Wall Street set to extend losses after mixed earnings from Alphabet and Tesla
Wall Street is set for a moderately lower open on Thursday after mixed results from Alphabet and Tesla, while a fresh surge in oil prices revived concerns about inflation and interest rates.
Futures for the Dow Jones, S&P 500 and Nasdaq were all down around 0.3%.
This would see losses extended from the day before, when the Nasdaq dropped 0.6% to 25,691, the S&P fell 0.1% to 7,499, and the Dow finished essentially flat, down six points at 52,219.
After the closing bell, Alphabet Inc (NASDAQ:GOOG) beat revenue and earnings forecasts, with cloud revenue surging 82%, but its shares fell in after-hours trading after the Google owner raised its planned capital expenditure to as much as $205 billion this year. Shares were down 4.1% in pre-market trading.
Tesla Inc (NASDAQ:TSLA) shares declined 6.2% after reporting its first quarter of negative free cash flow in more than two years as operating costs surged.
European markets were also lower, led by a 1.7% decline in Milan as semiconductor manufacturer STMicroelectronics (NYSE:STM) fell sharply after weaker second-quarter earnings and soft third-quarter guidance disappointed investors following a three-month rally.
In commodities, WTI crude has jumped 4.1% on Thursday morning to above $90.65 a barrel, its highest level in six weeks, as US Central Command confirmed another round of strikes against Iran.
“Strikes between the US and Iran show no sign of easing, and the Houthis said they targeted two oil tankers in the Red Sea yesterday, raising fears that the conflict is widening,” said Henry Allen at Deutsche Bank.
This has raised fresh supply fears as Saudi Arabia has redirected oil exports to the Red Sea port of Yanbu, prompting “fresh concerns about a more prolonged stagflationary shock”, with investors pricing in higher inflation and a more hawkish path for central banks.
Fed futures now indicate a 36% chance of an interest-rate increase next week. The European Central Bank is expected to leave rates unchanged when it announces its latest decision later today.
Before the bell, earnings are due from defence groups RTX and Lockheed Martin, telecoms names T-Mobile and Nokia, and other heavyweights including Thermo Fisher, TotalEnergies, Blackstone, Freeport-McMoRan, Comcast and Honeywell.
After the close, attention turns to Intel and SAP, along with gold miner Newmont.
