Tesla could be a $10,000 stock in a decade, says longtime bull Ron Baron
Investing.com - U.S. stock futures point broadly lower, with the possible end of a federal government shutdown in focus. The U.S. Senate votes in favor of a bill to reopen the government after a selection of Democrats break with their party to back the measure. AI cloud services group CoreWeave trims its annual revenue forecast, while Japanese tech investment giant SoftBank’s quarterly profit surpasses expectations.
1. Futures subdued
U.S. stock futures were hovering below the flatline on Tuesday as investors assessed the potential end to a prolonged federal government shutdown.
By 02:42 ET (06:42 GMT), the Dow futures contract was mostly unchanged, S&P 500 futures were lower by 7 points, or 0.1%, and Nasdaq 100 futures had slipped by 42 points, or 0.2%.
The main averages on Wall Street ended higher in the prior session, spurred on by hopes that lawmakers in Washington were close to ending an historically-long shutdown of the U.S. government.
Analysts at Vital Knowledge added that the narrative around artificial intelligence has remained bolstered by “bullish” expectations for earnings later this month from key tech industry players, including AI-darling Nvidia.
Still, the outlook for further interest rate cuts by the Federal Reserve this year is murky, with one official at the central bank suggesting on Monday that room for more reductions is now limited.
2. Senate approves bill to end government shutdown
The U.S. Senate voted to send a spending package which would end the longest-ever federal government shutdown to the House of Representatives, as eight Democrats provided the support needed to break the impasse.
Republicans, who control both the Senate and the House, are anticipated to continue backing the bill, which has received the blessing of the Trump administration.
Criticism was directed by some Democratic Party figures at its members who voted in favor of the legislation, which will extend government funding until January 30, set aside a year’s worth of funding for the Agriculture Department, the legislative branch and military construction, and guarantee the reversal of federal worker layoffs triggered by the shutdown. Democrats had been demanding that any deal to reopen the government comes with guarantees that Republicans would lift a deadline that could heavily impact healthcare for millions of Americans. GOP leaders, for their part, have vowed to hold a vote on the matter by mid-December.
Democrats have been hitting out at President Donald Trump over what they perceive to be efforts by the White House to deny food assistance and dent domestic air travel as a device to force negotiations to end the shutdown. Administration officials, meanwhile, have been arguing that the shutdown has made it slash spending and draw down the number of domestic flights to secure safe air travel.
3. CoreWeave trims revenue outlook
Shares of CoreWeave fell in extended hours trading after the Nvidia-backed AI cloud services firm flagged a delay at a third-party data center partner.
CoreWeave reduced its full-year revenue forecast as a result. CFO Nitin Agrawal said that the company now expects its top-line result to be between $5.05 billion and $5.15 billion in its 2025 fiscal period, compared to previous projections of $5.15 billion to $5.35 billion. Analysts had anticipated guidance of $5.29 billion, according to LSEG data cited by Reuters.
The update overshadowed otherwise solid third-quarter results from the group, which has recently moved to fortify its position in the AI boom through a series of multibillion-dollar deals with major tech industry names like ChatGPT maker OpenAI and Facebook owner Meta Platforms. CoreWeave’s stock has spiked since its flotation earlier this year.
Quarterly revenue surged to a better-than-expected $1.36 billion, as demand for its AI cloud offerings was strong.
Adjusted operating income margin, however, dipped to 16% from 21% a year ago, while Agrawal -- echoing a wider trend in the AI segment -- outlined plans to ratchet up capital expenditures next year. In 2025, it expects to spend $12 billion to $14 billion.
4. SoftBank reports
SoftBank Group Corp. clocked a much stronger-than-expected fiscal second-quarter profit, as the Japanese tech conglomerate continued to reap strong returns from its aggressive bets on artificial intelligence.
The company said it had sold all of its shares in Nvidia -- about 32.1 million shares -- for $5.83 billion in October. The sale was not reflected in SoftBank’s second-quarter earnings, and the company did not disclose a rationale for the sale.
SoftBank posted a net profit attributable of 2.502 trillion yen ($16.3 billion) for the July-September quarter, much higher than Bloomberg estimates of 418.23 billion yen. Softbank’s profit also more than doubled from the 1.179 trillion yen seen last year.
The earnings were fueled chiefly by gains on investments at the company’s flagship Vision funds, the second of which continued to carry out its investment commitments in OpenAI during the quarter.
5. China eyeing plan to restrict U.S. military from its rare earths - WSJ
China is preparing measures to ease the flow of rare earths and other critical materials to the U.S. military, the Wall Street Journal reported on Tuesday, citing people familiar with the plan.
Bejing plans to establish a “validated end-user” system to exclude companies with ties to the U.S. military from receiving its rare earths, while fast-tracking shipments to other, civilian firms, the WSJ reported.
The system will allow China to follow through on President Xi Jinping’s recent pledge to U.S. President Donald Trump to resume the flow of rare earths to the world’s largest economy.
Such a system could make importing Chinese materials even tougher for U.S. companies with civilian and defense clients.
Rare earths are used in a variety of applications, from consumer electronics to defense equipment. China is the world’s largest supplier of the materials, and has used its dominance as a major bargaining chip in its renewed trade conflict with the United States.