Dow futures steady ahead of key Powell speech; Netflix, Tesla earnings in focus

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Dow futures steady ahead of key Powell speech; Netflix, Tesla earnings in focus
Credit: © Reuters.

Investing.com -- U.S. stock futures stabilized Thursday after the previous session’s weakness with risk sentiment hit by rising bond yields, ahead of a key speech by Fed chair Jerome Powell.

By 06:50 ET (10:50 GMT), the Dow Futures contract was up 25 points, or 0.1%, S&P 500 Futures traded 6 points, or 0.1%, higher and Nasdaq 100 Futures climbed 40 points, or 0.3%.

The main indices on Wall Street closed sharply lower Wednesday after rising bond yields, with the benchmark 10-year Treasury yield climbing to its highest level since mid-2007, prompted investors to exit the more risky assets.

The 30-stock Dow Jones Industrial Average closed over 300 points, or 0.3%, lower, while the benchmark S&P 500 fell 1.3% and the tech-heavy Nasdaq Composite dropped 1.6%.

Powell set to speak in New York

Investors are starting to fret that a strong labor market and sticky inflation will prompt the U.S. Federal Reserve to hike interest rates one more time before the end of the year.

New York Fed President John Williams added to these concerns, saying on Wednesday that the Fed will likely keep rates higher for longer for “some time” to rein in inflation toward its 2% target.

This brings Fed Chair Jerome Powell into the spotlight, as he is scheduled to speak later in the session at the Economic Club of New York. Investors will be hoping to receive hints as to the direction of monetary policy heading into the last few months of the year.

Other Fed officials, including Atlanta Fed President Raphael Bostic , Chicago Fed President Austan Goolsbee and Philadelphia Fed President Patrick Harker , are also scheduled to appear.

Israel to allow aid into Gaza

Investors will also keep an eye on developments in the Middle East, with Israel saying it would not block aid for civilians entering Gaza from Egypt, after talks with U.S. President Joe Biden, as long as those supplies do not reach Hamas

Israel's bombardment and siege of Gaza is in retaliation for the deadly attacks on Israeli citizens by Hamas militants on Oct. 7.

Netflix impresses as subscribers surged in 3Q

The quarterly earnings season continues Thursday, with results due from the likes of American Airlines (NASDAQ: AAL ), telecoms company AT&T (NYSE: T ), tobacco giant Philip Morris (NYSE: PM ), railroad operator CSX (NASDAQ: CSX ), asset manager Blackstone (NYSE: BX ) as well as a number of regional banks.

Netflix (NASDAQ: NFLX ) stock surged over 13% premarket after the streaming giant reported that paid subscribers rose 8.76 million in the third quarter, boosted by its efforts to restrict sharing of accounts, well above expectations for just over 6 million.

On the flip side, Tesla (NASDAQ: TSLA ) stock fell almost 5% as the electric vehicle manufacturer’s recent wave of price cuts weighed on margins, with gross margins excluding credits slowing to 16.1% in the third quarter from 18.7% in the previous quarter.

Elsewhere, economic data on deck include weekly jobless claims , existing home sales for September and the Philadelphia Fed manufacturing index for October.

Oil retreats on potential supply increase

Oil prices fell Thursday, handing back a lot of the previous session’s sharp gains, as markets awaited more developments in the Israel-Hamas war and the outlook for global supply.

By 06:50 ET, the U.S. crude futures traded 1.2% lower at $86.19 a barrel, while the Brent contract dropped 1.4% to $90.23 a barrel. 

Crude prices climbed about 2% in the previous session on concerns of disruptions to global supplies after Iran called for an oil embargo on Israel over the conflict in Gaza and after the U.S., the world's biggest oil consumer, reported a larger-than-expected inventory draw.

However, the Organization of the Petroleum Exporting Countries has shown few signs of taking any immediate action on Iran's call, easing worries over potential disruptions.

Prices have also been pressured after a deal was reached between the Venezuelan government and the country's political opposition to ensure fair 2024 elections, potentially allowing the country’s oil flows to reenter the global market after years of sanctions.

(Oliver Gray contributed to this item.)

 

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