Stocks were rising with the corporate earnings season remaining a dominant force in markets, as investors also looked ahead to comments from Federal Reserve Chair Jerome Powell later on Thursday.
Futures for the Dow Jones Industrial Average rose 210 points, or 0.6%, after the index ended 249 points higher on Wednesday to end at 35,160. S&P 500 futures signaled a start 0.8% higher, with the Nasdaq poised to climb 1.2% after dropping 1.2% in the last session.
The tech sector was bouncing back from a selloff, which followed weak first-quarter results and a downbeat outlook from Netflix (ticker: NFLX) that ushered in a 35% loss in the value of the stock on Wednesday. Some of that pessimism looked to be undone following strong earnings from Tesla (TSLA), which notched record sales and profit.
“U.S. market sentiment was dominated by Netflix’s results yesterday, with the huge 200,000 lost subscribers shocking the market,” said Sophie Lund-Yates, an analyst at broker Hargreaves Lansdown . “However, Tesla’s results last night should offset a reasonable chunk of tech jitters.”
Investors are focused on how well companies are weathering a complex macroeconomic environment, amid historically high inflation and expectations that the Federal Reserve will soon tighten monetary policy and ratchet up borrowing costs.
On that front, traders will closely monitor an International Monetary Fund panel later in the day focused on the global economy.
“We look ahead to comments from the central bank holy trinity of Fed Chair Jay Powell, [European Central Bank] President Christine Lagarde and Bank of England Governor Andrew Bailey, who are all due to speak in Washington D.C.,” said Michael Hewson, an analyst at broker CMC Markets .
Markets are expecting the Fed to raise interest rates by a sizable 50 basis points at its next meeting, with many more increases to come this year and next. The central bank is also expected to soon reduce the size of its bondholdings as it looks to rein in high inflation, and the prospect of tighter monetary policy has been a key pressure on stocks this year.
“With so much macroeconomic and geopolitical risk at the moment, the market will be very sensitive to any concluding remarks [at the IMF panel],” said Lund-Yates. “With global growth forecasts being cut at the same time as interest rates being hiked, there is increased anxiety of recessions coming down the pipes.”
Bond markets were little moved, with the yield on the benchmark 10-year U.S. Treasury note down slightly to below 2.9%, having topped 2.95% earlier in the week—the highest level in four years.
Here are seven stocks on the move Thursday:
Tesla jumped 7% in premarket trading, after the electric-vehicle maker earned $3.22 per share from $18.8 in sales in the first quarter of the year. The record results firmly outpaced Wall Street’s expectations of EPS in the range of $2.20 to $2.30.
After a 35% drop on Wednesday, Netflix shares were down another 1% in the premarket. Streaming peer Roku (ROKU), which saw its stock fall 6.2% on Wednesday, was nearly 1% higher after its decline attracted funds managed by ARK Invest CEO Cathie Wood.
Nestlé (NESN.Switzerland) rose 1.2% in Zurich trading, after the food and drinks giant beat expectations for first-quarter revenue and guided for earnings to increase in 2022.
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