Big tech climbed in late hours as Tesla Inc. kicked off the “Magnificent Seven” earnings season with solid results. Bond yields rose on bets the Federal Reserve will take a measured approach on rate cuts.
Following a stock-market selloff on Wednesday, Wall Street pointed to a rebound led by its most-influential group. A $300 billion exchange-traded fund tracking the tech-heavy Nasdaq 100 (QQQ) gained after the close of regular trading.
Tesla jumped 9% as Elon Musk’s electric-vehicle giant also indicated it expects another strong quarter of deliveries, saying it anticipates higher volumes for the full year.
“Earnings season is heating up. We believe there is continued upside ahead for stocks, especially now that we are entering a seasonally strong period of the year for markets,” said David Laut at Abound Financial.
After last week’s rally to fresh all-time highs, equities have taken a breather, with investors fretting over a number of near-term risks. The next three weeks capture big tech earnings, October’s payrolls report, and the US election, followed by the Fed meeting.
“Despite the possibility of more volatility as we get deeper into earnings season and close in on the November election, the market’s longer-term outlook remains solid,” said Daniel Skelly at Morgan Stanley’s Wealth Management. “And even though this week’s move is a reminder that even the strongest trends have setbacks, so far, this has been a run-of-the-mill pullback for the major indexes.”
The S&P 500 fell 0.9%. The Nasdaq 100 dropped 1.6%. The Dow Jones Industrial Average slipped 1%. International Business Machines Corp. declined as its revenue underwhelmed. T-Mobile US Inc. raised its forecast for subscribers after a strong quarter.
Treasury 10-year yields rose three basis points to 4.23%. The dollar rose. The yen hit the lowest in almost three months, reviving concern that Japan may intervene. The loonie slid after the Bank of Canada stepped up the pace of easing.