4:14pm: Tesla shares tumble
The Dow closed Thursday down 251 points, 0.8%, at 33,414, the Nasdaq Composite fell 128 points, 0.1%, to 13,186 and the S&P 500 declined 37 points, 0.9%, to 4,278. The small-cap Russell 2000 index slid 25 points, 1.5%, to 1,704.
The market took a hit Thursday afternoon following comments from Federal Reserve Chair Jerome Powell, who warned that more interest rate hikes may be in the cards.
“Incoming data over recent months show ongoing progress toward both of our dual mandate goals —maximum employment and stable prices,” Powell said.
But, “in any case, inflation is still too high,” he said. “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal.”
Meanwhile, shares of Tesla fell more than 9% after the company's third-quarter results fell short of expectations and Elon Musk warned of Cybertruck delivery delays.
12:50pm: Stocks fall as Powell leaves door ajar for rate hike
US stocks fluctuated after Federal Reserve Chair Jerome Powell said further interest rate hikes could be forecoming as the Central Bank remains committed to bringing inflation down to its 2% target.
The Dow Jones initially rallied more than 100 points before slipping back into the red with similar moves for the S&P 500 and Nasdaq Composite.
In a speech to the Economic Club of New York on Thursday, Powell noted that given the fast pace of the tightening, there may still be “meaningful tightening” in the pipeline.
“We are attentive to recent data showing the resilience of economic growth and demand for labor,” he said, per a copy of his prepared remarks.
“Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.”
He said that elevated geopolitical tensions amid the Israel-Hamas war pose risks to global economic activity.
“Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain,” he said.
“Speaking for myself, I found the attack on Israel horrifying, as is the prospect for more loss of innocent lives.”
He concluded by stating that, given the uncertainties and risks, the central bank is “proceeding carefully.”
“We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks.”
12:00pm: Stocks tread water ahead of Powell's speech
US stocks were little changed ahead of a speech by Federal Reserve chairman Jerome Powell which could give some indication as to his reading of the US economy, and prospects for inflation and interest rates.
At mdday, the Dow Jones Industrial Average was down 13.12 points at 33,651.96, the S&P 500 was down 1.21 points at 4,313.39 and the Nasdaq Composite was up 4.92 points at 13,319.23.
Chris Beauchamp at IG said: "Should Powell stick to a more cautious tone than his colleagues then equities might catch a bid. But if the chairman himself is hawkish again then the selling might only intensify into the end of the week.”
US existing home sales fell for a fourth consecutive month in September, dipping below the 4 million annualised rate mark for the first time in 13 years owing to high mortgage rates and low availability.
Sales of previously occupied residences declined to a seasonally adjusted annualised rate of 3.96 million in September, down 2% from the prior month and 15.4% from a year earlier.
But the figure was still above the market forecast for 3.89 million sales.
9:40am: Stocks edged higher ahead of Powell's speech
US stocks opened higher ahead of a key speech from Federal Reserve chair Jerome Powell and as investors wade through another batch of earnings.
Shortly after the opening bell, the Dow Jones Industrial Average was up 24.65 points, 0.1%, at 33,689.73, the S&P 500 was up 5.08 points, 0.1%, at 4,319.68 and the Nasdaq Composite was up 40.05 points, 0.3%, at 13,354.36.
Powell is set to deliver what could be a key policy address, with markets bracing that the central bank leader may still talk tough on inflation.
Hawkish words could push bond yields even higher with the 10-year Treasury close to the 5% level and similarly send a fragile equity market lower.
A key part of the Fed’s considerations has been the robust labour market and figures out today showed no signs the jobs market was cracking.
New applications for state unemployment aid fell below 200,000 for the first time since January last week.
Jobless claims, considered a proxy for lay-offs, totalled 198,000 during the week ending October 14, the labour department said, the first time they were below 200,000 since the week of January 28 and the lowest level since the week before that.
Economists expected 212,000 applications, an increase from the previous week’s upwardly revised level of 211,000.
Stocks on the include VMWare, down 5.1%, after the Financial Times reported Beijing is weighing holding up the chipmaker Broadcom’s $69 billion acquisition of the cloud software company - a move that would come soon after Washington toughened rules to block Chinese access to high-performance semiconductors.
Netflix soared 14.4% after its strong earnings but Tesla steered off course, down 6.0%, after its numbers and poorly received analyst call.
Philip Morris fell 2.2% after its numbers while AT&T rose as it raised free cash flow and Ebitda guidance alongside strong third quarter figures.
7:00am: Subdued start expected as earnings continue
US stocks are expected to make a subdued start as investors reflect on earnings from Tesla and Netflix and await jobs data before the market open.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% lower, while those for the S&P 500 were little changed, and contracts for the Nasdaq 100 futures were up 0.1%.
It’s another busy day of earnings with results from tobacco manufacturer Philip Morris, carrier American Airlines, mining company Freeport-McMoran, and regional bank Western Alliance all due before the bell
In economic news, new applications for unemployment aid are forecast to have increased to 212,000 in the week ended October 14, compared with 209,000 claims a week prior.
Stocks to watch include Tesla, down 4.5% in pre-market trading, changing hands at $231.60, after the Elon Musk-led carmaker posted third quarter results that missed expectations.
Faring better is Netflix, up 13.6% in pre-market trading, thanks to third quarter earnings that landed ahead of expectations and significant subscriber growth.
AT&T rose 3.6% after raising guidance for free cash flow for the full year and posting adjusted earnings and revenue ahead of Street expectations.
Third-quarter adjusted earnings were 64 cents per share, the company said in a statement, higher than the 62 cents per share forecast, while revenue of $30.4 billion, was narrowly higher than the $30.2 billion estimated.