Futures slip; Earnings season, Microsoft/Nuance, Alibaba, Chip summit, and more

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U.S. stock poised to start the week lower ahead quarterly earnings season

U.S. stock futures lost momentum early Monday after the Dow Jones Industrial Average and S&P 500 hit record highs last week as market participants braced for earnings reports that will reveal how the rollout of Covid-19 vaccines and government stimulus have impacted corporate America.

The nation’s four largest banks — Bank of America (NYSE: BAC), Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) — are set to kick off the quarterly earnings this week.

By 5:10 a.m. ET, futures tied to the Dow were indicated 89.5 points, or 0.27% lower to 33,592.5. S&P 500 futures gave away 8.38 points, or 0.20% to 4,111.12 while the tech-heavy Nasdaq 100 futures dropped 24.12 points, or 0.17% to 13,805.38.

Microsoft said to be in advanced talks to buy Nuance Communications

Microsoft (NASDAQ: MSFT) is in advanced talks to acquire Nuance Communications (NASDAQ: NUAN), maker of artificial intelligence and speech recognition technology, according to a report from Bloomberg on Sunday.

People familiar with the matter told the news outlet that the talks could value the Nuance about $56 per share. That represents a 23% premium to the $45.58 closing price of Nuance stock on Friday. According to the people, a deal could be announced as soon as this week.

The Massachusetts-based company uses artificial intelligence solutions to offer natural-language and speech recognition interfaces via a variety of fields. It is the company behind Apple (NASDAQ: AAPL)’s mobile assistant Siri.

Nuance stock surged $9.04, or 19.83% to $54.62 per share in the pre-market trading session Monday.

Alibaba soars after playing down record $2.8 billion antitrust fine in China

Meanwhile, shares of Alibaba (NYSE: BABA) moved higher in pre-market hours Monday after CEO Daniel Zhang said he doesn’t expect any material impact due to the record $2.8 billion fine that Chinese antitrust regulators imposed on the e-commerce giant.

The regulators fined Alibaba for using its market dominance to squeeze merchants and rivals on its e-commerce platforms. The company said in a statement that it has accepted the fine and “will ensure its compliance with determination.”

Zhang said the company will roll out measures to lower business costs and entry barriers that vendors face on its platforms, according to a Reuters report.

As of writing, Alibaba stock was up $14.19, or 6.35% to $237.50 a share in the pre-market trading session.

White House to kick off chip summit

In other news, the Biden administration’s senior economic and national security advisers are scheduled to hold a second summit with auto company and semiconductor leaders later today to discuss the global chip crisis, which continues to weigh on auto manufacturing and threaten jobs across the nation.

The meeting, called the “CEO Summit on Semiconductor and Supply Chain Resilience,” will include CEOs of the three largest U.S. automakers, executives from Taiwan Semiconductor Manufacturing Company (TSMC), NXP, GlobalFoundries, and PACCAR.

The ongoing semiconductor shortage has devastated industries ranging from mobile phones to TVs to vehicles and game consoles.

Ford (NYSE: F) and General Motors (NYSE: GM) are among companies that have been forced to cut production at North American factories because of the crisis.