Adobe's shares slipped around 3% following the announcement of a fiscal second-quarter outlook that did not meet investor expectations. The company forecasted revenue between $4.27 billion and $4.30 billion, compared to the StreetAccount consensus estimate of $4.29 billion. Despite exceeding earnings and revenue expectations in its fourth quarter, Adobe's adjusted earnings are anticipated to range between $4.95 and $5 per share, slightly below analysts' projections of $5 per share.
In contrast, American Eagle Outfitters experienced a 5% drop in shares after issuing weak guidance. Investors are now eagerly awaiting reports from Dollar General and Ulta Beauty, which are scheduled for Thursday.
Intel saw a significant boost as its shares surged about 10% following the appointment of Lip-Bu Tan as its new CEO. This leadership change seems to have instilled confidence among investors.
Meanwhile, the tech sector emerged as the session's top performer, rising nearly 1.6%. Nvidia and Palantir Technologies contributed to this growth with their notable surges.
Mag Seven's revenue estimates revealed that six out of the seven largest companies in the group reported declines for Q1 after Q4 reports. Dan Niles, founder of Niles Investment Management, attributes this downturn not to tariffs but to concerns over revenue growth.
"It's not the tariffs knocking these tech stocks down. It is the fact that revenue estimates were six out of the seven biggest in the Mag Seven all went down for Q1 after reporting Q4." – Dan Niles
Niles also took advantage of the dip by purchasing shares of these beleaguered megacap tech stocks.
On the downside, SentinelOne's shares plummeted about 15% after a disappointing revenue outlook, as the company projected first-quarter revenue to be $228 million, falling short of analysts' forecast of $235 million polled by LSEG.
The broader session saw mixed results across sectors. Michael Green commented on market dynamics:
"The really key thing that I would highlight is that rather than an outright sell-off, so far what we've seen is largely rotation." – Michael Green
Scott Helfstein added insights into broader economic implications:
"The key question is whether tariffs will have a greater impact on growth or prices. In recent weeks, the rates market has signaled that weaker growth is the bigger concern with three cuts now being priced for this year." – Scott Helfstein
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