U.S. stock futures pared back gains on Wednesday after private sector hiring hit its lowest level in more than two years.
Futures pulled back from its gains earlier in the day after private sector hiring slowed in May. A report from payrolls processing firm ADP showed that payrolls increased only 37,000 for the month, less than the downwardly revised 60,000 in April and below the consensus forecast of 110,000 that economists polled by Dow Jones were expecting.
Market Snapshot
Dow Jones Industrial Average futures hovered around the flatline. S&P 500 futures and Nasdaq 100 futures were also flat.
Pre-Market Movers
CrowdStrike Holdings reported first-quarter adjusted earnings that topped Wall Street consensus but revenue in the period of $1.1 billion, up 20% from a year earlier, missed expectations of $1.11 billion. The quarter included general and administrative costs of $38.7 million related to a widespread software outage last July. CrowdStrike said it expects second-quarter adjusted profit of 82 cents to 84 cents a share, better than estimates of 81 cents, on revenue of $1.14 billion to $1.15 billion, below forecasts of $1.16 billion. Shares of the cybersecurity company were down 6.6%.
Hewlett Packard Enterprise jumped 6.9% after the company reported better-than-expected second-quarter earnings and revenue, though profit margins remained under pressure in its server segment, its most important business. Server revenue in the second quarter was $4.06 billion, topping analysts' expectations of $3.98 billion. However, operating profit margins of 5.9% were down from 11% a year earlier.
CoreWeave shares soared another 5% in premarket trading, extending a 25% rally after the company entered into a major long-terminfrastructure agreement with Applied Digital Corp.
Nvidia rose 0.9% to $142.51 in premarket trading. The stock gained 2.9% on Tuesday and the leading maker of artificial-intelligence chips topped Microsoft as the largest U.S. company by market capitalization as of the close of trading. Nvidia's closing market cap was $3.45 trillion, edging out Microsoft's $3.44 trillion, according to Dow Jones Market Data.
Broadcom was up 0.3% at $257.70 ahead of the start of trading Wednesday. Shares of the semiconductor and software company rose 3.3% on Tuesday to close at a record high of $256.85. Broadcom is scheduled to report fiscal second-quarter earnings on Thursday. Citi Research's Christopher Danely raised his price target on Broadcom to $275 from $210 and reiterated a Buy rating, citing strong demand for AI processors.
Shares of Wells Fargo were rising 2.2% after the Federal Reserve lifted the growth restriction it imposed on the country's third-largest bank following a fake-accounts scandal that surfaced in 2016. The Federal Reserve Board of Governors voted to remove the restriction that had capped the bank's assets at just under $2 trillion.
Apple was downgraded to Hold from Buy at Needham. Analyst Laura Martin also removed her price target of $225. The iPhone maker's premium valuation looks undeserved as Apple faces threats to its revenue and earnings growth, Martin wrote in a research note. Apple stock fell 0.6% to $202.63.
Dollar Tree reported first-quarter adjusted earnings of $1.26 a share, beating Wall Street forecasts of $1.21 as net sales of $4.6 billion also topped consensus. The discount retailer posted same-store sales growth of 5.4%. Dollar Tree raised its fiscal-year adjusted earnings forecast to $5.15 to $5.65 a share from $5 to $5.50. The company said its outlook "It further "assumes that we will be able to mitigate most of the incremental margin pressure from higher tariffs and other input costs." Shares fell 1.8%.
Insurance-software provider Guidewire Software raised its fiscal-year revenue outlook to about $1.18 billion to $1.19 billion, up from its prior forecast of about $1.16 billion and $1.17 billion. Guidewire posted fiscal third-quarter adjusted earnings that beat analysts' expectations as revenue rose 22% to $293.5 million on higher subscription and support sales. Shares jumped 15%.
Asana fell 12%. The work management software company said it expects fiscal second-quarter adjusted earnings of between 4 cents and 5 cents a share, on revenue of between $192 million and $194 million. Analysts have been expecting profit of 4 cents a share in the period on revenue of $193 million.
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