Dow Futures are showing a minor drop after the latest session where all key indices reached new all-time high closes. President Donald Trump and Chinese leader Xi Jinping are expected to have a phone conversation on Friday morning, with a possible agreement concerning the U.S. operations of a certain social media platform likely to be a key topic of discussion. Shipping firm FedEx reported quarterly profit and revenue that surpassed analysts’ expectations, while homebuilder Lennar saw a drop in shares following a decline in three-month income.
Dow Futures pointed to a modest drop on Friday, suggesting a possible halt in the ongoing upward momentum. As of 02:55, the Dow futures contract saw a minor drop of 40 points, reflecting a 0.1% decrease, while S&P 500 futures decreased by 4 points, and Nasdaq 100 futures showed little change. On Thursday, the major indices all recorded new all-time closing highs, as investors continued to process a Federal Reserve interest rate reduction announced earlier in the week. Analysts observed that the bulls are celebrating the current state of both fiscal and monetary policy being in stimulus mode, alongside the ongoing AI mania. In individual stocks, shares of Intel surged by over 22% following the announcement that AI-favored Nvidia acquired a $5 billion stake in the struggling U.S. semiconductor company. After the issuance of new shares, Nvidia is poised to emerge as one of Intel’s key stakeholders.
Market participants will be closely monitoring an anticipated phone call between President Donald Trump and his Chinese counterpart Xi Jinping on Friday morning, where a potential agreement regarding the continued operation of a popular short-form video app in the U.S. is expected to be a topic of discussion. As per reports officials have signaled that the agreement will be a central topic in the forthcoming conversation between Trump and Xi, which will be their first known interaction in three months. It could reportedly serve as a precursor to a possible in-person meeting between the two at a summit in South Korea later this year, following months of intense negotiations over trade since Trump’s return to power in January. For TikTok, owned by China’s ByteDance, an agreement regarding the future of its U.S. operations would address a long-standing source of uncertainty for the immensely popular platform. Even though Congress has required TikTok to sell its U.S. operations or risk being shut down, Trump has repeatedly delayed the deadline for this decision, arguing that this extension will give the White House enough time to find an appropriate owner. Trump has shown restraint in not antagonizing TikTok’s large user community — and noted that the platform “contributed to my election” in 2024. On Monday, officials from the U.S. and China unveiled a framework deal, indicating that the platform’s operations in the United States would be managed by a consortium of investors, which includes Oracle, Silver Lake, and Andreessen Horowitz. However, important questions are arising about the precise ownership structure and the level of influence that China will have over the application.
Shares of FedEx surged in after-hours trading following the U.S. shipping company’s announcement of quarterly revenue and profit that exceeded expectations. FedEx, headquartered in Memphis, strengthened its position through a concerted effort to reduce costs, effectively mitigating the impact of declining international volumes that followed the expiration of a tariff exemption for specific low-value goods shipped directly to consumers. To achieve a $1 billion cost reduction in the current fiscal year, FedEx has begun closing facilities, reorganizing divisions, and grounding aircraft. The changes, along with indications of consumer strength despite concerns over price hikes from tariffs, strengthened the company’s closely monitored operating margin. Executives highlighted that the end of the “de minimis” exemption led to a $150 million decrease in fiscal first-quarter revenue; nonetheless, the overall figure of $22.24 billion surpassed projections of $21.66 billion. Adjusted profit of $912 million surpassed expectations.
Lennar’s shares experienced a decline in after-hours trading, impacted by a significant 46% decrease in fiscal third-quarter profit at the homebuilder. U.S. housing demand has been influenced by worries about inflation, and it is still unclear if the start of a Federal Reserve policy easing cycle will lead to short-term reductions in mortgage costs. Lennar has introduced incentives like cost adjustments and mortgage rate buydowns to boost home demand; however, these actions have also adversely affected profit margins. At the same time, fourth-quarter home deliveries are expected to range from 22,000 to 23,000 units, falling short of the anticipated figure of 25,000.
The Bank of Japan kept its interest rates steady on Friday, as anticipated, amid increased uncertainty about the country’s political direction and the effects of U.S. trade tariffs on the economy. Policymakers at the BOJ have expressed plans to begin reducing a portion of its significant holdings in stocks, exchange-traded funds, and real estate investment trusts, after announcing a halt to purchases in a landmark decision made last year. Japanese stock markets faced a notable drop after this announcement, indicating a further phase of monetary tightening. The Bank of Japan kept its benchmark interest rate steady at 0.5%, aligning with market expectations. The central bank last raised interest rates in January of this year. Friday’s decision was backed by a 7-2 majority vote within the BOJ’s rate-setting board, with two members – Takata Hajime and Tamura Naoki pushing for a 25-basis point increase due to ongoing inflation concerns.