On Thursday, the S&P 500 and Nasdaq futures declined as Tesla began second-quarter earnings for mega-cap growth and technology firms on a depressing note, and Netflix declined as quarterly revenue fell short of analyst expectations.
Elon Musk, CEO of Tesla (TSLA.O), hinted on Wednesday that he may lower electric car costs once more in “turbulent times,” despite the fact that his fierce price war is reducing the company’s own profit margins.
Despite Tesla beating quarterly profit expectations, shares of the electric car manufacturer fell 3.5% in premarket trade as a result of Musk’s remarks.
According to Victoria Scholar, head of investment at Interactive Investor, “Tesla has been cutting prices numerous times to try to preserve demand amid the macroeconomic backdrop of sluggish global growth and a softening consumer.”
“However, this has been impacting its profit margins.”
The tech-heavy Nasdaq (.IXIC) has gained 37.2% so far this year, helped by a ferocious rally in mega cap growth and technology stocks on confidence over artificial intelligence, a strong U.S. economy, and expectations that the Federal Reserve was drawing to a close to its aggressive rate hike cycle.
Netflix (NFLX.O) dropped 7.0% after disappointing Wall Street with second-quarter revenue that fell short of analyst expectations. Netflix is a pioneer in streaming entertainment.
IBM (IBM.N), a provider of enterprise software, declined 1.0% on Wednesday after reporting second-quarter earnings that fell short of Wall Street forecasts due to a drop in mainframe computer sales as companies cut back on technology expenditures.
The Nasdaq 100 e-minis were down 124.25 points, or 0.78%, while the S&P 500 e-minis were down 6.75 points, or 0.15%, at 4:35 a.m. ET. The Dow e-minis were up 44 points, or 0.12%.
On Wednesday, the Dow recorded its longest winning streak in nearly four years as investors assessed Goldman Sachs earnings. Meanwhile, major regional banks in the United States surged on news that their deposits had largely stabilised and their net interest income had increased following the demise of Silicon Valley Bank in the first quarter, which had sparked an industry-wide uproar.
United Airlines (UAL.O) increased 2.6% among other results-driven moves after improving its full-year profit outlook following the publication of its highest-ever quarterly earnings on the back of booming foreign travel demand.
Taiwanese chipmaker TSMC had a 2.7% decline in its U.S.-listed shares after issuing a 10% sales decline forecast for 2023.
