Premarket: Futures Slip Amid Mixed Economic Signals and Disappointing Adobe Guidance

The stock market futures are trading slightly below fair value as investors digest a mix of corporate developments, central bank decisions, and looming economic data releases. S&P 500 futures are down 0.2 percent, Nasdaq 100 futures have fallen 0.4 percent, and Dow Jones Industrial Average futures are modestly lower by 0.1 percent. Key factors driving the pre-market weakness include disappointing guidance from Adobe, inflation concerns, and uncertainty ahead of critical economic data.

Adobe shares are under significant pressure, falling 11 percent in pre-market trading after the company issued below-consensus guidance for fiscal year 2025. Despite beating earnings and revenue expectations for its most recent quarter, Adobe’s cautious revenue and earnings outlook has raised concerns about its growth trajectory in a competitive software environment.

In addition to corporate earnings, bond yields are drawing attention as the 10-year Treasury yield climbs back to 4.30 percent, signaling persistent inflation concerns. This rise in yields may temper investor appetite for equities, particularly in the technology-heavy Nasdaq, which is sensitive to interest rate movements.

Central bank actions are also influencing sentiment. The Swiss National Bank surprised markets with a 50-basis-point rate cut to 0.50 percent, exceeding expectations for a smaller reduction. Meanwhile, Brazil’s central bank took a contrasting approach, raising its Selic rate by 100 basis points to 12.25 percent in an effort to combat inflationary pressures.

On the geopolitical front, China’s openness to trade talks with the incoming U.S. administration provides a glimmer of optimism amid ongoing trade tensions. However, uncertainty remains high as policymakers and markets brace for potential policy shifts under the new administration. Domestically, the House’s passage of the National Defense Authorization Act signals movement on fiscal policy, while Senate discussions on a tax package are expected to extend into 2025, adding to the policy uncertainty.

In corporate developments, Kroger terminated its merger agreement with Albertsons, opting instead for a $7.5 billion share repurchase program and a move to redeem merger-related debt. Microsoft announced it expects an $800 million impairment charge in its fiscal second quarter related to General Motors’ decision to realign its autonomous driving strategy. Meanwhile, ServiceTitan priced its IPO significantly above the expected range, reflecting strong demand for the software company’s shares.

Commodities are showing mixed trends, with WTI crude oil up 0.3 percent to $70.48 per barrel and copper gaining 0.2 percent to $4.27 per pound. Natural gas futures, however, are down 2.2 percent to $3.30 per mmBtu, reflecting ongoing volatility in energy markets.

Later this morning, the release of the November Producer Price Index (PPI) and weekly jobless claims will provide additional insights into the economic landscape. Markets are particularly attuned to PPI data as it could influence expectations for future Federal Reserve actions, particularly with a rate cut anticipated next week.

Amid this backdrop, brokerage firms issued notable upgrades and downgrades. Upgrades included Boeing, Coca-Cola, and PepsiCo, reflecting positive sentiment in select industrial and consumer staples sectors. Adobe, however, was among the prominent downgrades, underscoring concerns about its forward guidance.

As the market prepares for the day ahead, the mix of corporate earnings, inflationary pressures, and central bank actions sets a complex tone. Investors will closely monitor economic releases and corporate announcements to gauge the path forward in a market that remains sensitive to macroeconomic and geopolitical developments.