Overview
On Thursday, U.S. stocks saw gains, with the Nasdaq and S&P 500 closing higher, driven by a surge in Tesla shares and a slight pullback in Treasury yields. Tesla reported strong Q3 profits and forecasted significant sales growth, sending its stock soaring 21.9%. Despite the broader gains, the Dow Jones Industrial Average declined, as blue-chip stocks like IBM and Honeywell weighed on the index after disappointing earnings reports.
The yield on the 10-year Treasury note eased to 4.20%, after reaching a three-month high on Wednesday. Investors remained cautious due to ongoing uncertainty surrounding Federal Reserve rate cuts, corporate earnings, and the upcoming U.S. election.
- Dow Jones Industrial Average: Fell 0.33% to 42,374.36
- S&P 500: Gained 0.21% to 5,809.86
- Nasdaq Composite: Rose 0.76% to 18,415.49
Fear & Greed Index
Neutral – Investors remain cautiously optimistic as Treasury yields ease, but concerns linger about Federal Reserve policy and corporate earnings.
Sector Performance
- Winners:
- Consumer Discretionary: Driven by Tesla’s 21.9% surge, the sector rose 3.24%, leading market gains.
- Technology: Positive earnings from Tesla boosted tech stocks, while UPS also gained 5.28% after strong Q3 profits.
- Losers:
- Materials: Dropped 1.42% as Newmont slid following weak profits due to higher costs and lower production.
- Industrials: Boeing declined 1.18% as labor strikes continued, impacting production and earnings.
Key Movers
- Tesla (TSLA): Soared 21.9%, adding over $140 billion to its market cap, after reporting strong Q3 earnings and forecasting 20-30% sales growth for 2025.
- IBM (IBM): Fell 6.17% after missing Q3 revenue estimates, weighing on the Dow.
- Honeywell (HON): Dropped 5.10% after lowering its annual sales forecast due to weaker-than-expected performance.
- Southwest Airlines (LUV): Lost 5.56% after disappointing earnings and an agreement with Elliott Management on debt refinancing.
Economic Data
- Treasury Yields: The 10-year yield eased to 4.20% from its three-month high, relieving some pressure on stocks.
- S&P Global Flash PMI: Business activity in the U.S. increased in October, signaling strong demand.
- Jobless Claims: Weekly jobless claims fell unexpectedly, reflecting resilience in the labor market.
Outlook
With Treasury yields easing slightly and Tesla’s earnings giving tech stocks a boost, the market remains cautiously optimistic. However, investors are closely monitoring further earnings reports and economic data, particularly with ongoing uncertainty around the Federal Reserve’s rate policies and the U.S. presidential election. Defensive sectors like consumer discretionary and technology are expected to continue performing well, while sectors sensitive to rising costs, such as industrials and materials, could face further pressure.