Upbeat Intel Earnings, Pullback By Oil Prices May Generate Early Buying Interest

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Friday, with stocks likely to regain ground following the sell-off seen in the previous session.

A positive reaction to earnings news from Intel (INTC) may contribute to an early rebound on Wall Street, as the semiconductor giant surges by 3 percent in pre-market trading.

The jump by Intel comes after the company reported better than expected second quarter earnings on its strongest revenue growth in fifteen years. Intel also provided upbeat third quarter guidance.

Early buying interest may also be generated in reaction to a sharp pullback by the price of crude oil, with U.S. crude oil futures plunging by more than 3 percent after soaring by more than 6 percent on Thursday.

The steep drop by the price of crude oil comes despite the continued exchange of attacks between the U.S. and Iran.

After the United States launched its 13th consecutive night of strikes on Iranian targets, Tehran retaliated with missile attacks targeting neighboring Arab countries hosting U.S. military bases.

However, traders may be somewhat reluctant to get back into the markets amid renewed concerns about tariffs.

The Trump administration announced it is imposing tariffs on 60 economies for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.

The tariffs, ranging from 10 percent to 12.5 percent, would impact major economies like the European Union, the U.K., China, India, Japan and Canada. The measures replace a temporary 10 percent global tariff that expires today. After ending Wednesday's choppy session modestly lower, stocks showed a more substantial move to the downside during trading on Thursday. The major averages all moved notably lower, with the tech-heavy Nasdaq showing a particularly steep decline.

The major averages ended the day off their lows of the session but still firmly negative. The Nasdaq plunged 553.21 points or 2.2 percent to 25,137.69, the S&P 500 tumbled 90.66 points or 1.2 percent to 7,408.30 and the Dow slumped 506.93 points or 1 percent to 51,711.65.

The sell-off on Wall Street partly reflected a negative reaction to earnings news from tech giants Tesla (TSLA) and Alphabet (GOOGL).

Electric vehicle maker Tesla plummeted by 14.5 percent after reporting weaker than expected second quarter earnings along with a surge in capital spending.

Shares of Alphabet also plunged by 7.1 percent after the Google parent reported better than expected second quarter results but raised its capital spending forecast.

Selling pressure was also generated in reaction to a sharp increase by the price of crude oil, with U.S. crude oil futures soaring by more than 6 percent and jumping back above $90 a barrel.

The spike by crude oil prices came after Yemen's Houthis claimed they had attacked two Saudi oil tankers in the Red Sea for violating their maritime blockade.

President Donald Trump said in a post on Truth Social that the U.S. would hold Iran responsible if the militant group continues the attacks.

The continued surge by the price of crude oil has added to recent concerns about the outlook for inflation and the possibility of higher interest rates.

"With nerves about the potential inflationary impact of the escalating conflict in the Middle East colliding with worries about soaring tech capex it's been tough to find the optimism," said Danni Hewson, AJ Bell head of financial analysis.

"It's worth remembering that at the start of the month the price was hovering around $70 a barrel and markets had dared to hope that central bankers might be able to seamlessly shift from a pause to further cuts," she added.

In U.S. economic news, the Labor Department released a report showing first-time claims for unemployment benefits unexpectedly decreased in the week ended July 18th.

The report said initial jobless claims fell to 187,000, a decrease of 22,000 from the previous week's revised level of 209,000.

Economists had expected jobless claims to rise to 212,000 from the 208,000 originally reported for the previous week.

With the unexpected decrease, jobless claims dropped to their lowest level since hitting 182,000 in the week ended September 6, 1969.

Airline stocks moved sharply lower on the day, dragging the NYSE Arca Airline Index down by 3.3 percent to its lowest closing level in well over a month.

American Airlines (AAL) helped lead the sector lower, plummeting by 8.4 percent after reporting better than expected second quarter results but cutting its full-year profit outlook.

Substantial weakness was also visible among retail stocks, with the Dow Jones U.S. Retail Index plunging by 2.6 percent to a three-month closing low.

Software, gold and telecom stocks also saw considerable weakness, while biotechnology, pharmaceutical and healthcare stocks bucked the downtrend.

Commodity, Currency Markets

Crude oil futures are tumbling $2.71 to $89.48 a barrel after soaring 5.36 to $92.19 a barrel on Thursday. Meanwhile, after plunging $101.70 to $4,050.20 an ounce in the previous session, gold futures are rising $10.60 to $4,060.80 an ounce.

On the currency front, the U.S. dollar is trading at 163.81 yen versus the 163.85 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1369 compared to yesterday's $1.1376.

Asia

Asian stocks declined on Friday as surging oil prices amid escalating Middle East tensions fueled concerns over energy-driven inflation.

Adding fresh uncertainty to an already shaky global economy, the Trump administration said that it would impose higher tariffs on goods from 60 trading partners, citing forced labor concerns.

