Nasdaq leads stocks lower as Wall Street braces for Tesla earnings

Recent labor market data has painted a picture of a cooling labor market where workers are quitting their jobs less, but layoffs aren’t rampant pushing unemployment higher.

Wednesday’s release of the Federal’s Reserve October Beige Book further supported this narrative.

“Many Districts reported low worker turnover, and layoffs reportedly remained limited,” the report said. “Demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth.”

The commentary fits with the most recent data from from the Bureau of Labor Statistics released On Oct. 1 which showed that the quits rate, a sign of confidence among workers, ticked down to 1.9% in August from July’s 2%, marking the slowest pace since June 2020. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed 5.31 million hires were made during the month, down from 5.41 million in July. The hiring rate hit 3.3% in August, down from 3.4% in July. Excluding the pandemic, the hiring rate was at its lowest level since 2013 in August.

US stocks currently dominate the global equity market. Fresh projections from JPMorgan Asset Management project that lead won’t decline much over the next decade either as the impact of artificial intelligence permeates through the US equity market.

In the firm’s 2025 Long-Term Capital Market Assumptions released on Monday, the team projected that the US share of the total global equity market will fall from 64% currently to 60% in 2037. Still, as seen in the chart below, the US (in green) would maintain a large lead over the estimated second-largest share of the global equity market, China (in red).

JPMorgan Wealth Management’s global head of multi-asset and portfolio solutions Monica Issar told Yahoo Finance during a media roundtable on Monday that the US dominance will continue as artificial intelligence benefits expand beyond a few large tech names that have dominated the market rally over the past year.

Issar said there’s two catalysts for US equity dominance: revenue production and margin improvement. The first will come from the companies currently spending on AI spending somewhere else. This plays out as tech companies buy AI chips from the likes of Nvidia (NVDA) and, as they need more power, forcing these AI operators to spend with companies in the Utilities (XLU) and Energy (XLE) sectors.

The other catalyst, margins, comes as AI makes companies more efficient and eliminates simple work, eventually cutting down costs. Issar added that as those impacts spread across the 493 companies in the S&P 500 not in the “Magnificent Seven,” it makes her team “feel more comfortable around the US equity dominance.”

“It’s going to be the US predominantly, and then obviously Europe will follow, because you’re starting to see some adoption there,” Issar said.

Oil dropped more than 1% on Wednesday as traders looked for signs of Middle East tensions easing and new data showed that US stockpiles surged.

West Texas Intermediate (CL=F) dropped to trade above $70 per barrel, while Brent (BZ=F), the international benchmark price hovered near $75.

The latest government data showed crude inventories increased by 5.5 million barrels last week, versus analysts expectations for an increase of 1 million barrels, per Bloomberg data.

Wednesday’s price movement comes after a 4% rise in Brent prices over the prior two sessions as traders watched the Middle East crisis continue to play out in Gaza and Lebanon.

The lack of recent headlines over Israel’s retaliatory plans against Iran following an Oct. 1 missile attack has also weighed on prices.

“Crude futures are under pressure as no news from Israel is taken as negative news to oil prices, in that any counterattack maybe delayed until after the US elections,” Dennis Kissler, senior vice president at BOK Financial, said on Wednesday.

Tesla’s (TSLA) earnings after the bell are set to kick off the start of quarterly reports from the initial Magnificent Seven tech cohort.

Leading into the print, the group is dragging down the Nasadaq 100 (^NDX). Apple (AAPL), Alphabet (GOOGL, GOOG), Amazon (AMZN), Meta (META), and Nvidia (NVDA) were all off more than 1% on Wednesday.

Below is a look at how the index is performing today.

Trump Media & Technology Group stock (DJT) rose more than 4%, extending double-digit gains from the day prior, to hit its highest level since July as investors bet on former President Donald Trump’s improved odds of winning the November election in less than two weeks.

Yahoo Finance’s Alexandra Canal reports:

Shares in the company, the home of the Republican nominee’s social media platform Truth Social, have seen a recent surge as both domestic and overseas betting markets shift in favor of a Trump victory, with prediction sites like Polymarket, PredictIt, and Kalshi all showing Trump’s presidential chances ahead of those of Democratic nominee and current Vice President Kamala Harris.

Read more here.

It’s been a tough morning of news for stocks within the Dow Jones Industrial Average (^DJI). The major index is off about 0.5%, led by declines in 3M Company (MMM), Coca-Cola (KO), and McDonald’s (MCD).

