Futures fall after Wall Street rally, Nike CEO to resign

Investing.com — U.S. stock futures fell on Friday after a furious rally to record highs on Wall Street in the previous session. Appetite for tech stocks and other risky assets was piqued by the Federal Reserve’s huge interest rate cut earlier in the week, while fresh jobless claims data supported hopes that lower borrowing costs would support job demand without fueling price pressures. Meanwhile, the Bank of Japan is holding interest rates steady and NIKE (NYSE: ) announces the upcoming departure of Chief Executive Officer John Donahoe.

1. Futures decrease

U.S. stock futures fell on Friday after Wall Street stocks, buoyed by a huge Federal Reserve interest rate cut, hit record highs in the previous session.

By 03:19 ET (0719 GMT), the contract was down 32 points, or 0.1 percent, down 10 points, or 0.2 percent, and down 49 points, or 0.2 percent.

The main Wall Street averages rose on Thursday, boosted by the Fed’s decision to launch an unusually large 50 basis point cut in borrowing costs and signal the start of an easing cycle. The benchmark gained 95 points, or 1.7 percent, the tech-heavy added 441 points, or 2.5 percent, and the 30-stock advanced 522 points, or 1.3 percent.

Sentiment was also bolstered by data showing weekly jobless claims fell to a four-month low. The figures, which were also below economists’ estimates, fueled hopes that interest rate cuts will keep a lid on unemployment without triggering a resurgence of inflation. US government debt sold off following the data, pushing benchmark 10-year Treasury yields higher.

“(F)or now, the fundamental news feed is still favorable (disinflation, resilient growth, rate cuts and healthy corporate performance), which should keep the stock underbid,” analysts at Vital Knowledge said in -a note for customers.

2. Central bank decisions in Asia

The Bank of Japan left interest rates unchanged on Friday, as widely expected, and upgraded its outlook for consumption, in a sign it continues to expect moderate growth in the Japanese economy.

The BOJ kept its key short-term rate at 0.25%, with all nine members of the rate-setting board backing hold. The decision was in line with market expectations, with the BOJ inclined to take a wait-and-see approach after raising borrowing costs twice so far this year.

But the central bank still signaled “large uncertainties” about Japanese economic activity and prices and said volatility in currency markets could affect local prices more than in the past.

Elsewhere, the People’s Bank of China has kept its key lending rate (LPR) steady but is expected to eventually cut it further amid weak recent economic conditions in the country.

The PBOC kept its one-year LPR at 3.35 percent, while the five-year LPR, which is used to determine mortgage rates, was unchanged at 3.85 percent.

3. Nike’s CEO will resign

Nike shares rose in extended trading hours after the athletic apparel firm announced that Chief Executive John Donahoe will step down next month.

Donahoe will be replaced by Elliott Hill, who previously spent more than three decades at Nike in various senior leadership roles, including a stint as president of its consumer and market unit from 2018 to 2020. Hill will take over the company on October 14.

In a statement, Donahoe said: “It became clear that now was the time to make a change in leadership, and Elliott is the right person. I look forward to seeing the future successes of Nike and Elliott.”

The announcement comes after Nike has seen its market share eroded by new competitors such as On and Hoka. In June, the group issued a sell-off warning for its core products, sending the share price down 20% at the time.

Wall Street analysts questioned whether Donahoe, a former tech industry executive who ran eBay (NASDAQ: ) and ServiceNow (NYSE: ), was the right fit to lead a consumer goods brand.

4. FedEx (NYSE: ) cuts annual guidance

Shares of FedEx sank in extended trading hours after the logistics group cut its full-year guidance and reported fiscal first-quarter earnings that were well below Wall Street expectations.

For fiscal 2025, the company lowered its outlook for adjusted earnings per share (EPS) to a range of $20.00 to $21, down from $20.00 to $22.00 previously. Revenue growth for the year was now expected to come in at a low single-digit percentage year-over-year, compared to earlier forecasts of low-to-mid single-digit percentage growth.

FedEx reported adjusted earnings of $3.60 per diluted share on revenue of $21.6 billion. Analysts polled by Capital IQ were expecting EPS of $4.86 on revenue of $21.96 billion.

Federal Express, a key segment, saw margins slip to 5.2 percent in the first quarter from 7.1 percent a year earlier.

5. Oil on pace for second straight weekly gain

Crude oil prices fell on Friday but were on track for a second week in a row after a sharp drop in U.S. interest rates helped ease some fears of slowing demand.

By 03:18 ET, the contract was down 0.4% at $74.60 a barrel, while WTI futures traded 0.3% lower at $70.93 a barrel. barrel.

The benchmark recovered from a near three-year low on Sept. 10 and has posted gains in five of the seven sessions since then, including gains of more than 4 percent this week.

U.S. crude stockpiles, the world’s top producer, fell to a one-year low last week, according to official government data from earlier this week, but higher gains were capped by lingering concerns about slowing demand, in especially in China, the top importer.