{"id":72490,"date":"2026-10-01T16:38:11","date_gmt":"2026-10-01T20:38:11","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nike-slumps-on-weak-fy27-outlook-as-geopolitical-tensions-and-ai-inflation-fears-weigh-on-markets\/72490\/"},"modified":"2026-10-01T16:38:11","modified_gmt":"2026-10-01T20:38:11","slug":"nike-slumps-on-weak-fy27-outlook-as-geopolitical-tensions-and-ai-inflation-fears-weigh-on-markets","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nike-slumps-on-weak-fy27-outlook-as-geopolitical-tensions-and-ai-inflation-fears-weigh-on-markets\/72490\/","title":{"rendered":"Nike Slumps on Weak FY27 Outlook as Geopolitical Tensions and AI Inflation Fears Weigh on Markets"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Nike (<a href=\"\/stock\/NKE\">NKE<\/a>) shares faced pressure after forecasting a high-single-digit revenue decline for fiscal 2027 and missing key estimates in Greater China.<\/strong><\/li>\n<li><strong>Geopolitical risks intensified as a tanker was struck in the Strait of Hormuz and President Trump warned of a &quot;very hard&quot; response to Iran regarding the Flydubai incident.<\/strong><\/li>\n<li><strong>Federal Reserve officials signaled a cautious approach to future rate hikes, while Governor Cook identified AI as a primary inflationary risk for 2027.<\/strong><\/li>\n<li><strong>Major corporate deals emerged as Amazon (<a href=\"\/stock\/AMZN\">AMZN<\/a>) secured nuclear power for data centers and Broadcom (<a href=\"\/stock\/AVGO\">AVGO<\/a>) offered $42 billion in financing to Anthropic.<\/strong><\/li>\n<\/ul>\n<p>Nike (<a href=\"\/stock\/NKE\">NKE<\/a>) reported mixed first-quarter results for fiscal 2027, overshadowed by a disappointing full-year outlook. The footwear giant expects <strong>FY27 revenue to decline in the high-single digits<\/strong>, with adjusted <strong>EPS forecasted between $1.15 and $1.35<\/strong>. While Q1 EPS of <strong>$0.48<\/strong> beat the <strong>$0.44<\/strong> estimate, revenue of <strong>$11.21 billion<\/strong> fell short of the <strong>$11.33 billion<\/strong> expected by analysts.<\/p>\n<p>The company\u2019s performance in <strong>Greater China<\/strong> remains a point of concern, with EBIT coming in at <strong>$248 million<\/strong>, significantly missing the <strong>$312.2 million<\/strong> estimate. Despite the top-line miss, Nike managed to expand its <strong>gross margin to 42.8%<\/strong>, up from 42.2% a year earlier. Inventory levels were a bright spot, ending the quarter at <strong>$7.8 billion<\/strong>, leaner than the projected <strong>$7.96 billion<\/strong>.<\/p>\n<p>Broader markets saw a modest recovery as <strong>10-year Treasury yields fell five basis points to 5.24%<\/strong>, easing pressure on equities. The <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> rose 0.2%<\/strong> and the <strong>Nasdaq 100 gained 0.3%<\/strong>, even as <strong><a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">oil prices<\/a> climbed 2.9% to $93.08<\/strong>. Investors are now pivoting their focus to Friday\u2019s payrolls report, with economists anticipating <strong>88,000 new jobs<\/strong> and an unemployment rate of <strong>4.1%<\/strong>.<\/p>\n<p>Geopolitical tensions spiked following reports that a tanker was struck by an unknown projectile in the <strong>Strait of Hormuz<\/strong>, resulting in a fire. In response to recent regional instability, <strong>President Trump<\/strong> warned that <strong>Iran<\/strong> would face a <strong>\u201cvery hard\u201d U.S. response<\/strong> if investigators confirm a link to the Flydubai incident. These developments have kept energy markets on edge and contributed to the rise in crude prices.<\/p>\n<p>On the monetary policy front, <strong>Fed Vice Chair Philip Jefferson<\/strong> and <strong>NY Fed President John Williams<\/strong> suggested there is no immediate urgency for further rate increases. However, <strong>Fed Governor Cook<\/strong> warned that <strong>AI is the top risk for 2027<\/strong>, stating it is already causing inflationary pressure. She expressed concern over whether productivity gains from the technology will arrive fast enough to offset these costs.<\/p>\n<p>In the technology and industrial sectors, <strong>Amazon (<a href=\"\/stock\/AMZN\">AMZN<\/a>)<\/strong> announced a deal to purchase <strong>690 MW of nuclear power<\/strong> from <strong>Constellation Energy (<a href=\"\/stock\/CEG\">CEG<\/a>)<\/strong> to fuel its growing AI infrastructure. Simultaneously, <strong>Broadcom (<a href=\"\/stock\/AVGO\">AVGO<\/a>)<\/strong> is reportedly offering up to <strong>$42 billion in chip financing<\/strong> to <strong>Anthropic<\/strong>, which may be targeting an IPO as early as November. Meanwhile, <strong>Boeing (<a href=\"\/stock\/BA\">BA<\/a>)<\/strong> averted further labor unrest as white-collar workers ratified a new contract.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Nike (NKE) shares faced pressure after forecasting a high-single-digit revenue decline for fiscal 2027 and missing key estimates 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