Wall Street’s main indexes were set to open higher on Thursday as Tesla and Netflix kicked U.S. earnings season into high gear, while Treasury yields eased off session highs ahead of remarks from Federal Reserve Chair Jerome Powell.
Netflix soared 15% in premarket trading after the world’s No. 1 streaming company by subscriber count said it was raising prices for some of its plans in the United States, Britain and France after adding 9 million users in the third quarter.
Tesla, however, slid 6.1% as the electric-vehicle (EV) maker missed Wall Street estimates for third-quarter gross margin, profit and revenue.
CEO Elon Musk said on Wednesday he was concerned about the impact of high interest rates on car buyers, adding that the EV maker was hesitant about its plans for a factory in Mexico.
Legacy automakers Ford Motor and General Motors lost around 1% each.
Yields on benchmark Treasury notes slipped from session highs, but the 2-year yield, which best reflects short-term interest rate expectations, was still at a 17-year peak at 5.2228%, while that on the 10-year note stood at 4.9364%, near the 5% level last seen in 2007.
“Is the 10-year going to breach 5% in yield … I think the answer to that is yes, that it can in turn provoke even more volatility,” said Russell Hackmann, President of Hackmann Wealth Partners.
“That’s a psychologically important issue that maybe could trigger a real sell off in stocks … you got a jittery market out there.”
Powell is scheduled to speak at 12 p.m. ET, while other Fed officials including Chicago Fed President Austan Goolsbee, Atlanta’s Raphael Bostic and Philadelphia’s Patrick Harker will speak later in the day.
Fed policymakers on Wednesday signaled a pause in hiking interest rates for another couple of months as they wait for signs of progress in their fight against inflation and the potential for the recent rise in long-term yields to do some of their work for them.
Meanwhile, jobless claims fell to 198,000 in the week ended Oct. 14, from a revised 211,000 a week earlier, indicating a still-tight labor market.
Wall Street’s main indexes ended around 1% lower on Wednesday as bond yields surged.
At 8:47 a.m. ET, Dow e-minis were up 10 points, or 0.03%, S&P 500 e-minis were up 5.75 points, or 0.13%, and Nasdaq 100 e-minis were up 54.5 points, or 0.36%.
On the earnings front, Blackstone slipped 4.9% as the world’s largest private equity firm’s third-quarter distributable earnings fell more than expected due to a decline in asset sales in its real estate business.
American Airlines cut its 2023 forecast for adjusted profit as it struggles to overcome the impact of higher jet fuel prices and expensive labor contracts. Its shares were last up 3%.
Lam Research fell 1.8% as the chip-manufacturing equipment supplier forecast second-quarter revenue slightly below Wall Street estimates.
Las Vegas Sands rose 5.1% following the casino operator’s better-than-expected third quarter profit and revenue.
AT&T added 4.9% after the telecom firm raised its annual free cash flow forecast.