To The Moon

U.S. stock index futures fell on Tuesday as investors awaited key employment data this week, while prospects of an extended restrictive monetary policy kept Treasury yields elevated, pressuring stocks.

Market Snapshot

At 8:20 a.m. ET, Dow e-minis were down 135 points, or 0.40%, S&P 500 e-minis were down 19.75 points, or 0.46%, and Nasdaq 100 e-minis were down 81.5 points, or 0.54%.

Pre-Market Movers

$HP Inc. (HPQ)$ was up 2.5% in premarket trading to $26.32 after the stock was upgraded to Buy from Underperform at BofA and the price target was raised to $33 from $25. Separately, Warren Buffett’s Berkshire Hathaway (BRK.B) sold another 5.1 million shares of HP in recent days as it continues to reduce its stake in the maker of personal computers and printers. Berkshire now holds 100.9 million shares of HP worth about $2.6 billion based on the current market price of HP shares.

$Oddity Tech (ODD)$, the beauty-products company, said it expects its third quarter “to be our strongest third quarter ever.” Oddity forecast year-over-year net revenue growth for the third quarter of between 29% and 31%, higher than its initial guidance of 18% to 23%. It also said it expects gross margin of 68.5%, about 100 basis points higher than its previous guidance. Analysts at Truist upgraded their recommendation on Oddity to Buy from Hold. The stock jumped 13%.

$WK Kellogg (KLG)$ was initiated with a Sell rating and a price target of $11 by analysts at Goldman Sachs. The stock fell 4.3% in premarket trading to $12.77. WK Kellogg declined 9.1% on Monday and Kellanova (K) fell 6% following the spinout of the two companies from the former Kellogg. WK Kellogg houses the North America cereals business, while Kellanova is home to snack brands such as Pringles.

$Eli Lilly (LLY)$ reached an agreement to acquire radiopharmaceutical company $Point Biopharma Global(PNT)$ for $12.50 a share or $1.4 billion. Point Biopharma shares surged 84% to $12.33.

$Airbnb (ABNB)$ was downgraded to Sector Weight from Overweight at Keybanc without a price target, with the analysts saying the company’s margins have reached a near-term peak and revenue growth could decelerate to 11% year over year in 2024 as room night and average daily growth rate moderates. The stock declined 2.8% in premarket trading.

$Meta Platforms (META)$ is weighing a proposal that would charge Europeans almost $14 a month for ad-free versions of Instagram or Facebook, The Wall Street Journal reported. Meta would charge customers if they don’t agree to let the company use their digital activity to target ads. The moves are part of Meta’s efforts to navigate European Union privacy rules. Meta shares fell 0.2%.

$Ford (F)$ and $General Motors (GM)$ have laid off roughly an additional 500 workers combined as the ongoing strike by the United Auto Workers forces the auto makers to idle more factories. Separately, GM said it received a counteroffer from the UAW to the company’s most recent proposal. A GM spokesman told the Detroit Free Press there was a meeting Monday between the GM and UAW. “The union did present a counter to our proposal from Sept. 21. We are assessing, but significant gaps remain.” Ford declined 0.5% and GM fell 0.4%.

$McCormick (MKC)$, the parent of flavor brands such as French’s, Frank’s RedHot and McCormick spices, reported fiscal third-quarter adjusted earnings of 65 cents a share, matching analysts’ estimates, but revenue of $1.68 billion that came up short. The stock was down 3%.

Market News

Microsoft CEO Says Tech Giants Battling for Content to Build AI

$Microsoft (MSFT)$ chief executive Satya Nadella said Monday tech giants were competing for vast troves of content needed to train artificial intelligence, and complained Google was locking up content with expensive and exclusive deals with publishers.

Testifying in a landmark U.S. trial against its rival Google, the first major antitrust case brought by the U.S. since it sued Microsoft in 1998, Nadella testified the tech giants' efforts to build content libraries to train their large language models "reminds me of the early phases of distribution deals."

Oil Extends Drop Below $90 as Rate Concerns Overshadow Tightness

Oil fell for a fourth day as macroeconomic concerns overshadowed physical market tightness to cloud the demand outlook.

West Texas Intermediate traded near $88 a barrel after declining by 2.2% in the previous session. A global rout in sovereign bonds and shares extended into Tuesday, while the dollar strengthened as traders digested messaging that the Federal Reserve will need to leave borrowing costs higher for longer.

Tesla Relaunches Rear-Wheel-Drive Model Y in the U.S. at Cheaper Price

$Tesla(TSLA)$ quietly has relaunched a rear-wheel-drive version of its popular Model Y car in the U.S., and at a lower price.

The new version of the electric-vehicle maker's best-selling car starts at $43,990, according to the company's website. It replaces the all-wheel-drive Model Y, which cost $3,750 more and was discontinued last month. The rear-wheel-drive version previously was discontinued in the U.S. in 2021 but has remained available in Europe and China.

Tesla also updated its Model Y in China earlier this week, Reuters reported. The update includes a new wheel design but the starting price remained unchanged at around $36,000.

TikTok Halts Indonesia Online Shop to Comply With New Rule

TikTok will suspend its online-retail operation in Indonesia from Wednesday to comply with curbs on social commerce, a big setback for the Chinese-owned startup in one of its fastest-growing markets.

The company will stop facilitating e-commerce transactions on TikTok Shop Indonesia from 5 p.m. Jakarta time on Oct. 4, it said in a statement Tuesday. The company said that its priority is to remain compliant with laws and regulations and that it will coordinate with the Indonesian government for its next steps.