Negative Reaction To Earnings News May Weigh On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly lower open on Thursday, with stocks likely to see further downside after coming under pressure over the course of the previous session.

The downward momentum on Wall Street comes amid a negative reaction to corporate earnings news from companies like Tesla (TSLA) and IBM Corp. (IBM).

Shares of Tesla are tumbling by 3.7 percent in pre-market trading after the electric vehicle maker reported weaker than expected third quarter earnings despite record sales.

Tech giant IBM is also seeing substantial pre-market weakness after reporting third quarter earnings that exceeded analyst estimates but slowing growth in its core cloud computing business.

On the other hand, shares of Honeywell (HON) are likely to see initial strength after the industrial giant reported third quarter results that beat estimates on both the top and bottom lines.

Ongoing concerns about rising geopolitical tensions may also weigh on Wall Street after the Trump administration announced sanctions on Russia's two largest oil companies.

The Treasury Department announced sanctions against Rosneft and Lukoil, citing Russia's "lack of serious commitment to a peace process to end the war in Ukraine."

President Donald Trump recently expressed some optimism about ending the drawn-out Russia-Ukraine war before suddenly canceling a planned meeting with Russian President Vladimir Putin.

Trump's sudden shifts in opinion, particularly with regard to trade relations with China, have recently been a key source of volatility on Wall Street.

Following the lackluster performance seen during Tuesday's session, stocks moved mostly lower during trading on Wednesday. The major averages all moved to the downside on the day, with the Dow pulling back off Tuesday's record closing high.

The major averages climbed well off their worst levels in late-day trading but remained firmly negative. The Nasdaq slumped 213.67 points or 0.9 percent to 22,740.40, the Dow slid 334.33 points or 0.7 percent to 46,590.41 and the S&P 500 fell 35.95 points or 0.5 percent to 6,699.40.

The slump by the tech-heavy Nasdaq was partly due to a steep drop by shares of Netflix (NFLX), with the streaming giant plunging by 10.1 percent to a five-month closing low.

Netflix came under pressure after the company reported weaker than expected third quarter earnings, citing a dispute with Brazilian tax authorities.

Shares of Texas Instruments (TXN) also tumbled by 5.6 percent after the chipmaker provided disappointing fourth quarter guidance.

On the other hand, shares of Intuitive Surgical (ISRG) soared by 13.9 percent after the robotic-assisted surgery systems maker reported third quarter results that beat expectations.

The weakness on Wall Street also came amid renewed uncertainty about trade relations between the U.S. and China following the latest remarks from President Donald Trump.

During a lunch with Republican lawmakers in the White House Rose Garden on Tuesday, Trump said he expects to be able to reach a "good deal" with Chinese President Xi Jinping but also suggested a meeting between the two leaders may 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."

The major averages fell to their lows of the session after a report from Reuters indicated the Trump administration is considering a plan to curb an array of software-powered exports to China.

Reuters said the plan is not the only option on the table but noted it would make good on Trump's threat to bar "critical software" exports to China in retaliation for Beijing's latest round of rare earth export restrictions.

Semiconductor stocks came under significant selling pressure over the course of the session, with the Philadelphia Semiconductor Index tumbling by 2.4 percent.

Considerable weakness also emerged among airline stocks, as reflected by the 1.9 percent loss posted by the NYSE Arca Airline Index.

Retail, housing and networking stocks also saw notable weakness on the day, while energy stocks bucked the downtrend amid a sharp increase by the price of crude oil.

Commodity, Currency Markets

Crude oil futures are soaring $2.94 to $61.44 a barrel after surging $1.26 to $58.50 a barrel on Wednesday. Meanwhile, after tumbling $43.70 to $4,065.40 an ounce in the previous session, gold futures are jumping $53.80 to $4,119.20 an ounce.

On the currency front, the U.S. dollar is trading at 152.54 yen versus the 151.97 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1597 compared to yesterday's $1.1610.

Asia

Asian stocks turned in a mixed performance on Thursday, with rising tensions between the United States and China and mixed earnings, including a sharp drop in Tesla's profits, keeping investors on edge.

According to reports, the Trump administration is weighing export restrictions against China that would bar the purchase of a wide swath of critical software in response to China's tightened rare earth exports.

