By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -Futures linked to the and the surged on Thursday following a selloff in the previous session, buoyed by Tesla (NASDAQ:)’s optimistic earnings forecast, which kicked off megacap results on an upbeat note.
Shares of the EV-maker soared nearly 12% in premarket trading after it reported robust third-quarter profits and surprised investors with a prediction of 20 to 30% growth in sales next year.
“Tesla bounced back from the underwhelming launch of its Robotaxi with a strong set of third-quarter earnings. These numbers represent a return to form after an underpowered second quarter, when profitability dropped sharply,” said Russ Mould, investment director at AJ Bell.
“There is clearly still decent appetite for electric vehicles, even if it is not coming through as rapidly as some hoped.”
Tesla was the first of the so-called Magnificent Seven group of megacaps to report, with results from several others awaited next week.
The optimism spread to the other six, with Nvidia (NASDAQ:) rising 1%, Amazon.com (NASDAQ:) up 0.8% and Meta Platforms (NASDAQ:) gaining 0.9% after steep declines in the previous session.
Dow E-minis were down 53 points, or 0.12%, S&P 500 E-minis were up 26.75 points, or 0.46%, and Nasdaq 100 E-minis were up 168.25 points, or 0.83%.
Wall Street witnessed a selloff on Wednesday, with the benchmark S&P 500 notching its third straight decline and the Nasdaq seeing its worst day since early September.
Stocks have eased from record levels over the past few sessions due to a reassessment of bets on the Federal Reserve’s rate cuts, rising Treasury yields, corporate earnings and uncertainty surrounding the upcoming U.S. election.
“Price action speaks to a market that was overly rich and well-owned, and as the cracks started to emerge the signal was there for others to follow,” said Chris Weston, head of research at Pepperstone.
Moves were likely exacerbated as traders moved to hedge their losses, Weston said.
The yield on the benchmark 10-year Treasury eased slightly on the day, but was still trading around its highest since late July.
Shares of Boeing (NYSE:) dropped 2.7% after factory workers voted on Wednesday to reject a contract offer and continue a more than five-week strike that has seen the company’s losses soar.
Meanwhile, investor focus returned to the earnings season, with UPS adding 6.7% after the parcel service provider reported a rise in third-quarter profit on rebounding volumes and cost cuts. Rival FedEx (NYSE:) was up 2.1%.
Southwest Airlines (NYSE:) rose 5.5% after reporting a surprise profit in the third quarter, while Honeywell International (NASDAQ:) was off 2.4% after quarterly results.
IBM (NYSE:) lost 5% after missing estimates for third-quarter revenue, while gold producer Newmont dropped 5.8% as higher costs and weaker Nevada output saw it miss profit estimates.
Around 29% of S&P 500 companies have reported results so far this quarter, according to data compiled by LSEG, with 81% beating earnings estimates.
On the economic front, S&P Global flash PMIs, new home sales for September and weekly jobless claims data are due on the day, along with comments from Cleveland Fed President Beth Hammack.
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