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Futures mostly higher, FedEx's rosy outlook, Rivian surges - what's moving markets

Published 2024-06-26, 03:40 a/m
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Investing.com -- U.S. stock futures point mostly into the green on Wednesday after a rebound in tech stocks helped the S&P 500 and Nasdaq Composite end multi-day losing streaks in the previous session. FedEx (NYSE:FDX) shares spike in extended hours trading as the delivery group and global economic bellwether unveils an upbeat full-year financial forecast. Shares in Rivian (NASDAQ:RIVN) also surged, boosted by plans from Germany's Volkswagen (ETR:VOWG_p) to invest up to $5 billion in the electric truck maker.

1. Futures broadly higher

U.S. stock futures edged broadly higher on Wednesday after the benchmark S&P 500 and tech-heavy Nasdaq Composite snapped three-day losing streaks in the prior session.

By 03:27 ET (07:27 GMT), the Dow futures contract was mostly flat, S&P 500 futures had gained 5 points or 0.1%, and Nasdaq 100 futures had inched up by 32 points or 0.2%.

Strength in artificial intelligence semiconductor group Nvidia (NASDAQ:NVDA) and other big-name tech firms pulled both the S&P 500 and Nasdaq Composite into the green on Tuesday. Shares in Nvidia climbed by 6.8%, recovering from a three-session sell-off, while the sector-wide Philadelphia Semiconductor index added 1.8%.

Chipmakers also gave lift to the S&P 500 Technology index, while Google-parent Alphabet (NASDAQ:GOOGL) and Facebook-owner Meta Platforms (NASDAQ:META) also rose, pushing up the communications services index.

The blue-chip Dow Jones Industrial Average was the laggard, ending the trading day in the red after touching a one-month high on Monday.

2. FedEx advances on upbeat outlook

Shares in FedEx surged by more than 13% in extended hours trading after the shipping giant revealed an upbeat outlook and unveiled plans for a $2.5 billion share buyback in its current financial year.

The Memphis-based company, whose results are considered to be a possible marker of the state of the global economy, said it now expects to deliver full-year revenue growth in the low- to mid-single digit. Analysts had called for an increase of 3%.

Earnings in its 2025 fiscal period are also seen at between $20 to $22 per share, topping Wall Street's predictions of $20.92 at the midpoint.

FedEx also reported a 7.2% uptick in income excluding items to $1.34 billion in its fiscal fourth quarter on revenue of $22.1 billion. CEO Raj Subramaniam called the returns "unprecedented in this current environment," adding that the momentum is expected to "continue in fiscal 2025."

3. Pool shares sink

Pool (NASDAQ:POOL) stock fell 7% on Tuesday after the swimming pool products distributor cut its earnings and revenues expectations, citing the impact of a downturn in consumer spending on big-ticket items like home improvement projects.

One of the sector's leading names, Lousiana-based Pool flagged that construction activity may slip by 15% to 20% this year. Sales year-to-date have also decreased by around 6.5% versus the comparable period in 2023, the company noted.

The firm warned that recent data suggests "persistently weak demand for new pool construction" following the end of the typical swimming pool high-season from late May to early June.

Pool's decline on Tuesday pulled down peers like pool supplies firms Hayward Holdings (NYSE:HAYW) and Leslie's (NASDAQ:LESL), as well as pool manufacturer Latham Group (NASDAQ:SWIM).

4. Rivian shares soar as VW plans $5 billion investment

Shares in Rivian leapt in extended hours trading after Germany's Volkswagen announced a major investment plan in the American high-end electric truck group.

The partnership, which could see VW provide Rivian with as much as $5 billion in capital, aims to form a 50/50 joint venture for sharing knowledge on electric vehicle architecture and software. If the tie-up is completed, Volkswagen will gain "immediate access" to Rivian's current EV technology.

A final decision on the establishment of the joint venture is still pending.

The move comes as VW looks to bolster its EV offerings during a time of intensifying competition from rivals in China and U.S. giant Tesla (NASDAQ:TSLA).

5. Crude inches up

Crude prices rose Wednesday, despite a surprise jump in U.S. stockpiles, as traders weighed geopolitical risks and confidence surrounding the summer driving season.

By 03:26 ET, the U.S. crude futures (WTI) traded 0.6% higher at $81.28 per barrel, while the Brent contract climbed 0.5% to $84.62 a barrel.

Data from the American Petroleum Institute, released on Tuesday, showed that U.S. oil inventories grew by around 0.9 million barrels in the week to June 21.

This was something of a surprise given expectations for a draw of 3 million barrels, but is largely being overlooked as investors anticipate inventory drawdowns during the peak third quarter demand season. The official numbers from the Energy Information Administration are due later in the session.

Both contracts are still sitting on strong gains over the past two weeks, as persistent geopolitical tensions – Israeli strikes on Gaza and Ukrainian attacks on Russian refineries -- resulted in traders pricing a risk premium into oil prices.

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