US Stock Market Faces Decline as Bleak Intel Outlook Casts Shadow on Tech Sector

On Friday, the US stock market saw a downturn as a result of a less optimistic outlook from Intel, creating anticipation around a crucial inflation report that may influence the timing of an interest rate cut.

S&P 500 futures slipped after a positive Thursday, where the benchmark reached another record high. Dow Jones Industrial Average futures also remained below the line, while Nasdaq 100 futures, representing the tech-heavy sector, experienced a nearly 0.3% decline.

Tech stocks took a hit as Intel's first-quarter outlook fell significantly short of Wall Street expectations, casting a shadow on the optimism that propelled stocks to record levels. In premarket trading, Intel shares plummeted over 10%, with AMD and Nvidia also witnessing a slight dip.

Investor attention is now focused on the release of the December PCE index, as a preliminary reading on fourth-quarter economic growth exceeded expectations. This could potentially support arguments for the Federal Reserve to delay rate cuts beyond March in their pursuit of achieving a "soft landing" for the economy.

Moreover, the GDP report's insight into quarterly PCE suggests that inflation is trending favorably for the Fed. The upcoming monthly update is anticipated to reveal that annual "core" PCE, excluding food and energy, stands at 3%.

Simultaneously, investors eagerly await the next set of earnings reports, providing further clarity on the health of Corporate America and the overall economy. Notable highlights on Friday include Colgate-Palmolive and American Express, particularly following Visa's conservative revenue-growth forecast in the payment card sector.

Also Read: Tesla Stock Faces 9% Dip on Q4 Earnings Shortfall and Lowered Production Growth Forecast