Key insights
- Dell Technologies shares surged on AI-driven earnings, signaling strong tech sector performance. While PCE inflation met expectations, monthly figures were slightly below forecasts, suggesting a potential easing of price pressures. However, a declining personal savings rate indicates ongoing consumer strain. Geopolitical developments involving Iran add a layer of uncertainty, though a potential peace deal could be a positive catalyst if finalized. Overall, a mixed bag with a bullish tilt from tech earnings.
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Happy Friday. I’m CJ, filling in for Alex this morning. You might know me from my coverage of technology stocks on and off since 2024. My co-workers know me as the news associate that can fold a serious origami crane. Speaking of things that fly, wait until you hear where shares of Dell Technologies are headed this morning after an AI-fueled earnings beat.
Stock futures are higher before the bell. All three major averages are coming off a winning session and on pace for a positive week.
Here are five key things investors need to know to start the trading day:
Iranian state media reported yesterday that Tehran fired missiles at unidentified targets. The latest military action came after the White House confirmed a report that the U.S. and Iran have “mostly agreed” to the terms of a deal to end the conflict, though the President Donald Trump has yet to give his final approval.
Here’s what to know:
Inflation continues to pinch at consumers this spring. The Commerce Department reported yesterday that the personal consumption expenditures price index rose 0.4% last month, putting the annual rate at 3.8% — the highest level since May 2023. Core inflation, which excludes food and energy, increased 0.2% in April to hit an annual rate of 3.3%.
As CNBC’s Jeff Cox reports, the 12-month readings were in line with expectations but both monthly numbers were slightly below Wall Street’s expectations, a sign that the recent rise in prices could be easing.
Inflation’s pressures are causing Americans to save less. Data from the Bureau of Economic Analysis published yesterday showed that the personal savings rate fell to its lowest level since 2022 as the everyday cost of living, as well as gas and grocery prices, outpaced paychecks.
Shares of Dell Technologies rocketed as high as 39% in extended trading after the company reported its fastest pace of revenue growth since it returned to the public market in 2018.
The server maker topped analysts’ expectations on both lines, reporting an 88% annual increase in revenue thanks to a flood of AI demand. Dell said it now expects $60 billion in AI revenue for the year, up from a February projection of $50 billion.
As CNBC’s Garrett Downs, Hayley Cuccinello and Jordan Novet report, CEO Michael Dell was an early supporter of Trump’s second term. Now, his company is wrapping up its best month in years and just this week landed a $9.7 billion deal with the Pentagon.
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Thursday’s slew of retail earnings saw mixed results. Shares of American Eagle are down roughly 10% before the bell after the company reported declining revenue for its namesake brand in the first quarter, despite ramping up its marketing campaign featuring actress Sydney Sweeney.
Meanwhile, Gap’s namesake banner saw comparable sales soar 10% in its first quarter, far past analysts’ expectations. But sluggish sales at Old Navy led the retailer to cut its full-year sales outlook, sending shares down roughly 15% in premarket trading.
Best Buy, on the other hand, closed up 15% in Thursday’s session after it reported better-than-expected first-quarter results and a slight climb in revenue.
Families are now able to download the Trump Accounts app, bringing the tax-deferred investing account program another step closer to its official launch on July 4.
An account can be opened for all U.S. children with a social security number. Babies born between 2025 and 2028 will be eligible for an initial $1,000 deposit from the Treasury Department, and a growing list of companies and philanthropists are pledging to match that deposit for certain qualifying families.
Here are some stories from this week you don’t want to miss:
— CNBC’s Kevin Breuninger, Spencer Kimball, Hugh Leask, Justin Papp, Lisa Kailai Han, Kamaron McNair, Jeff Cox, Jordan Novet, Garrett Downs, Hayley Cuccinello, Gabrielle Fonrouge, Amelia Lucas, Eunice Yoon and Charlotte Morabito contributed to this report.
CNBC’s Josephine Rozzelle edited this edition.