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5 things to know before the stock market opens Friday, May 31

News Update – Pre-Markets

Here are five key things investors need to know to start the trading day:

1. A force in the markets

Stocks fell Thursday as Salesforce sank 20%. The cloud software vendor had its worst day since 2004 after the company released weaker-than-expected fiscal first-quarter results. The Dow Jones Industrial Average was dragged down by Salesforce and slid 330.06 points, or 0.86%. The S&P 500 lost 0.6%, while the Nasdaq Composite had the worst day, falling 1.08% with a weakness in technology names. AI darling Nvidia also slid more than 3%, which was its first drop since its huge earnings report last week, and Microsoft declined more than 3%. Follow live market updates.

2. Trump guilty

Former U.S. President Donald Trump arrives to court for his hush money trial at Manhattan Criminal Court in New York City on May 30, 2024.

Justin Lane | Getty Images

Former President Donald Trump was found guilty in New York court on Thursday on all 34 felony charges of falsifying business records. The charges were related to a hush money payment his then-personal lawyer Michael Cohen made to porn star Stormy Daniels before the 2016 election. Trump is the first former U.S. president to be found guilty of any crime. His sentencing is set for July 11, four days before the start of the Republican National Convention, where Trump is set to be formally confirmed as the GOP’s presidential nominee. Trump is free without bail and can continue campaigning, but he could face a maximum possible sentence of four years in prison for each count, although the judge isn’t bound to sentence him to prison. An appeal is all but inevitable, and that process could play out over many months, if not years.

3. Baby steps

A customer shops at a Target store on May 20, 2024 in Miami, Florida. 

Joe Raedle | Getty Images

Investors are hoping Friday’s personal consumption expenditures report — which is set to drop at 8:30 a.m. ET — will show more creeping progress on inflation. The PCE is the Fed’s favorite inflation gauge because it accounts for shifts in consumer behavior, like when shoppers decide to pick a less expensive option over a pricier one. It’s expected to show inflation in April running at a 2.7% annual rate both overall and for the key “core” reading, according to the Dow Jones estimates. The core reading excludes food and energy costs. If that forecast pans out, it would represent a slight decline on the core measure and little change for the overall index.

4. Retail reigns

The Gap logo is displayed at a Gap store on April 25, 2023 in Los Angeles, California. 

Mario Tama | Getty Images

Retailers had a big day Thursday, complete with surprising earnings reports and significant stock moves. Kohl’s shares fell more than 20% for the day after the company posted an unexpected loss per share and came in well below Wall Street’s expectations for a slight profit. But other retailers fared better. Foot Locker saw its stock surge 15%, a sign that its turnaround is starting to pay off. And shares of Best Buy gained 13% after the company missed quarterly sales expectations, but beat on earnings per share and reiterated its full-year forecast. Gap also saw a huge stock move on its afternoon earnings report. Its shares were up more than 20% in premarket trading after the retailer blew past earnings estimates and beat on revenue.

5. Cautious consumers

Brian Moynihan, CEO of Bank of America, speaking on CNBC’s Squawk Box at the WEF Annual Meeting in Davos, Switzerland on Jan. 16th, 2024.

Adam Galici | CNBC

Consumers and businesses have turned cautious on spending for everything from hard goods to software, Bank of America CEO Brian Moynihan said Thursday at a financial conference in New York. There’s still some growth, as consumer spending via card payments, checks and ATM withdrawals has grown about 3.5% this year to roughly $4 trillion, Moynihan said. But, he noted, that’s a significant drop from the nearly 10% growth rate seen in May 2023. “We’ve got to keep the consumer in the game in the U.S. economy, because [they’re] such a big part of it,” Moynihan, who runs the second-largest U.S. bank by assets, said. “They’re getting a little more tenuous, and that is due to everything going on around them.”

— CNBC’s Alex Harring, Dan Mangan, Kevin Breuninger, Brian Schwartz, Jeff Cox, Gabrielle Fonrouge, Melissa Repko, Sean Conlon and Hugh Son contributed to this report.

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