Salesforce stock tumbled Wednesday after the business-software provider reduced its outlook for subscription and support revenue, and issued a downbeat forecast for the current quarter. The company said there was cooling demand from customers who were taking longer to place orders for its software services, despite excitement around Salesforces artificial-intelligence products. The stock fell 16% in after-hours trading after a modest rise during the regular session. Before the earnings, Salesforce shares had risen about 3.2% since the start of the year. The business software provider said it now expects subscription and support revenue, the lions share of the companys business, to grow just below 10% in the current fiscal year. The company had previously forecast growth of about 10%, or above 10% in constant currency. Salesforce, a component of the Dow Jones Industrial Average, also reduced its full-year guidance for operating margin. The company expects revenue to be up 7% to 8% in the current quarter to $9.2 billion to $9.25 billion. Analysts polled by FactSet are expecting revenue of $9.35 billion for the period. Salesforce posted a profit of $1.53 billion, or $1.56 a share, for the quarter ended April 30, compared with $199 million, or 20 cents a share, a year earlier. Stripping out certain one-time items, the company reported a profit of $2.44 a share, ahead of the $2.37 expected by Wall Street analysts and beating the companys guidance. Revenue rose 11% to $9.13 billion in the quarter, falling short of the $9.15 billion expected by Wall Street analysts.

Profit-taking continued to dominate the Swiss stock market in the middle of the week. The SMI lost 0.5 per cent to 11,794 points. Of the 20 SMI stocks, there were 16 losers and four gainers. A total of 18.95 (previously: 18.21) million shares were traded. Investors divested themselves of the defensive heavyweights Nestle (-0.5%) and Novartis (-0.7%), similar to the previous day. Roche, meanwhile, rose by 0.3 per cent. The US Food and Drug Administration (FDA) granted priority review to Roche's application for approval regarding its drug candidate inavolisib for the treatment of advanced breast cancer. Swiss Re (+1.4%) benefited from HSBC's upgrade to ‘buy’.

Europe
The European stock markets fell sharply on Wednesday, against a backdrop of higher-than-expected inflation in Germany and soaring bond yields. The Stoxx Europe 600 index shed 1.1% to 513.5 points. In Paris, the CAC 40 lost 1.5%, closing below the symbolic threshold of 8,000 points, and the SBF 120 also dropped by 1.5%. The DAX 40 in Frankfurt gave up 1.1%, while the FTSE 100 slipped 0.9% in London. Renault gained 3.2% to €53.36, as Goldman Sachs raised its recommendation from ‘neutral’ to ‘buy’ and increased its target price from €51 to €70. Diversified group Bouygues (-1.3%) announced that the timetable for completing the takeover of La Poste Telecom could be affected by the differences between the two current owners of the virtual operator, SFR and La Poste. International Distribution Services, or IDS (+4.3% in London), the parent company of British postal services Royal Mail, indicated that it had accepted the improved £3.57 billion (€4.2 billion) takeover offer made by EP Corporate Group, a company owned by Czech businessman Daniel Kretinsky, on 15 May.

United States
U.S. stock indexes dropped Wednesday after bond yields climbed to their highest level in a month. The S&P 500 declined 0.7%, with all 11 of its sectors posting declines. The tech-heavy Nasdaq fell 0.6% from its record high reached a day earlier. The Dow Jones Industrial Average dropped 1.1%, or 411 points. After rallying through most of May, stock indexes have faltered more recently as investors continue recalibrating how the Federal Reserve might move on interest rates this year. For the year, the S&P 500 is still up 10%, including a 4.6% gain for May so far. Among individual stocks Wednesday, Marathon Oil shares jumped 8.4% after ConocoPhillips agreed to acquire the company for $17.1 billion. Shares of American Airlines fell 14% after the carrier cut its outlook. With earnings season winding down, investors are awaiting new information to justify pushing share prices higher. On Friday, the Fed’s favoured inflation gauge will be released. Economists expect the personal-consumption expenditures price index rose 2.7% in April from a year earlier. Dick's Sporting Goods surged by almost 16 per cent. The sporting goods retailer presented unexpectedly good quarterly figures and raised its outlook. This supported shares such as Nike (-0.4%) and Under Armour (+1.5%). Robinhood Markets rose by 3 per cent. The brokerage firm has internally set the course for the buyback of its own shares worth USD 1 billion. The electric car manufacturer Faraday Future Intelligent Electric withdrew its production forecast for the year, citing market conditions and financing issues. The share price slumped by 63 per cent. Abercrombie & Fitch rose 24.3 per cent following the clothing retailer's announcement of strong sales growth in the first quarter and an increase in its annual sales forecast.

Asia
Stocks in Asia mostly fell on Thursday. Technology-heavy stock exchanges such as Tokyo, Seoul and Hong Kong saw the sharpest declines, dropping between 1.2 and 1.3 per cent. In Tokyo, shares in Advantest fell by 5.7 per cent and in Seoul, shares in memory chip manufacturer SK Hynix slumped by 1.8 per cent. Shares in Samsung Electronics fell by 1.3 per cent. In contrast, shares in electric car manufacturers rose in Shanghai. The Chinese government has published an action plan to reduce emissions and declared that it will lift restrictions on the purchase of cars with alternative drive systems. Shares in SAIC Motor are up 0.9 per cent and BYD added 0.2 per cent. The Shanghai Composite declined slightly by 0.1 per cent.

Bonds
Yields on U.S. government debt rose further on Wednesday as concerns grew that the Federal Reserve may have to keep interest rates high for longer and after another Treasury auction was met with poor demand. According to the CME Group's FedWatch tool, investors now rate the probability of the Federal Reserve cutting interest rates by 25 basis points in September at just 42%, compared with 49% a week ago. The benchmark 10-year Treasury yield rose to 4.617%, from 4.542% Tuesday. That marked its highest level since April 30. The 2-year Treasury note yield gained 3 basis points to 4.981%.

Analysis
UBS upgrades Comet target to CHF 390 (357) - Buy
UBS raises Arbonia target to CHF 13.20 (11) - Neutral
Bernstein lifts Orange to Outperform (Marketperform) - 13 (10.10) EUR

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