Tesla Earnings Spark Rally;S&P 500, Nasdaq, US Stocks Mixed
The S&P 500 and the Nasdaq Composite were bolstered by Tesla’s earnings, which were more robust than anticipated, as US equities predominantly increased on Thursday.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average was trading 85 points lower, or 0.2%, the S&P 500 index was up 11 points, or 0.2%, and the NASDAQ Composite was up 90 points, or 0.5%.
Tesla’s third quarter results surpass expectations.
Tesla (NASDAQ:TSLA) experienced a 14% increase in value following the release of its third-quarter earnings report, which exceeded expectations. Additionally, the electric vehicle manufacturer disclosed that it anticipates a 20-30% increase in sales in the upcoming year.
The earnings beat was primarily driven by improved margins, while the improved outlook for deliveries follows nearly a year of decline in growth due to the saturation of EV markets in the West and increased competition in major markets such as China.
The company’s efforts to expand beyond its primary automobile business, which included ventures into artificial intelligence and robotaxis, had also been largely unsuccessful in October.
The positive reading of the stock is the first of the “Magnificent Seven” to report this earnings season, which has raised expectations for a similar trend from Tesla’s peers, who are scheduled to report in the upcoming weeks.
Next week, Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Amazon (NASDAQ:AMZN) are scheduled to report their earnings.
Quarterly earnings are received.
According to data collected by LSEG, approximately 29% of S&P 500 companies have disclosed their results thus far this quarter, with 81% surpassing estimates for earnings.
Striking machinists rejected a revised contract offer, extending a debilitating labor action that is placing heavy pressure on new CEO Kelly Ortberg’s plans to overhaul the jet manufacturer’s ailing finances. Boeing (NYSE:BA) stock fell 2.3% as a result.
Following Bloomberg’s announcement that Elliott Investment Management and Southwest Airlines (NYSE:LUV) are nearing a settlement that would prevent a proxy conflict, the stock of Southwest Airlines (NYSE:LUV) increased by 1.4%. The airline also reported a surprise third-quarter profit, which was attributed to increased demand and pricing.
United Parcel Service (NYSE:UPS) stock increased by 9% following the transportation company’s third-quarter earnings and revenue report, which surpassed expectations.
After the toymaker reported a steeper-than-anticipated decline in sales due to consumers’ reduced spending on toys, Hasbro (NASDAQ:HAS) stock declined by 2.5%. However, the company’s strict cost controls resulted in increased margins.
International Business Machines (NYSE:IBM) stock experienced a 6% decline following the company’s disclosure that its consulting segment was impacted by diminished enterprise spending on non-GenAI projects, which weakened the software unit’s strength.
Unemployment claims decrease.
The labor market maintained a reasonably robust tone, resulting in an unexpected decrease of 15,000 new unemployment aid applications filed by Americans last week, excluding the corporate sector.
The Federal Reserve’s “Beige Book” report on Wednesday indicated that employment had “increased slightly” in early October. The market’s reevaluation of the probable size of future rate cuts by the Federal Reserve was influenced by the strong payrolls result at the beginning of the month.
Investors will also be monitoring the political landscape, as a WSJ poll released on Wednesday indicated that former President Donald Trump, the Republican presidential candidate, is currently leading his Democratic opponent, Kamala Harris, by 47% to 45%.
This remains within the poll’s margin of error, indicating that a close election is imminent.
Rebounds of crude oil
On Thursday, oil prices increased, rebounding from the previous session’s losses, amid concerns that the supply from the critical region could be impacted by an escalation of the conflict in the Middle East.
The Brent contract had increased by 0.6% to $75.44 per barrel by 09:35 ET, while U.S. crude futures (WTI) were trading at $71.22 per barrel, also up by 0.6%.
According to the Syrian state media, Israel initiated assaults on the Syrian capital Damascus early on Thursday, indicating a potential escalation of the conflict in the region. However, there is increasing speculation that Israel may retaliate against Iran in response to an attack that occurred on October 1.
This week, oil prices have increased by nearly 4%, which has contributed to the reduction of last week’s losses of over 7%. This increase is due to concerns regarding Chinese demand and the ease of potential disruptions caused by the conflict in the Middle East.
