New York: Wall Street futures edged lower on Thursday, as investors digested lackluster quarterly results from electric vehicle giant Tesla and tech heavyweight IBM. The disappointing earnings from these major corporations, combined with persistent trade tensions and concerns over inflation, set a cautious tone for the markets ahead of key economic data releases.
Tesla’s third-quarter results reflected a mixed performance, with revenue slightly surpassing expectations but profits falling short. The electric carmaker’s shares dropped more than 3% in pre-market trading, raising fresh doubts about demand growth and profitability amid rising competition in the EV market. Investors were particularly concerned about the company’s margin pressures and slowing deliveries in China and Europe.
IBM also weighed heavily on investor sentiment, plunging nearly 7% after its latest earnings report. While the technology firm posted steady overall profits, growth in its cloud and software division an area investors closely watch as a measure of IBM’s modernization efforts lagged expectations. The slowdown suggested potential challenges in maintaining momentum within an increasingly competitive cloud computing sector dominated by Microsoft and Amazon.
Market participants also faced renewed unease over escalating U.S. China trade frictions. Reports of potential new restrictions on semiconductor exports to China rattled investor confidence, reviving memories of past trade disruptions that had affected global supply chains. Analysts warned that continued geopolitical tensions could have ripple effects on both the technology and manufacturing sectors.
Chris Weston, Head of Research at Pepperstone, observed that “investors are walking a tightrope between optimism over an eventual rate cut and anxiety over earnings and trade policy.” He added that the combination of corporate earnings volatility and macroeconomic uncertainty was prompting traders to adopt a wait-and-watch approach.
Despite the overall subdued tone, some sectors showed resilience. Quantum computing firms, including IonQ and D-Wave, surged more than 10% after reports surfaced of potential U.S. government investments in advanced computing technologies. Similarly, Rigetti Computing saw a 6.6% jump, highlighting investor optimism in next-generation tech.
Energy shares also climbed as crude oil prices spiked following the U.S. government’s announcement of new sanctions on Russian oil exports. Major oil producers such as Chevron, ExxonMobil, and Halliburton benefited from the rally, with analysts predicting that tightening supply could further boost prices in the coming weeks.
Molina Healthcare suffered a sharp 20% fall after cutting its full-year profit forecast, dragging the broader healthcare sector lower. Conversely, American Airlines and Honeywell saw gains after both companies raised their annual earnings outlooks. T-Mobile also advanced following reports of strong subscriber growth in the third quarter, underscoring the mixed nature of the ongoing earnings season.
Investors now turn their attention to upcoming inflation data, particularly the core Consumer Price Index (CPI), which could provide clues about the Federal Reserve’s next monetary policy move. With the U.S. government shutdown extending into its 23rd day, many macroeconomic indicators remain delayed, leaving markets more reliant on inflation numbers as a policy gauge.
Traders have largely priced in the possibility of a 25-basis-point rate cut in the coming month, but uncertainty persists over the Fed’s long-term path. Analysts expect market volatility to remain elevated as investors await more corporate earnings and the outcome of next week’s Federal Open Market Committee (FOMC) meeting.
Overall, the muted performance of Wall Street futures reflects a market grappling with multiple headwinds corporate underperformance, geopolitical strain, and policy uncertainty. While optimism remains in select sectors such as energy and technology innovation, the broader outlook is clouded by fears of slowing economic growth and uneven earnings momentum.