Stock Futures Fall as Fed Rate Hike Concerns Mount

Introduction

Stock futures fell on Thursday as investors expressed concerns over the Federal Reserve’s decision to keep interest rates higher for a longer period. Several stocks were expected to experience significant movements on this day.

Stock Movements

C3.ai (AI)

• Shares of C3.ai dropped by 11% after the company forecasted a wider-than-expected fiscal-year loss.
• The artificial intelligence software provider also withdrew its previous forecast of achieving profitability by the end of fiscal 2024.
• C3.ai’s CEO, Thomas Siebel, still believes in the immediate market opportunity and plans to capitalize on it.
• The company expects to be cash positive in fiscal 2024 and fiscal 2025 but does not anticipate non-GAAP profitability in Q4 FY 24.

Apple (AAPL)

• Apple’s shares declined by 2.7% due to China’s ban on the use of iPhones by central government officials at work.
• This ban caused a 3.6% slump in the company’s shares on Wednesday.

GameStop (GME)

• GameStop’s shares were down by 0.4% after experiencing pre-market session gains.
• The videogame retailer reported a narrower-than-expected adjusted second-quarter loss.
• CEO Matt Furlong departed in June, and Ryan Cohen, GameStop’s largest shareholder, was named executive chairman.
• GameStop chose not to host a conference call to discuss their results.

UiPath (PATH)

• UiPath reported adjusted second-quarter earnings that surpassed Wall Street expectations, leading to a 4.6% rise in their stock.
• The company expects third-quarter revenue between $313 million and $318 million, and fiscal-year revenue between $1.27 billion and $1.28 billion.
• UiPath’s board authorized a stock buyback of $500 million.

ChargePoint Holdings (CHPT)

• The electric-vehicle charging company experienced a 12% decline after reporting a wider second-quarter loss compared to the previous year.
• Their adjusted basis loss was also worse than analysts’ estimates.

BlackBerry (BB)

• BlackBerry’s stock was down by 12% after the company forecasted second-quarter revenue of $132 million, falling below analysts’ estimates.
• The cybersecurity company attributed this revenue shortfall to certain large government deals not closing during the quarter.

Yext (YEXT)

• Yext’s stock slumped by 16% after reporting second-quarter adjusted earnings that were in line with analysts’ expectations.
• The company expects third-quarter earnings of 6 to 7 cents per share on revenue of $101.5 million to $102.5 million.
• Fiscal-year earnings are forecasted to be between 29 and 30 cents per share on revenue of $405 million to $407 million.

Smurfit Kappa Group and WestRock (WRK)

• Smurfit Kappa Group confirmed discussions with WestRock over a potential merger.
• The potential merger could create a global paper and packaging company worth approximately $20 billion.
• WestRock’s shares rose by 6% following this news.

Dell Technologies (DELL)

• Dell Technologies’ stock fell by 2.7% after being downgraded to Underweight from Equal Weight by analysts.
• The price target remained unchanged at $53.

Cloudflare (NET)

• Cloudflare’s stock declined by 3.4% after analysts at BofA initiated coverage with an Underperform rating and a price target of $52.

Conclusion

The concerns surrounding the Federal Reserve’s decision to keep interest rates higher for an extended period have led to stock futures falling. Various companies, such as C3.ai, Apple, GameStop, UiPath, ChargePoint Holdings, BlackBerry, Yext, Smurfit Kappa Group, WestRock, Dell Technologies, and Cloudflare, experienced significant movements in their stock prices.

Contact Joe Woelfel at [email protected] for more information.