The tariffs, ranging from 10 percent to 12.5 percent, would impact major economies like the European Union, the U.K., China, India, Japan and Canada. The measures replace a temporary 10 percent global tariff that expires today.

Intel's stronger-than expected second quarter revenue and upbeat guidance for the third quarter offered only fleeting support in the face of broader worries about the economic outlook, consumer spending and corporate earnings.

The U.S. dollar remained weak despite rising bond yields. Gold was little changed at $4,046 an ounce after falling nearly 2 percent in the previous session.

Brent crude futures tumbled nearly 2 percent but were on track for a 12 percent weekly gain amid heightened fears of global supply disruptions.

After the United States launched its 13th consecutive night of strikes on Iranian targets, Tehran retaliated with missile attacks targeting neighboring Arab countries hosting U.S. military bases.

Iran said it targeted U.S. missile systems, weapons depots and fuel storage facilities in Jordan, along with American military positions in Kuwait.

China's Shanghai Composite Index slumped 1.6 percent to 3,814.20 amid concerns over inflation and market liquidity.

It is feared that the upcoming listing of memory chip manufacturer CXMT could pull cash from the equity market. Hong Kong's Hang Seng Index fell 1 percent to 24,963.23.

Japanese markets tumbled as surging oil prices revived inflation fears. Data showed earlier in the day that Japan's core inflation rate rose to 1.6 percent in June but stayed below the BOJ's 2 percent target.

The U.S. Treasury Department has warned against excessive yen volatility, keeping the Bank of Japan on course for another interest-rate hike this year.

The Nikkei 225 Index tumbled 2.7 percent to 64,611.15 as technology stocks nosedived on concerns over whether heavy spending on AI infrastructure is sustainable. The broader Topix Index settled 1.1 percent lower at 4,011.31.

Among the prominent decliners, Tokyo Electron, Advantest, SoftBank Group and Kioxia Holdings slumped 5-9 percent.

Seoul stocks plummeted after U.S. President Trump threatened to launch a "massive attack" on Iran that could be "bigger than ever before." Investor sentiment was also hit by concerns that the semiconductor super cycle may have passed its peak.

The Kospi Index plunged 5.7 percent to 6,690.62, with Hyundai Motor, Samsung Electronics and SK Hynix plummeting 7-8 percent.

Australian markets ended notably lower amid rising inflation fears and ahead of the crucial earnings season kicking off next week.

The benchmark S&P/ASX 200 Index dropped 0.8 percent to 8,772.30, while the broader All Ordinaries Index fell 0.9 percent to 8,941.50.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.2 percent to 13,772.29.

Europe

European stocks have rebounded on Friday after suffering their steepest single-day loss in over two weeks amid elevated oil prices and concerns over heavy AI spending.

Traders bought the dip as Brent crude futures slumped nearly 4 percent after rising above $100 a barrel on Thursday following Houthi attacks on tankers in the Red Sea.

The British pound strengthened against the dollar and euro after official data showed U.K. retail sales grew unexpectedly in June.

Retail sales increased 1.0 percent in June, following a rise of 1.2 percent in May as warm weather boosted outdoor product sales. Economists had forecast sales to fall 0.3 percent in the month.

On a yearly basis, retail sales increased 4.2 percent from the previous year, faster than the 3.5 percent increase seen in May.

While the German DAX Index is up by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.4 percent.

British polymer producer Victrex rose nearly 2 percent after announcing management changes.

HSBC Holdings advanced 1.3 percent after the lender agreed to sell its Singapore life and health insurance business to Allianz.

DiscoverIE Group skyrocketed 13 percent. The customized electronics designer and manufacturer said that orders surged 31 percent organically and sales rose 6 percent year-on-year in Q1.

Precision engineering group Renishaw rallied 6.6 percent. The company said it expects annual profit to come in ahead of expectations.

German enterprise software giant SAP jumped 6 percent after posting higher revenue in its latest quarter.

Workforce management software company ATOSS Software surged 4.3 percent on reporting increased revenue and profit in the second quarter.

Automaker Volkswagen dropped 1 percent after reporting weaker-than-expected second-quarter profit and cutting its sales and car delivery forecasts for the year.

Swedish lock and access solutions group Assa Abloy gained 1 percent after it acquired Classic Brass Inc in the United States.

Securitas plummeted 11 percent after the security services company reported lower-than-expected second-quarter core profit.

France's Sanofi fell 2.2 percent after it decided to stop the clinical development of amlitelimab for moderate-to-severe atopic dermatitis following mixed phase 3 trial results.

U.S. Economic News

The Commerce Department is scheduled to release its report on new home sales in the month of June at 10 am ET. New home sales are expected to surge by 5.2 percent to an annual rate of 610,000 in June after plunging by 7.3 percent to an annual rate of 580,000 in May.