; however, Q3 profit, revenue, and same-store sales beat forecasts. |
Inflation Rises as Expected, Fed Decision Awaited
Inflation rose in April as expected, keeping markets on edge regarding potential interest rate cuts. The personal consumption expenditures (PCE) price index, excluding food and energy, increased by 0.2%, matching the Dow Jones estimate. Annually, core PCE was up 2.8%, slightly above the 2.7% estimate.
Including food and energy, annual PCE inflation stood at 2.7%, with a 0.3% increase from the previous month, both in line with forecasts. The Federal Reserve prefers the PCE measure over the consumer price index (CPI) because it accounts for changes in consumer behavior and has a broader scope.
A 1.2% rise in energy prices contributed to the headline increase, while food prices declined by 0.2%. Goods prices rose by 0.2%, and services increased by 0.3%, reflecting ongoing economic normalization where services and consumption drive growth.
About The Author
Alex Vellor
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