U.S. stock index futures were pointing to a slightly lower open on Thursday, suggesting that markets may extend the pullback seen in the prior session as traders react to disappointing corporate earnings and geopolitical developments.
Much of the early downward pressure is tied to investor response to quarterly results from several major companies, including Tesla, Inc. (NASDAQ:TSLA) and International Business Machines Corporation (NYSE:IBM).
Tesla shares were down 3.7% in pre-market trading after the electric vehicle maker posted weaker-than-expected third-quarter earnings, despite setting new delivery records. IBM also slipped sharply ahead of the opening bell: although the tech giant topped analysts’ profit estimates, growth in its cloud computing business slowed, tempering investor enthusiasm.
By contrast, Honeywell International Inc. (NASDAQ:HON) was expected to see early gains after the industrial group beat both revenue and earnings forecasts for the quarter.
Geopolitical uncertainty is also hanging over the market. The Trump administration unveiled new sanctions targeting Russia’s two largest oil producers, Rosneft and Lukoil. The United States Department of the Treasury said the move was a response to Russia’s “lack of serious commitment to a peace process to end the war in Ukraine.”
President Donald Trump had recently voiced optimism about the prospect of ending the Russia-Ukraine war, only to abruptly cancel a planned meeting with Russian President Vladimir Putin. Such sudden shifts in tone — including on U.S.-China trade policy — have been a notable source of volatility for the markets in recent months.
Stocks ended Wednesday lower across the board, extending losses from earlier in the week. The Nasdaq fell 213.67 points, or 0.9%, to 22,740.40; the Dow dropped 334.33 points, or 0.7%, to 46,590.41; and the S&P 500 slid 35.95 points, or 0.5%, to 6,699.40. All three major indexes bounced off their lows into the close but remained firmly in negative territory.
The tech-heavy Nasdaq was dragged down in part by a steep selloff in Netflix, Inc. (NASDAQ:NFLX), which plunged 10.1% to a five-month low. Netflix came under pressure after reporting weaker third-quarter earnings, citing a tax dispute in Brazil.
Texas Instruments Incorporated (NASDAQ:TXN) also weighed on the semiconductor sector, slumping 5.6% after issuing a soft fourth-quarter outlook. In contrast, Intuitive Surgical, Inc. (NASDAQ:ISRG) soared 13.9% after its robotic surgery systems business beat earnings expectations.
Renewed uncertainty over U.S.-China trade relations further pressured sentiment. Over lunch with Republican lawmakers at the White House on Tuesday, Trump said he hoped to reach a “good deal” with Chinese President Xi Jinping but signaled a meeting might not happen.
“Maybe it won’t happen,” Trump said. “Things can happen where, for instance, maybe somebody will say, ‘I don’t want to meet, it’s too nasty.’ But it’s really not nasty. It’s just business.”
Markets took another hit after a Reuters report said the Trump administration is weighing a proposal to restrict a range of software-related exports to China — part of its response to Beijing’s rare earth export curbs. The report noted the move is “not the only option” but would advance Trump’s threat to block “critical software” shipments.
Chipmakers bore the brunt of the selloff, with the PHLX Semiconductor Sector Index tumbling 2.4%. Airline stocks also weakened notably, as reflected by a 1.9% drop in the NYSE Arca Airline Index.
Retail, housing, and networking stocks saw additional pressure, while energy shares bucked the downtrend thanks to a sharp rise in crude oil prices.
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