U.S. stock futures traded close to unchanged on Friday as investors assessed softer inflation data, a fresh round of technology earnings and renewed volatility across semiconductor shares.
Applied Materials (NASDAQ:AMAT) issued stronger-than-expected fourth-quarter revenue guidance but still came under pressure as investors weighed the outlook against already elevated expectations for companies exposed to the artificial intelligence boom.
Meanwhile, Semiconductor Manufacturing International Corp posted a sharp improvement in second-quarter revenue and profit, sending its shares higher and providing support to the wider Asian semiconductor sector.
U.S. futures remain subdued
By 03:18 ET (07:18 GMT), Dow futures were down 72 points, or 0.1%, while futures linked to the S&P 500 and Nasdaq 100 were broadly unchanged.
Wall Street’s major indices had posted solid gains on Thursday, helped by another batch of encouraging results from businesses benefiting from growing AI investment.
Vital Knowledge analysts noted that some companies, including Cisco Systems and Cerebras Systems, saw their shares decline despite quarterly results as investors held them to demanding expectations. Management commentary across the sector, however, remained relatively constructive on the economic backdrop.
Sandisk (NASDAQ:SNDK) also delivered an upbeat longer-term outlook linked to AI demand during an analyst event. The memory chip producer forecast revenue growth in the mid-to-high teens percentage range between fiscal 2028 and 2030.
Investor expectations for monetary policy were also shifting after annual U.S. producer price inflation slowed in July, adding to expectations that the Federal Reserve could leave interest rates unchanged at its September meeting rather than raise borrowing costs.
Applied Materials falls despite upbeat revenue guidance
Applied Materials forecast fourth-quarter revenue above market expectations as the semiconductor equipment supplier continues to benefit from investment in AI infrastructure.
Growing demand for advanced processors has increased the need for both additional silicon wafers and more sophisticated manufacturing equipment, supporting companies that supply chip fabrication tools.
Applied Materials said fourth-quarter revenue is expected to be approximately $10.25 billion, plus or minus $500 million. The company also plans to increase manufacturing capacity to meet strong customer demand.
Despite the positive guidance, Applied Materials shares fell more than 5% in extended trading. As with several other AI-related companies this week, the strong outlook struggled to exceed the increasingly high expectations already reflected in Wall Street forecasts.
SMIC surges after strong second-quarter performance
Semiconductor Manufacturing International Corp rallied after reporting substantial year-on-year growth in both second-quarter revenue and earnings.
Revenue increased 36.1% to $3.01 billion in the three months ended June, while profit attributable to shareholders jumped 261.7% to $479.2 million.
Gross margin improved to 25.3% from 20.4% a year earlier, supported by higher average selling prices and a more favourable product mix. Wafer shipments increased 20.1%, while capacity utilisation rose to 93.7% from 92.5%.
For the third quarter, SMIC expects revenue to increase between 2% and 4% sequentially, with gross margin forecast at 26% to 28%.
The company said momentum associated with AI and related industrial demand should continue supporting semiconductor manufacturing requirements during the second half of the year. It also plans to accelerate qualification of newly added production capacity.
Oil rises as Hormuz uncertainty supports risk premium
Crude oil prices advanced on Friday and were heading towards their first weekly increase in three weeks as uncertainty surrounding the U.S.-Iran conflict and Persian Gulf supply routes continued to support a geopolitical premium.
Brent crude futures gained 1.6% to $88.43 a barrel, while U.S. West Texas Intermediate crude rose 1.9% to $82.72 by 03:36 ET. Both benchmarks were up around 5% for the week.
Some of the week’s gains were limited after major industry organisations reduced their oil demand forecasts, while a larger-than-expected increase in U.S. crude inventories added further pressure.
Uncertainty over shipping through the Strait of Hormuz remained a central concern, with Washington and Tehran making conflicting claims over control of the strategic waterway.
U.S. Treasury Secretary Scott Bessent added to geopolitical concerns after saying Washington would impose “measures like have never been seen in the history of economic isolation on a country.”
Workday jumps on reported Silver Lake takeover talks
Workday (NASDAQ:WDAY) shares surged 25% on Thursday following a Reuters report that private equity firm Silver Lake is discussing a potential acquisition of the human resources and financial management software company.
According to the report, the two sides have held talks in recent months, although discussions remain ongoing and there is no certainty that a transaction will be completed.
A takeover could value Workday above its roughly $43 billion market capitalisation and potentially rank among the largest software buyouts ever completed.
The company’s shares had fallen around 15% since the beginning of the year and more than 40% from their 2024 peak before the takeover report emerged.
Reuters reported that neither Silver Lake nor Workday responded to requests for comment.