Futures Dip After Wall Street Rally, Nike CEO to Resign

US stock futures experienced a slight decrease on Friday following a remarkable rally on Wall Street in the previous session. Investor interest in technology shares and other riskier assets was heightened by the Federal Reserve’s significant interest rate cut earlier in the week. Additionally, recent jobless claims data raised hopes that the lower borrowing costs would bolster labor demand without triggering inflationary pressures. Meanwhile, the Bank of Japan opted to maintain its interest rates, and Nike announced the upcoming resignation of its Chief Executive, John Donahoe.

1. Futures Decline

US stock futures dipped on Friday after Wall Street achieved record highs, fueled by a major interest rate cut from the Federal Reserve. By 03:19 ET, futures for the Dow had decreased by 32 points or 0.1%, the S&P 500 was down by 10 points or 0.2%, and the Nasdaq dropped by 49 points or 0.2%.

On Thursday, primary market indices had surged following the Fed’s decision to implement a 50-basis point reduction in interest rates, marking the start of an easing cycle. The Dow gained 95 points or 1.7%, the tech-heavy Nasdaq rose by 441 points or 2.5%, and the S&P 500 moved up by 522 points or 1.3%.

Investor sentiment was further bolstered by data indicating that weekly jobless claims had fallen to a four-month low. The numbers were also below economists’ estimates, enhancing optimism that lower interest rates could stabilize employment without reigniting inflation. Following the data release, US government debt saw a sell-off, leading to an increase in benchmark 10-year Treasury yields.

Analysts from Vital Knowledge commented that fundamental news continues to favor the stock market, highlighting disinflation, resilient growth, interest rate cuts, and solid corporate performance as sustaining factors for stock prices.

2. Central Bank Decisions in Asia

The Bank of Japan announced it would keep interest rates unchanged, a decision that was widely anticipated, and upgraded its consumption outlook, signaling continued moderate growth in the Japanese economy.

The BOJ maintained its short-term interest rate at 0.25%, with unanimous support from its rate-setting board. This decision aligns with market expectations as the BOJ takes a cautious approach after two rate increases earlier this year. However, the central bank mentioned “high uncertainties” concerning Japanese economic activity and pricing, suggesting that fluctuations in foreign exchange markets could influence local prices more significantly than in the past.

In a similar vein, the People’s Bank of China decided to keep its loan prime rate steady, although market watchers expect further reductions amid the country’s weak economic conditions.

3. Nike CEO to Depart

Nike’s shares rose in after-hours trading following the announcement that Chief Executive John Donahoe would step down from his role next month. He will be succeeded by Elliott Hill, a veteran of more than 30 years at Nike, who previously served as the president of its consumer and marketplace unit from 2018 to 2020. Hill will assume the role on October 14.

In his statement, Donahoe expressed that the time was right for a leadership transition, asserting that Hill is the ideal candidate for the position. The move comes as Nike faces increased competition from brands such as On and Hoka. The company had previously issued a sales warning for its core products, causing its stock price to decline by 20% at that time. Analysts have questioned Donahoe’s suitability for leading a consumer products company, given his background in the technology sector.

4. FedEx Lowers Annual Guidance

FedEx saw its shares drop in after-hours trading following a reduction in its annual guidance and the disclosure of first-quarter earnings that fell short of analysts’ forecasts. For fiscal 2025, FedEx narrowed its adjusted earnings per share outlook to a range of $20.00 to $21.00, down from a previous range of $20.00 to $22.00. The firm now expects revenue growth for the year to be in the low single digits year-over-year, compared to an earlier forecast of low-to-mid single-digit percentage increases.

The logistics company reported adjusted earnings of $3.60 per diluted share on revenue of $21.6 billion, falling short of analysts’ expectations of $4.86 in EPS on revenue of $21.96 billion. The FedEx segment noted a decrease in margins to 5.2% for the first quarter, down from 7.1% a year earlier.

5. Oil on Track for Second Straight Weekly Gain

Crude oil prices saw a slight decline on Friday but remained poised for a second consecutive weekly gain after the recent significant cut in US interest rates alleviated some concerns about diminishing demand. By 03:18 ET, futures for crude dropped 0.4% to $74.60 per barrel, while West Texas Intermediate (WTI) futures fell 0.3% to $70.93.

These benchmarks have been regaining strength after dipping to nearly three-year lows on September 10, having recorded gains in five of the last seven sessions, with over 4% advancement this week. Official government data indicated that crude inventories in the US, the largest global producer, fell to a one-year low last week, although additional increases were tempered by ongoing worries about slowing demand, particularly from major importer China.