Futures fall, DOJ looks into Google breakup, Rio-Arcadium deal

Investing.com — Stock futures fell on Wednesday after a technology-led rally in stocks in the previous session. The U.S. Department of Justice is looking into a possible breakup of search titan Google (NASDAQ: ) in a federal court filing. Rio Tinto (NYSE: ) has agreed to a $6.7 billion acquisition of U.S. company Arcadium Lithium, signaling the miner’s desire to improve its position ahead of an anticipated surge in demand for electric vehicles.

1. Futures decrease

U.S. stock futures pointed higher on Wednesday after a positive session on Wall Street.

By 03:30 ET (0730 GMT), the contract was trading up 94 points, or 0.2 percent, down 18 points, or 0.3 percent, and down 87 points, or 0.4 percent.

Major indexes ended Tuesday buoyed by hopes that the Federal Reserve is on track to create a so-called “soft landing” for the U.S. economy, in which price pressures are dampened without triggering a sharp drop in job demand or activity more extensive. Investors will have a chance to analyze new inflation data later in the week.

Tech stocks did most of the “heavy lifting” for gains, analysts at Vital Knowledge said in a note to clients. Artificial intelligence darling Nvidia (NASDAQ: ) notably rose 4%, while peer Broadcom (NASDAQ: ) rose 3%.

2. The US Department of Justice is looking into the potential breakup of Google

The US Justice Department is considering possible sanctions against Alphabet-owned Google, including a breakup of the search giant, following a landmark antitrust case that found the group guilty of abusing its dominant market position.

The DOJ is “considering behavioral and structural remedies” that would prevent Google from using products like its web browser, app store or operating system to give its search business an advantage over its competitors, according to a federal court filing from Tuesday. Officials also suggested that Amit Mehta, the US judge presiding over the case, could force Google to reveal the underlying data used to build its search engine and artificial intelligence products.

“For more than a decade, Google has controlled the most popular distribution channels, leaving rivals with little or no incentive to compete for users,” the DOJ added.

Google responded in a blog post, warning that the proposal could have harmful effects on both “American innovation and American consumers.”

The DOJ filing comes after Mehta said in August that the tech giant was a “monopoly,” arguing that it paid companies like phone makers and web browser operators billions of dollars to make Google the default search option.

3. Rio Tinto agrees to acquire Arcadium Lithium for $6.7 billion

Global miner Rio Tinto has agreed to acquire US peer Arcadium Lithium in a $6.7 billion cash deal, according to a statement on Wednesday.

Rio Tinto said the deal would see it buy Pennsylvania-based Arcadium for $5.85 a share, representing a 90 percent premium to Arcadium’s Oct. 4 closing price.

The move will bring Arcadium’s lithium unit into Rio Tinto’s portfolio, strengthening its position ahead of an anticipated wave of demand for electric vehicles. Lithium, which Rio does not currently produce, plays a key role in the production of electric vehicles.

“The acquisition of Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside aluminum and our leading materials operations for the energy transition,” said Rio Tinto’s CEO , Jakob Stausholm.

The acquisition, which has been approved by both Rio Tinto and Arcadium’s boards, is expected to close in mid-2025, pending the support of at least 75% of Arcadium’s shareholders.

4. Boeing withdraws offer to striking workers

Boeing (NYSE: ) has withdrawn an offer to about 33,000 striking machinists and suspended negotiations with the union that represents them.

In a letter to employees published Tuesday, the planemaker said the International Association of Machinists and Aeronautical Workers had made “non-negotiable” demands and that further talks did not “make sense at this time.” The company previously offered a 30 percent salary increase and improved retirement benefits.

The break in talks came after two days of negotiations with a federal mediator, dimming the chances of an immediate end to a nearly month-long work stoppage affecting Boeing’s operations in the US Pacific Northwest.

Boeing appears to be hemorrhaging cash from the strike, piling other problems on top of a company already facing scrutiny over its safety record.

Meanwhile, S&P Global Ratings said on Monday it had placed Boeing’s credit rating and senior unsecured debt on negative credit watch, adding that the likelihood of a downgrade to junk status may increase if the strike persists towards the end of the year.

5. The oil returns

Oil prices rose on Wednesday, recouping some of the previous session’s steep losses, although an indication of a big increase in US inventories had limited gains.

By 03:31 ET, the contract was up 0.8% at $77.83 a barrel, while futures (WTI) traded 0.8% higher at $74.12 a barrel.

Both contracts fell more than 4 percent on Tuesday on disappointment over the lack of new fiscal stimulus measures from top oil importer China. Reports that the Lebanese military group Hezbollah was seeking a ceasefire with Israel also hint at a potential easing of tensions in the Middle East.

Elsewhere, data from the American Petroleum Institute on Tuesday showed that US oil inventories rose by 10.9 million barrels in the past week, well above expectations for a 1.95 million barrel increase.

Official data from the Energy Information Administration is available later in the session and could fuel concerns that U.S. fuel demand is cooling, especially as the south faces a series of devastating hurricanes.