Futures tied to the S&P 500 and the Nasdaq rose on Wednesday, with Tesla at the helm of gains after its quarterly results, while most megacap growth names also offered support.
Market Snapshot
At 7:50 a.m. ET, Dow e-minis were down 12 points, or 0.03%, S&P 500 e-minis were up 9.75 points, or 0.19%, and Nasdaq 100 e-minis were up 103 points, or 0.59%.
Pre-Market Movers
Tesla (TSLA) - Tesla reported first-quarter adjusted earnings of 45 cents a share on revenue of $21.3 billion, missing analysts’ estimates that called for a profit of 49 cents a share on revenue of $22.2 billion. Net income in the quarter fell 55% from a year earlier to $1.1 billion, while revenue declined 9%. Operating profit margin in the period was 5.5%, below expectations of 6.6%. The stock, however, was rising 12.1% after the electric-vehicle maker said it updated its “future vehicle lineup to accelerate the launch of new models,” including “more affordable models.”
Meta (META) - Meta Platforms gained 2.3%. The parent of Facebook and Instagram is expected by analysts to report first-quarter profit of $4.30 a share on revenue of $36.1 billion, up 26% from a year earlier. The report is expected to show the benefits of a strengthening advertising environment, as well as ads and targeted content powered by artificial-intelligence software.
The U.S. Senate passed a bill late on Tuesday that would ban TikTok in the United States if its owner, the Chinese tech firm ByteDance, failed to divest the popular short video app.
Visa (V) - Visa’s fiscal second-quarter adjusted earnings, which strip out one-time items, were $2.51 a share, better than analysts’ forecasts of $2.44. Revenue rose 10% to $8.78 billion and topped estimates of $8.62 billion. Payments volume in the period rose 8% and cross-border volume jumped 16%. Visa shares rose 2.4%.
Texas Instruments (TXN) - Texas Instruments posted first-quarter earnings of $1.11 billion, or $1.20 a share, down from year-earlier profit of $1.71 billion, or $1.85 a share. The earnings, however, beat analysts’ expectations of $1.07 a share and shares of the chip maker jumped 7.6%. Revenue fell 16% to $3.66 billion, but came in better than estimates of $3.61 billion. For the second quarter, Texas Instruments said it expects revenue of between $3.65 billion to $3.95 billion, with profit ranging from $1.05 to $1.25 a share. Analysts had been calling for revenue of $3.7 billion and and earnings of $1.15 a share.
Boeing (BA) - Boeing on Wednesday reported a narrower-than-expected loss and less cash burn than analysts expected, and said it is stabilizing its supply chain as it grapples with its latest 737 Max safety crisis. The shares gained 4.1% in premarket trading.
AT&T (T) - AT&T reported first-quarter earnings that beat Wall Street’s expectations, but missed on sales and some key subscriber metrics in the period. Free cash flow in the period was $3.1 billion, up from $1 billion a year earlier. Shares of the telecommunications giant were up 3.3%.
Humana (HUM) - Humana was up 2.9% after the health insurer’s first-quarter earnings and revenue topped analysts’ expectations and it raised its guidance for Medicare Advantage annual membership growth.
Enphase Energy (ENPH) - Enphase Energy posted first-quarter adjusted earnings and revenue that missed analysts’ estimates and the solar inverter provider’s forecast for second-quarter revenue of $290 million to $330 million was below expectations of $347 million and year-earlier revenue of $711 million. The stock slumped 8.3%.
Seagate Technology (STX) - Seagate Technology‘s fiscal third-quarter adjusted earnings beat estimates and revenue of $1.66 billion fell 11% from a year earlier but came in roughly in line with forecasts. For its fourth quarter, Seagate said it expects revenue of $1.85 billion, give or take $150 million, with adjusted profit of 70 cents a share, plus or minus 20 cents. Wall Street had called for revenue of $1.84 billion and earnings of 59 cents a share. Shares of the disk-drive company rose 2.3%.
Hasbro (HAS) - Hasbro gained 4.8% after the toymaker reported a smaller-than-expected drop in first-quarter sales and handily beat profit estimates.
Boston Scientific (BSX) - Boston Scientific rose 4% after the medical device maker raised its annual profit forecast.
HashiCorp (HCP) - HashiCorp shares rose 1.7% in premarket and jumped 19% on Tuesday after The Wall Street Journal reported International Business Machines was nearing an agreement to acquire the cloud-software provider. A deal for HashiCorp could come together in the coming days, the Journal reported, citing people familiar with the matter.
Molson Coors (TAP) - Molson Coors was falling 2% after analysts at Citi cut their rating on the beer maker to Sell from Neutral and reduced their price target on the shares to $56 from $66.
Wabtec (WAB) - Wabtec advanced 6.1% after the heavy industrial parts maker raised its full-year profit forecast.
Market News
Tesla Speeds Plan for Cheaper Cars, Calming Fears Over Strategy
Tesla Inc. is accelerating the launch of less-expensive cars in a bid to revive sagging demand following another disappointing quarter.
The electric-vehicle maker aims to start production of new models as soon as this year, well ahead of the late-2025 timing it had previously pledged. The decision sent shares soaring, stemming what has been the worst rout among stocks in the S&P 500 Index this year.
The news overshadowed a big shortfall in Tesla’s first-quarter earnings, sales and margins. Chief Executive Officer Elon Musk is betting that lower-priced models will gin up demand for EVs, which has slowed globally and forced other automakers to rethink their electrification plans. It’ll also help sustain the company as it works to bring some of Musk’s lofty ideas into reality, including a fleet of autonomous robotaxis, a ride-hailing service and humanoid robots.
US Senate Passes TikTok Divestment-Or-Ban Bill, Biden Set to Make It Law
The U.S. Senate voted by a wide margin late Tuesday in favor of legislation that would ban TikTok in the United States if its owner, the Chinese tech firm ByteDance, fails to divest the popular short video app over the next nine months to a year.
It now heads to President Joe Biden, who already committed to signing the TikTok legislation should it make it through both chambers of Congress.
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