The Market News Today: Wall Street Lower as American Airlines Tumbles, Robinhood Jumps

Stock Futures Dip Despite Nasdaq Record; American Airlines Slashes Outlook

Stock futures declined following Nasdaq’s record high. American Airlines plummeted 6% post-hours on slashed sales outlook, dragging JetBlue and Southwest down. Robinhood rose 3% with a $1B share buyback announcement. Nasdaq surged fueled by Nvidia, contrasting S&P 500’s marginal rise and Dow’s dip. May sees impressive gains despite lowered Fed rate cut expectations. Investors await April’s personal income report for PCE inflation.

HubSpot Soars on Potential Google Deal Talks

HubSpot shares rallied 8% on Tuesday after CNBC’s David Faber reported that Alphabet is looking at an all-stock offer for the software company. Reports of a potential deal first surfaced in early April, when Reuters published a story saying Alphabet was talking to advisors about making an offer for HubSpot. Bloomberg followed with a story earlier this month, indicating that talks were progressing. With a market cap of about $33 billion, after Tuesday’s jump, HubSpot would be by far Alphabet’s largest deal ever. HubSpot shares were up slightly for the year prior to Tuesday’s gains, closing the day at $638.39. The stock doubled in value in 2023.

American Airlines Cuts Sales Outlook, Ousts Chief Commercial Officer

American Airlines reduced its second-quarter revenue forecast by up to 6%, attributing the decline to weaker unit revenues. The company also adjusted its earnings estimate to $1-$1.15 per share. CEO Robert Isom will discuss a new ticket distribution strategy aimed at boosting direct bookings. The move follows recent financial underperformance compared to rivals Delta and United Airlines. American Airlines terminated its chief commercial officer, Vasu Raja, amid internal discussions.

U.S. Treasury Yields Rise on Weak Auction, Economic Outlook

U.S. Treasury yields increased as investors reacted to a lackluster $70 billion 5-year note auction, with the bid-to-cover ratio falling below the 10-auction average. Market participants awaited key economic data, including the personal consumption expenditures price index, to gauge the Federal Reserve’s next moves. Fed officials, including Minneapolis Fed President Neel Kashkari, expressed caution, emphasizing the need for sustained inflation growth before considering rate cuts. Uncertainty looms as recent Fed minutes highlighted ambiguity regarding future rate adjustments.

Oil Prices Gain on Expectations of OPEC+ Production Cuts, Summer Demand

Oil prices edged up on Wednesday as traders anticipated OPEC+ to uphold production cuts amid rising summer demand. Brent crude futures increased to $84.49 a barrel, while U.S. West Texas Intermediate futures rose to $80.18. The Memorial Day holiday marked the onset of peak demand in the U.S., supporting prices. Concerns over escalating conflict in the Gaza Strip and anticipation of U.S. crude inventory data also influenced market sentiment. Investors monitored U.S. inflation data for potential impacts on Federal Reserve rate decisions.