Tesla’s third-quarter profit fell short of expectations, sending the stock down 5.3%. A sales decline offered little relief as Wall Street struggled with muted optimism all week.
The electric vehicle maker kicked off gains ahead of the ‘Magnificent Seven’ – a cohort that makes up nearly 35% of the S&P 500’s weight and could dictate the market’s next move.
IBM fell 5.4% after the company recorded a slowdown in growth in its key cloud software segment, surpassing a third-quarter profit.
Amid a whirlwind of earnings reports, profit-taking and escalating trade tensions, the stock rally is showing signs of fatigue.
While most companies have exceeded analyst expectations, a cautious outlook casts a shadow as investors look for justification for sky-high stock valuations. “The numbers are not striking enough and not rampant enough to really drive a market through these big milestones,” said Chris Beauchamp, chief market analyst at IG Group. “The caution is working and the big gains will appear next week and that could well be a wait and see.”
At 9:38 a.m., the Dow Jones Industrial Average rose 41.34 points, or 0.10%, to 46,631.75, the S&P 500 gained 11.93 points, or 0.18%, to 6,711.33 and the Nasdaq Composite gained 23.30 points, or 0.09%, to 22,760.43.
Quantum computer companies were a bright spot after the Wall Street Journal reported that U.S. President Donald Trump’s administration was in talks with some of them to take equity stakes in exchange for federal funding.
IonQ and D-Wave Quantum rose 5.7% and 15.6% respectively, while Rigetti Computing added 8%.
Energy stocks rose 1.2% after a rise in crude oil prices due to new US sanctions on Russia. Chevron, Exxon Mobil and Halliburton rose between 1% and 2.1%.
Health insurer Molina Healthcare fell 20.9% after lowering its annual profit forecast. Peers Centene and UnitedHealth fell 6.6% and 1.5%, respectively.
The S&P Industrials index rose 0.8% after a slew of earnings reports. Honeywell raised its annual profit forecast due to strong demand in aerospace, sending its shares up 5%.
Shares of American Airlines rose 3.6% after the airline raised its profit forecast for the year, while Southwest Airlines fell 3.7% despite a surprise quarterly profit.
T-Mobile fell 2.3%, despite adding more than expected wireless subscribers in the third quarter.
DATA DRYING CONTINUES
As the US government shutdown enters its twenty-third day, major economic releases, including Thursday’s usual reading of weekly unemployment benefits data, remain frozen, leaving investors without crucial signals.
That puts Friday’s core CPI print, which is expected to hold steady at 3.1%, into sharp focus as the Federal Reserve’s only clear inflation guidance ahead of next week’s policy meeting.
Markets have already priced in a 25 basis point rate cut, with traders betting the Fed will ease again in December.
Meanwhile, a Reuters report says the Trump administration is imposing sweeping restrictions on high-tech exports to China in retaliation for Beijing’s latest restrictions on rare earth shipments. The report created new uncertainty in the markets.
Advancing issues outpaced declining issues by a 2.07-to-1 ratio on the NYSE and by a 1.66-to-1 ratio on the Nasdaq.
The S&P 500 recorded five new highs and one new low over the past 52 weeks, while the Nasdaq Composite recorded 19 new highs and 32 new lows.
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