NEW YORK — U.S. stock futures pointed modestly higher in pre-market trading Friday following the largest single-stock earnings beat of the week and a late-Thursday breakthrough in semiconductor export policy out of the Trump-Xi summit in Beijing, with Applied Materials Inc.‘s blowout fiscal second-quarter results and reports that the U.S. Department of Commerce has cleared Nvidia Corp. to ship H200 AI chips to 10 Chinese companies setting up the AI-driven rally to test fresh record highs after Thursday’s closes on the S&P 500 at 7,501.24 (+0.77%), the Nasdaq Composite at 26,635.22 (+0.88%), and the Dow Jones Industrial Average at 50,063.46 (+0.75%). Adding to the catalyst stack: Friday marks Jerome Powell‘s final day as Federal Reserve Chair after the Senate confirmed Kevin Warsh on Wednesday’s party-line 51-49 vote to succeed him, with Warsh expected to take the gavel May 19 or 20.
The single most consequential corporate print this week came after Thursday’s bell. Applied Materials, the world’s largest maker of semiconductor manufacturing equipment, reported record revenue of $7.91 billion against a Bloomberg consensus of $7.65 billion, with adjusted earnings of $2.86 per share well ahead of the $2.66 to $2.68 Street estimate. The company guided third-quarter revenue to $8.95 billion plus or minus $500 million against an $8.15 billion consensus, with adjusted EPS guided to $3.36 versus a $2.88 estimate — one of the largest forward-guidance beats of the AI capex era. President and Chief Executive Gary Dickerson raised the company’s outlook for industry-wide semiconductor equipment growth to “more than 30 percent in calendar 2026,” up from “over 20 percent” in February. CFO Brice Hill told analysts on the call that “the growth in AI that Applied has been investing for is now in full force” and that the company is tracking more than 100 global factory projects, having added more than 10 new projects in the latest quarter alone. AMAT shares rose roughly 4% in after-hours trading. Citi’s Atif Malik maintains a $520 price target. B. Riley Securities analyst Craig Ellis carries a $485 target.
The semiconductor-equipment readthrough lifts the entire AI capex stack heading into Friday’s open. Lam Research Corp., KLA Corp., ASML Holding NV, and Tokyo Electron Ltd. are the most direct beneficiaries of an industry-wide 30% growth ramp. Micron Technology Inc. and SanDisk Corp., both of which have already been on a tear in May, get further validation of HBM memory demand. Nvidia, Advanced Micro Devices Inc., and Broadcom Inc. all gain from the implied capacity coming online to manufacture next-generation chips. Nvidia specifically faces a second pre-market catalyst: the Commerce Department’s approval for shipping H200 chips to Alibaba Group Holding Ltd., Tencent Holdings Ltd., and eight other Chinese technology firms — a major reversal of the Biden-era export-control posture that Nvidia CEO Jensen Huang has been lobbying against for more than a year. Huang joined President Trump’s delegation to Beijing for the summit. Nvidia shares gained 4.4% Thursday on the news.
Friday’s macro calendar is comparatively light but consequential. The New York Fed‘s Empire State Manufacturing survey for May hits at 8:30 a.m. Eastern. Industrial Production and Capacity Utilization for April are released at 9:15 a.m. The week’s most-watched print is the preliminary University of Michigan Consumer Sentiment survey for May at 10:00 a.m., which includes the closely tracked one-year and five-to-ten-year inflation-expectations subindexes — readings that take on outsized significance after Wednesday’s hot April Producer Price Index report showed wholesale prices up 1.4% month-over-month and 6.0% year-over-year, the largest monthly jump in four years. Boston Fed President Susan Collins said earlier this week that a rate hike “could be in the cards,” and any acceleration in Michigan inflation expectations would steepen that line.
The political backdrop continues to drive cross-asset volatility. President Donald Trump and Chinese President Xi Jinping wrap up the Beijing summit Friday, with markets watching for the closing readout on the announced $30 billion tariff rollback in non-critical categories, the 200-jet Boeing Co. order that disappointed Wall Street Thursday, and any joint statement on AI guardrails or rare-earth supply security. Powell chairs his final FOMC in posture only — no meeting is scheduled — but his term technically ends at midnight Friday. Warsh, viewed by markets as marginally more open to rate cuts than the current committee but unlikely to deliver them without softer inflation data, takes office early next week. The Iran war continues to dominate the energy market, with WTI crude closing Thursday at $102 a barrel, Brent at roughly $117, and the Strait of Hormuz expected to remain effectively closed through late May according to the U.S. Energy Information Administration’s most recent Short-Term Energy Outlook published Monday.
Pre-market earnings reports Friday morning include Flowers Foods Inc. (FLO), RBC Bearings Inc. (RBC), H World Group Ltd. (HTHT), Xpeng Inc. (XPEV), RLX Technology Inc. (RLX), Alumis Inc. (ALMS), and Arrivent Biopharma Inc. (AVBP). Cerebras Systems Inc. — which closed its IPO debut at $311.07 Thursday, valuing the AI chip startup at roughly $95 billion — will be watched closely as the post-IPO lockup dynamics and price discovery continue. Boeing, off 4.7% Thursday on the disappointing China deal, will be watched for a Friday bounce or follow-through selling. Honda Motor Co. Ltd. ADRs will react to Thursday’s announcement of the carmaker’s first-ever annual loss and the abandonment of its U.S. EV strategy.
The risks into the open are stacked. The Nasdaq Composite’s Relative Strength Index is at a multi-year high and chip names have ripped in May, leaving the rally vulnerable to even modest profit-taking. Any walk-back of the China H200 approval or summit-deal language would hit semis hard. A Michigan consumer-sentiment inflation-expectations spike would tighten the Fed setup before Warsh has even taken office. The bull case is straightforward: AMAT’s 30% industry-growth guide validates the AI capex thesis, Nvidia’s China access removes the single largest overhang on the most-owned stock in the market, summit headlines stay clean, and the Hormuz picture eases by late May per EIA. Friday’s session will tell which of those scenarios the tape is pricing.
— JBizNews Desk
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