U.S. stock futures are trending downward on Friday, as market participants evaluate a deluge of corporate earnings while also considering a potential easing in the persistent U.S.-China trade conflict. Beijing is reportedly contemplating exemptions to its retaliatory levies for certain products, including some semiconductor-related items. Alphabet, the parent company of Google, has reported first-quarter income that exceeds expectations, even as the search behemoth reaffirms its substantial capital expenditure plans amid economic uncertainty driven by tariffs.
U.S. stock index futures experienced a decline on Friday, as investors assessed the earnings report from Google-parent company Alphabet and considered the possibility of a reduction in trade tensions. At 06:50 ET, Dow Jones Futures declined by 187 points, representing a decrease of 0.5%. S&P 500 Futures saw a reduction of 15 points, or 0.3%, while Nasdaq 100 Futures experienced a drop of 74 points, equivalent to 0.4%.
In the realm of individual stocks, a number of companies, such as Procter & Gamble, PepsiCo, American Airlines, and Chipotle Mexican Grill, have either eliminated or reduced their financial forecasts in light of the uncertainties surrounding the effects of the tariffs. ServiceNow’s profit exceeded expectations due to robust demand for its artificial intelligence-driven software, resulting in a 15.5% increase in its shares.
The primary indices on Wall Street experienced gains for the third straight session on Thursday, supported by signs that U.S. President Donald Trump’s administration might be easing its position regarding Beijing. Trump has positioned China as a focal point of his assertive tariff strategy, increasing duties on the world’s second-largest economy to a minimum of 145%. China, in response, has imposed a 125% duty on American imports. The Commerce Ministry has urged the U.S. to revoke all of its “unilateral” tariffs, as media reports indicate that Trump officials are contemplating a reduction in the excessively high rate of these levies. U.S. Treasury Secretary Scott Bessent has contended that the existing tariffs are untenable.
China is contemplating an exemption for certain U.S. products from its substantial retaliatory tariffs and is soliciting businesses to pinpoint goods that may qualify, as reported by Reuters. Citing a source close to the matter, the news agency reported that a taskforce from China’s Ministry of Commerce is compiling a list of items that may be exempted and is soliciting companies to submit their own requests. The president of the American Chamber of Commerce in China informed Reuters that China’s government has been “asking our companies what sort of things are you importing to China from the U.S. that you cannot find anywhere else and so would shut down your supply chain.” Beijing is considering the potential inclusion of eight semiconductor-related products — excluding memory chips — in the exemptions, as reported by the Caijing financial news magazine.
Shares in Alphabet surged during after-hours trading following the parent company’s announcement of stronger-than-expected first-quarter earnings. This comes as it reaffirmed its commitment to substantial investments in AI, even amid the persistent economic turbulence driven by tariffs. Operating income at the search giant reached $30.6 billion during the period, significantly surpassing analysts’ forecasts, whereas group-wide revenue was largely consistent with expectations. Capital expenditures reached a record high of $17.2 billion, as the company reaffirmed its goal to allocate $75 billion this year to bolster its AI capabilities. Recent inquiries have arisen regarding the substantial expenditures by Google and several of its large-cap technology counterparts, particularly in light of the introduction of a competitive, cost-effective AI model from the Chinese start-up DeepSeek.
In the interim, executives indicated that it was premature to assess the impact — if any — of Trump’s elevated tariffs. Although Google’s operations are unlikely to face a direct impact from the levies, numerous businesses that invest in its advertising and cloud services may experience repercussions. Firms have indicated that the pervasive uncertainty surrounding tariffs is complicating future planning, prompting some analysts to forecast that these companies may curtail their marketing expenditures.
Investors are expected to maintain a close watch on corporate results, as the latest quarterly earnings season accelerates. Before trading commences on Wall Street, a series of reports are set to be released, featuring data from AbbVie, HCA Healthcare, Colgate-Palmolive, Phillips, and Centene Corporation. AbbVie may attract significant attention from market participants. Traders are keenly awaiting any insights from the company regarding its strategies for managing potential U.S. pharmaceutical tariffs and drug price controls, analysts at Vital Knowledge noted in a communication to clients. HCA’s management might encounter inquiries regarding the potential effects of reductions to Medicaid, the Vital Knowledge analysts noted.
On the economic calendar, the final reading of the University of Michigan’s consumer sentiment survey is poised for release. The preliminary data indicated that households were developing a more pessimistic outlook on the economy, anticipating increased inflation largely attributed to the ongoing global trade tensions.
Oil prices experienced a slight increase; however, the market was on track for a weekly downturn due to worries regarding oversupply from the Organization of the Petroleum Exporting Countries. Both the Brent and West Texas Intermediate crude contracts are poised to experience a decline of nearly 2% this week, following a report from Reuters indicating that multiple oil-producing nations within the OPEC cartel are advocating for an acceleration of output increases in June. This move would extend the unexpected boost seen in May, amid growing internal disputes regarding quota compliance. OPEC and its allies, including Russia, collectively referred to as OPEC+, are scheduled to convene on May 5 to finalize their strategies regarding output levels for June.