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U.S. futures muted, Intuit's free TurboTax users slip - what's moving markets

Published 24/05/2024, 08:48
© Reuters

Investing.com -- U.S. stock futures hover around the flatline heading into the final trading day of the week following a dip in the major averages on Thursday. Intuit (NASDAQ:INTU) shares slip in extended hours trading as analysts fret over a loss of free users at its key TurboTax service. Ether edges lower amid some profit-taking after U.S. securities regulators approve rule changes supporting the creation of exchange-traded funds tied to the world's second-biggest cryptocurrency.

1. Futures muted

U.S. stock futures were treading water on Friday after equities fell in the prior session despite blowout earnings from artificial intelligence-darling Nvidia (NASDAQ:NVDA).

By 03:35 ET (07:35 GMT), the S&P 500 futures contract, Nasdaq 100 futures and Dow futures were all mostly unchanged.

The major averages on Wall Street ended the prior session lower, as enthusiasm over a better-than-expected spike in quarterly revenue from AI chipmaker Nvidia was tempered by data showing that the number of Americans filing for first time job benefits was less than anticipated. The figures pointed to resilience in the U.S. labor market, exacerbating some concerns that Federal Reserve policymakers could delay possible upcoming interest rate reductions.

At the close of trading on Thursday, the benchmark S&P 500 had shed 0.7%, the tech-heavy Nasdaq Composite had slipped by 0.4%, and the 30-stock Dow Jones Industrial Average had dipped by 1.5%.

2. Intuit shares slip amid worries over loss of free TurboTax users

Intuit posted fiscal third quarter results that topped analysts expectations, but shares in the group slumped in extended hours trading as investors fretted over a loss of free users at its all-important TurboTax tax-preparation service.

The firm behind personal finance portal Credit Karma and accounting software QuickBooks announced quarterly earnings per share of $9.88 on revenue of $6.74 billion. The numbers beat Wall Street estimates of $9.38 and $6.65 billion, respectively, in a sign that users were reacting postively to investments in AI and enhanced tax filing services.

However, the number of people using TurboTax's free offering during the three months ended on April 30, which includes tax filing season in the U.S., dipped by about 1 million versus the year-ago period. Analysts flagged concerns that TurboTax may be struggling to attract higher-end customers while also facing increased competition for lower-end users.

3. SEC approves applications to list spot Ether ETFs

The U.S. Securities and Exchange Commission has approved rule changes backing the creation of exchange-traded funds linked to Ether, paving the way for the potential launch of eight such funds.

Thursday's decision marked some progress towards the eventual approval of a spot ETF for trade, although the SEC has to now engage with applications from fund managers to list a spot ETF. Applicants include VanEck, ARK Investment Management and seven other issuers.

Rumblings of the SEC’s approval had boosted Ether prices throughout the week, with the actual event sparking fleeting gains in the token.

On Friday, Ether, the world's no. 2 digital token, had slipped by 2.8% to $3,684.11 by 03:26 ET amid some profit-taking.

4. Nvidia cuts China AI chip prices - Reuters

Nvidia has been pushed into selling artificial intelligence chips in China at heavy discounts due to stiff competition from local players, specifically Huawei, Reuters reported on Friday.

The California-based firm previously launched three AI chips tailor-made for China last year, as U.S. sanctions prevented it from selling its most advanced AI chips in the country.

Among the three, the H20, which is the most powerful, has been hit by subdued demand in China, and in some cases, was being sold at an over 10% discount to a similar offering from Huawei, the Reuters report said.

Huawei's Ascend 910B chip was also seeing substantially more orders than the H20 from state-backed enterprises, Reuters said, citing limited government data. This came after a mandate from Beijing for state enterprises to use China-made silicon.

5. Crude heading for weekly falls

Crude prices were lower on Friday, heading for hefty weekly losses as indications of sticky inflation and high interest rates spurred on concerns over economic activity in the U.S., the world's top oil consumer.

By 03:36 ET, the U.S. crude futures (WTI) had fallen 0.4% to $76.60 per barrel, while the Brent contract had dropped 0.3% to $81.13 a barrel.

Both contracts were on track to post weekly losses of more than 3%, with Brent at its weakest level in two months, while WTI was at a three-month low.

All eyes are now on the next meeting of the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, at the start of June. The group of producers is expected to discuss whether to extend voluntary oil output cuts of 2.2 million barrels per day.

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