5 things to know before the stock market opens Friday, April 26

Here are the most important news items that investors need to start their trading day:

Stocks fell Thursday after the latest U.S. economic data raised concerns about stagflation. The blue-chip Dow slid 375 points for the day, while the S&P 500 and the Nasdaq Composite dropped 0.5% and 0.6%, respectively. U.S. gross domestic product expanded 1.6% in the first quarter, less than expected, while the personal consumption expenditures price index increased at a 3.4% pace, well above the previous quarter’s 1.8% advance. Taken together, investors worried it could mean a combined slowing economic growth and rising inflation. Still, major averages are on track for a winning week, and traders will be watching March’s PCE reading, due Friday morning. Follow live market updates.

Google parent company Alphabet on Thursday assuaged Wall Street’s concerns about the company’s core ads business and ability to generate profits from AI investments. Alphabet topped analysts’ estimates when it reported first-quarter revenue growth of 15% from the same period a year earlier, with ad sales at YouTube that jumped 20%. As a sign of confidence in the company’s financial position, Alphabet announced its first-ever quarterly dividend of 20 cents per share and plans to repurchase an additional $70 billion in stock. The stock rallied about 12% in extended trading, pushing Alphabet’s market cap past $2 trillion.

Microsoft is increasing spending at a rate not seen since 2016, but it may still not be enough to meet demand. The company said Thursday in an earnings report that it has a shortage of data center infrastructure, specifically for deploying AI models. The company will again materially bump up capital expenditures in the current quarter, CFO Amy Hood said. That came as Microsoft’s fiscal third-quarter results exceeded estimates on the top and bottom lines, but revenue guidance was weaker than expected.

Paramount Global and Skydance Media are getting closer to a deal that would merge the two media companies, sources told CNBC’s Alex Sherman. Skydance Media and its private equity backers KKR and RedBird Capital Partners are targeting May for finalized terms of such an arrangement. Skydance’s plan would name Skydance CEO David Ellison as CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as president, the sources said. One of the biggest remaining challenges is Paramount Global’s renewal agreement with Charter Communications for CBS and its cable networks, which is relevant to Paramount’s valuation. (Disclosure: Comcast is the parent company of NBCUniversal and CNBC.)

Southwest Airlines has long been known for its single-class, open-seating policy that sets it apart from most other major U.S. airlines. But CEO Bob Jordan told CNBC on Thursday that the airline is considering changing that. “We’re looking into new initiatives, things like the way we seat and board our aircraft,” he said while noting no decisions have been made yet. Analysts in the past have asked about charging for premium seating or additional fees, as airline rivals have touted high revenue growth for premium seating such as business class and strong upsell rates. Ryan Green, the carrier’s chief commercial officer, said on Southwest’s earnings call that the carrier is not considering charging for checked bags because “people choose Southwest Airlines because we don’t have bag fees.”

— CNBC’s Yun Li, Brian Evans, Jennifer Elias, Jordan Novet, Alex Sherman and Leslie Josephs contributed to this report.

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