Stock Futures Steady as Investors Shift Focus to Earnings Reports

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ICARO Media Group
News
01/11/2023 23h21

Stock futures remained largely unchanged on Wednesday night as investors turned their attention from the Federal Reserve's policy decision to the latest round of corporate earnings reports. The futures tied to the Dow Jones Industrial Average slipped 4 points, trading near flat, while S&P 500 futures and Nasdaq 100 futures each saw a modest increase of around 0.1%.

One notable stock that experienced a significant decline was SolarEdge, which tumbled over 18% after unexpectedly posting a loss and providing a dismal outlook for fourth-quarter revenue. Conversely, DoorDash managed to climb more than 7% after their earnings surpassed Wall Street forecasts. However, Etsy fell nearly 6% as management warned of a challenging environment for consumer discretionary spending.

These market movements come after a positive session on Wall Street that marked the start of a new trading month. On Wednesday, the Dow Jones Industrial Average gained over 200 points, while the S&P 500 and Nasdaq Composite each ended with gains of over 1%.

The focal point of Wednesday's trading session was the Federal Reserve's decision to keep interest rates unchanged, along with the subsequent press conference featuring Jerome Powell, the central bank's chair. Powell indicated that he would not rule out a rate increase during the December meeting, leaving market participants unsure about the future of the hiking cycle.

"We expected Powell to talk tough and do his best to keep markets from taking the two successive 'skips' in interest rate hikes as a green light for risk assets," said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance. However, Zaccarelli expressed surprise at Powell's detailed language regarding the Fed's concerns about inflation, suggesting a possible rate increase in the near future.

In addition to the Fed's decision, investors closely analyzed the Treasury's plan for future bond sales and the latest ISM manufacturing index, which revealed unexpected contraction in the industry for October. Looking forward, traders will keep an eye on Thursday morning's data, including jobless claims, labor costs, productivity, and factory orders. Crucial statistics on nonfarm payrolls, the unemployment rate, and hourly wages are set to be released on Friday morning.

Thursday also promises a busy day of corporate earnings, with Starbucks, Eli Lilly, Peloton, and Fox reporting before the bell, followed by Apple, Paramount, Carvana, and DraftKings after the market closes.

With more than half of the trading week behind us, the major indexes are on track to finish higher. Since the week's start, the Dow Jones Industrial Average has gained 2.6%, the S&P 500 has climbed 2.9%, and the Nasdaq Composite has advanced 3.3%, showcasing the strong performance of technology stocks.

Noteworthy after-hours stock movements include SolarEdge, which plummeted by 23% following their disappointing third-quarter report and a bleak outlook for current-quarter revenue. On the other hand, Qualcomm's shares jumped 3.6% after exceeding analysts' estimates in their fiscal fourth quarter. Airbnb, the vacation rental platform, experienced a 3% fall due to underwhelming revenue guidance.

As the week progresses, market participants will continue to monitor earnings reports and economic data to gauge the overall health and direction of the stock market.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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