Wall Street is bracing for a potential rebound on Thursday after three consecutive days of losses. Index futures are indicating a positive start to the trading session, offering a glimmer of hope after the recent downward trend. Leading the charge is Tesla Inc. (TSLA), the electric vehicle giant, which delivered strong earnings and margins, exceeding expectations. However, it missed revenue targets.
While Tesla is poised for a positive day, the Dow Jones Industrial Average saw its worst performance in over a month. Megacap stocks like Nvidia Corp. (NVDA) and Apple Inc. (AAPL) also experienced significant declines, falling over 2%.
In a contrasting trend, SK Hynix, a key supplier to Nvidia, announced record quarterly profits fueled by the booming artificial intelligence (AI) industry. This development could signal a potential strength in the semiconductor sector.
Boeing Co. (BA) reported a loss for its third quarter, while AT&T (T) delivered better-than-expected earnings. These mixed results from key players will keep investors on edge as they navigate the market landscape.
Among the companies releasing their earnings today, Tesla remains a prominent focus. Dow Inc. (DOW), American Airlines Group Inc. (AAL), United Parcel Service Inc. (UPS), Honeywell International Inc. (HON), Northrop Grumman Corp. (NOC), and Southwest Airlines Co. (LUV) are also scheduled to announce their financial performance.
Adding to the list of concerns for Boeing, its machinists have rejected a 35% wage hike deal, extending their ongoing strike against the company. Workers are dissatisfied with the proposed pension plan and demand a larger pay increase to combat the rising cost of living.
In premarket trading, the SPDR S&P 500 ETF Trust (SPY) climbed 0.42% to $580.42, while the Invesco QQQ ETF (QQQ) surged 0.77% to $492.14, signaling an optimistic outlook for the day ahead.
The Nasdaq Composite, alongside the Dow, recorded its third consecutive day in the red, dragged down by tech stocks. Most sectors on the S&P 500 closed on a negative note, with consumer discretionary, information technology, and communication services stocks experiencing the most significant losses. However, real estate and utilities sectors bucked the negative trend, closing the session higher.
Investor sentiment remains cautious due to rising treasury yields and the anticipation of the upcoming presidential election results on November 5th.
Following six consecutive weeks of gains, the market sentiment has turned gloomy this week, with tech stocks providing some respite amidst sideways movement in other sectors. The benchmark US 10-year treasury yields remain a key focus, having risen to their highest point since July.
On the economic data front, US existing home sales declined 1% from the previous month to an annualized rate of 3.84 million in September. Despite this, the International Monetary Fund (IMF) expects US growth to remain strong. The IMF revised its projected US GDP growth rate to 2.8%, an upward adjustment from its previous prediction of 2.6%.
Economist Jeremy Siegel of WisdomTree and the Wharton School offered a positive outlook, stating, “On the equity front, corporate earnings are strong and with the VIX (the CBOE’s volatility index) still elevated around 20, this is not the backdrop for the start of a bear market.” He further added, “The current under-loved bull market could see significant upside. While I’m not predicting a ‘melt-up,’ it is important to acknowledge the market’s upward momentum could continue as fundamentals remain supportive.”
The economic calendar today includes the release of initial jobless claims data at 8:30 a.m. ET. Cleveland Fed President Beth Hammack is scheduled to speak at 8:45 a.m. ET. New home sales data is set to be released at 10 a.m. ET.
In the commodities market, crude oil futures rose in the early New York session, surging over 1.5%, driven by increased spot demand. The 10-year Treasury note yield fell slightly to 4.192%. Asian markets were mixed on Thursday, with Chinese markets edging lower, while Japan’s Nikkei 225 index rose. European stocks overcame initial hesitation in early trading, surging after a gloomy week.
Investors will be closely watching these key events and economic indicators as they navigate the evolving market landscape in the days ahead.
