US stock futures fell sharply on Thursday, October 22, with Nasdaq futures leading losses after earnings from Tesla and Meta Platforms renewed concerns over AI spending, while rising crude oil prices and escalating tensions in West Asia added to investor caution.
Futures tied to the Dow Jones Industrial Average fell about 0.6%, while S&P 500 futures lost 1% and Nasdaq-100 futures dropped nearly 1.6%. The decline came despite the S&P 500 extending its winning streak in the previous session.
Here are five key factors behind today’s move in US stock futures and what investors should watch next:
1. Tesla shares fall despite earnings beat
Tesla shares dropped nearly 5% in premarket trading despite the electric vehicle maker reporting third-quarter adjusted earnings of $0.48 per share, above the $0.44 expected by analysts.
Revenue came in at $28.05 billion, slightly below the $28.13 billion estimate, while adjusted EBITDA of $3.90 billion exceeded expectations of $3.66 billion, according to the estimates cited in the source material.
Investors are assessing Tesla’s spending plans, including higher investments expected in 2027 and 2028 in robotics, the Cybercab and its Terafab project. The company’s outlook for future growth and capital expenditure remains a key focus.
2. Meta earnings and AI spending in focus
Meta Platforms shares slipped in premarket trading despite the Facebook and Instagram parent reporting quarterly revenue above expectations.
The company’s earnings were affected by legal expenses related to a settlement involving teen mental health. Meta also announced a two-for-one stock split.
3. Crude oil nears $112 on Iran tensions
Oil prices rose sharply as concerns mounted over a possible escalation in the West Asia.
Brent crude futures gained around 2.7% to $111.75 a barrel, while US West Texas Intermediate crude rose more than 2% to around $99.30.
The New York Times reported, citing US officials, that the US and Israel had drawn up plans for renewed strikes against Iran after next month’s US midterm elections.
4. Treasury yields fall as investors seek safety
US Treasury yields declined as investors turned towards government bonds amid pressure on equities.
The benchmark 10-year Treasury yield fell seven basis points to 5.069%, while the two-year yield declined six basis points to 4.761%, according to the market data provided.
5. Anthropic IPO and US economic data
Investors will also track reports that AI developer Anthropic could file for an initial public offering as soon as Friday, CNBC reported, citing people familiar with the company’s plans.
The potential listing could provide another test of investor appetite for AI-related businesses amid renewed scrutiny of technology valuations and spending.
On the economic front, weekly US initial jobless claims are due on Thursday. Investors will also assess earnings from Procter & Gamble, Lockheed Martin, Valero Energy and Honeywell for signals on consumer demand, industrial activity and corporate profitability.