Tech-heavy indices on Wall Street rose for the third straight day on Wednesday, October 21, boosted by shares of SpaceX, but futures in extended trading are under pressure after results from Meta, Tesla and IBM.
The regular trading session saw the Dow Jones gain as much as 360 points and close at the day’s high, near the mark of 53,000, while the S&P 500 and Nasdaq gained for the third day in a row, registering gains of 0.5% and 1% each. The indices were boosted by shares of SpaceX, which jumped 7% after its quarterly results blew past estimates, as did its guidance.
However, futures on the Dow Jones are down more than 100 points, while those on the Nasdaq are down nearly 200 points after companies like Meta, Tesla and IBM reported results after market close, all of which were above expectations, but some specific internals left the street disappointed.
Meta’s revenue and Earnings Per Share (EPS) were a beat on expectations and the mid-point of its Q4 revenue guidance of $74.5 billion also turned out to be higher than the street expectation of $73.7 billion. Shares gained over 5% in extended trading but cooled off from those highs and are now trading 2.1% higher.
Tesla’s results were also better than feared even as its core automotive business revenue declined 3% and revenue from the energy vertical fell 16% from last year. The slowdown was attributed to lower sales prices and battery supply issues. Tesla’s capex doubled, while free cash flow fell 62% from last year. The company also cut its capex guidance to $20 billion from $25 billion for the full year.
During the earnings call, Tesla CEO Elon Musk said that at least 50% of the Tesla shareholders need to approve any potential merger with SpaceX, which is “quite a high hurdle.” The stock is down 3.3% in extended trade.
Results from IBM too surpassed expectations across basic parameters, but the company’s gross margins narrowed from last year and it maintained its constant currency revenue growth guidance of 4% to 5%. The stock is down 4.5% in extended trade.
Crude oil prices remained above $110 a barrel after an attack on a Saudi Aramco facility that left two people dead but operations remained unaffected. News reports also suggest that Russia’s President Vladimir Putin is said to have suggested resuming trilateral talks with the US and Ukraine to end the war during the first 10 days of November.
Bond yields remained at near-similar levels, as did the US Dollar index.
Companies such as Procter & Gamble, Western Digital, Lockheed Martin and Blackstone will be reporting their numbers during the course of the day. Western Digital’s numbers will be important to watch as that could give an idea of the memory chip industry’s current standing.