China's Shanghai Composite Index edged up 0.2 percent to 3,922.41, reversing early losses as investors braced for a key meeting between Chinese President Xi Jinping and U.S. President Donald Trump slated for next week.

Hong Kong's Hang Seng Index climbed 0.7 percent to 25,967.98 as investors awaited a communiqué outlining the government's economic, political and social agenda from the four-day Communist Party conclave in Beijing.

Japanese markets extended losses after reaching a new record high earlier in the week. The Nikkei 225 Index tumbled 1.4 percent to 48,641.61 as newly appointed Prime Minister Sanae Takaichi ordered a fresh package of economic measures aimed at easing the burden of inflation on businesses and households.

The broader Topix Index settled 0.4 percent lower at 3,253.78. Among the prominent decliners, Tokyo Electron and Disco Corp lost 3-4 percent.

Seoul stocks ended sharply lower after hitting record peaks earlier in the day as the Bank of Korea held its benchmark interest rate steady as widely expected to avoid spurring a housing market rally. The Kospi slumped 1.0 percent to 3,845.56.

Australian markets ended marginally higher, reversing early losses. While higher oil prices boosted energy stocks, miners and banks ended on a sluggish note.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index increased by 0.5 percent to 13,377.10, with gains seen across most sectors.

Europe

European shares are mixed on Thursday as investors digest a wave of corporate earnings and watch trade developments between the United States and China.

Meanwhile, EU countries today formally adopted a 19th package of sanctions against Russia for its war against Ukraine that includes a ban on Russian liquefied natural gas imports.

"It's a significant package that targets main Russian revenue streams through new energy, financial, and trade measures," the Danish rotating presidency of the EU said.

While the German DAX Index is down by 0.2 percent, the French CAC 40 Index is up by 0.2 percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

In corporate news, German software maker SAP fell 2 percent after third-quarter revenue came in below analysts' estimates.

French telecom operator Orange gained 1 percent. The company raised its full-year guidance after reporting third-quarter core profit above market expectations.

Sodexo shares slumped 8 percent. The caterer forecast slower revenue growth in 2026, citing challenges in its U.S. business.

Thales, a defense and aerospace group, added 2 percent after reporting a 9 percent rise in sales for the first nine months of 2025 and reaffirming its full-year guidance.

Carmaker Renault declined 1.4 percent despite surpassing Q3 revenue forecast.

Dassault Systemes plunged 16 percent after the software firm trimmed its full-year revenue growth guidance.

STMicroelectronics, a global leader in semiconductor manufacturing, lost nearly 5 percent after it forecast fourth quarter revenue below estimates.

Volvo Car shares soared 34 percent. The Swedish carmaker reported a small rise in Q3 profit on the back of sweeping cost cuts.

U.K. pest control firm Rentokil jumped 10 percent as Q3 organic revenue growth topped forecasts.

Holiday Inn owner Intercontinental Hotels dropped 1.2 percent despite Q3 room revenue coming in above estimates.

Lloyds Banking Group rose about 1 percent. The lender reported a sharp drop in third-quarter profit and lowered its annual guidance.

Consumer goods maker Unilever gained 2 percent as it reported a 3.9 percent rise in underlying sales for the third quarter of 2025.

Nokia shares climbed 9 percent. The Finnish communications equipment maker reported third-quarter profit ahead of market expectations.

Swiss drugmaker Roche fell 2.3 percent after nine-month sales missed expectations.

Contract drug manufacturer Lonza rallied 3.5 percent after confirming its full-year guidance.

U.S. Economic News

The National Association of Realtors is scheduled to release its report on existing home sales in the month of September at 10 am ET. Existing home sales are expected to increase to an annual rate of 4.06 million in September after dipping to a rate of 4.00 million in August.

Also at 10 am ET, Federal Reserve Vice Chair for Supervision Michelle Bowman is due to testify before a Senate Banking Committee hearing on oversight of financial regulators.

Federal Reserve Governor Michael Barr is scheduled to deliver remarks on "Community Investment" at the Novogradac 2025 Fall New Markets Tax Credit Conference at 10:25 am ET.

At 11 am ET, the Treasury is Department is due to announce the details of this month's auctions of two-year, five-year and seven-year notes.