Market participants will be watching the Personal Consumption Expenditures (PCE) Index, released today, for signs of improving inflation. Nike (NKE) shares fell sharply after the company lowered its fiscal 2025 sales outlook. Optical equipment supplier Infinera (INFN) surged after it agreed to be acquired by Nokia (NOK). Tractor Supply (TSCO) shares rose after the company announced the end of its diversity, equity and inclusion (DEI) initiative. Boeing (BA) shares were little changed after it was sanctioned by the National Transportation Safety Board (NTSB) for leaking nonpublic investigation information to the media. U.S. stock futures rose. Here’s what investors need to know today.
1. Federal Reserve officials expect to see further inflation gains in the PCE report
Market participants will be eagerly awaiting the release of the personal consumption expenditures (PCE) index, which is expected to show inflation slowing again in May. Economists expect year-on-year inflation to ease to 2.6% from 2.7% in April, with “core” inflation, which excludes energy and food costs, also expected to fall to 2.6%, the lowest level since March 2021. The recent inflation report showed that price pressures are starting to ease again after rising earlier this year, leading Federal Reserve officials to withdraw their outlook for interest rate cuts. Investors will be watching the report for signs that inflation is slowing significantly, which could give Federal Reserve officials the confidence to start cutting interest rates and send markets higher.
2. Nike shares plummet after quarterly sales fall short of expectations and the company cuts guidance
Shares of apparel maker Nike (NKE) fell about 15% in premarket trading after the company reported weaker-than-expected quarterly earnings and executives lowered their fiscal 2025 sales outlook. Nike’s fourth-quarter revenue was $12.6 billion, down about 2% year over year and below analyst expectations. The company reported improved net income, with earnings per share (EPS) of 99 cents, up from 66 cents in the same period last year and above analysts’ expectations of 84 cents. However, the company lowered its fiscal 2025 sales forecast, saying it expected full-year sales to increase but now expects them to decline by a mid-single-digit percentage. Additionally, Chief Financial Officer Matt Friend said, “We expect first-quarter revenue to decline approximately 10%.”
3. Infinera soars on Nokia takeover bid
Shares of optical equipment supplier Infinera (INFN) jumped 19% in premarket trading on Friday, a day after Finnish telecommunications company Nokia (NOK) agreed to buy the company for $2.3 billion. The deal will value Infinera’s shares at $6.65 a share, 28 percent above Wednesday’s closing price of $5.18. Nokia will pay at least 70 percent of the offer price in cash, and Infinera shareholders will be able to receive the remainder of the offer price in Nokia’s American Depositary Receipts (ADSs).
4. Tractor Supply Co. shares rise on sharp rise in DEI and environmental goals
Shares of animal feed distributor Tractor Supply Co. (TSCO) rose about 1% in premarket trading after the company said Thursday it was discontinuing its corporate diversity and environmental goals after receiving “disappointing” reports from customers. The Tennessee-based company said it would eliminate all diversity, equity and inclusion (DEI) goals, roll back its carbon footprint target and “end its sponsorship of non-profit activities like Pride festivals and voter turnout campaigns.”
5. NTSB disciplines Boeing for sharing nonpublic information with media
Boeing (BA) shares were little changed in premarket trading after the National Transportation Safety Board (NTSB) sanctioned the plane maker for violating agency rules during its investigation into a January crash that blew off a panel on a 737 Max 9 jet during flight. The NTSB said the company improperly released information related to its investigation during a press conference on Tuesday. As a result, the NTSB will limit information sharing with Boeing, the agency said. The reprimand came after Boeing said it could not find documents related to its work on defective door plugs on Alaska Airlines (ALK) flights.