Coca-Cola and 3M both traded lower after the companies reported quarterly results. Coca-Cola shares slipped as the soda giant posted weaker revenue than last year, though both its quarterly revenue and its earnings per share did top Wall Street’s estimates. Similarly, 3M beat analysts’ expectations for earnings per share and revenue, but its stock slid in early trading.

Meanwhile, McDonald’s was the biggest laggard in the Dow, falling more than 5% on Wednesday. The Centers for Disease Control and Prevention said the company’s Quarter Pounder burgers had been linked to an E. coli outbreak in some states, with most illnesses in Colorado and Nebraska.

Sales of existing homes fell in September as house hunters remained on the fence about buying a home despite mortgage rates easing during the month.

Existing home sales slipped 1.0% from August’s tally to a seasonally adjusted annual rate of 3.84 million, the National Association of Realtors said Wednesday. That marked the lowest rate since October 2010. Economists polled by Bloomberg expected a pace of 3.88 million in September.

On a yearly basis, sales of previously owned homes were 3.5% lower in September. The median home price rose 3.0% from last September to $404,500, marking the 15th consecutive month of annual price increases.

“Home sales have been essentially stuck at around a 4 million-unit pace for the past 12 months,” NAR chief economist Lawrence Yun said in a press release.

There have been significant challenges that have weighed on sales activity, including a lack of inventory, escalating prices, and elevated mortgage rates. Last month, however, those factors turned around.

The Federal Reserve cut its benchmark rate by half a percentage point in September. While the central bank doesn’t set mortgage rates, its actions influence their direction of movement.

Mortgage rates hit the lowest level since February 2023 ahead of the Fed decision to ease, while listing inventory picked up.

But overall, that hasn’t been enough to entice buyers.

“Some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election,” Yun said.

Boeing (BA) stock slipped nearly 1% on Wednesday after the airplane maker reported another large quarterly net loss as it awaits a crucial labor vote set for later in the day.

Yahoo Finance’s Pras Subramanian reports:

Boeing reported a net loss of $6.17 billion, bringing total losses in 2024 so far to nearly $8 billion. It said operating cash flow was negative $1.34 billion. The company reported revenue of about $17.8 billion, down about 1% from the same period last year. The figures closely matched the preliminary numbers it released last week.

Boeing said its operating cash flow reflected “lower commercial widebody deliveries, as well as unfavorable working capital timing, including the impact of the IAM work stoppage.” A year ago, Boeing’s operating cash flow stood at $22 million.

Read more here.

The Dow led US stocks lower on Wednesday, as doubts about rate cuts weighed on investors getting ready for a busy day of earnings highlighted by Boeing (BA) and Tesla (TSLA).

The Dow Jones Industrial Average (^DJI) fell more than 250 points, or 0.6%. The tech-heavy Nasdaq Composite (^IXIC) slid about 0.5%, while the benchmark S&P 500 (^GSPC) was off more than 0.3%.

Another round of major companies reported earnings Wednesday morning.

In the spotlight was troubled planemaker Boeing (BA), which reported a $6 billion loss ahead of a key union vote later today that will determine whether its workers continue their month-long strike. Boeing stock edged down less than 1% premarket.

Meanwhile, AT&T (T) stock jumped 3% after its third quarter earnings surpassed expectations as the telecommunications giant added more wireless subscribers than expected.

One of the big three credit unions, TransUnion (TRU), climbed 2.4% after topping estimates.

On the other hand, Coca-Cola (KO) fell 1.5% despite a mostly positive report. Hotel behemoth Hilton (HLT) dropped 3.5% after its earnings.

Here’s a look at how the group performed relative to Wall Street’s forecasts (according to Bloomberg consensus estimates):

Coca-Cola: Adjusted earnings per share of $0.77 vs. $0.74 expected, adjusted net operating revenue of $11.85 billion vs. $11.61 billion expected

AT&T: Adjusted EPS of $0.60 vs. $0.57 expected, revenue of $30.21 billion vs. $30.45 billion expected

Boeing: Adjusted loss per share of $10.44 vs. the $10.31 expected, revenue of $17.84 billion vs. $17.89 billion expected

Hilton: Adjusted EPS of $1.92 vs. $1.84 expected, net revenue of $2.87 billion vs. $7.92 billion expected

TransUnion: Adjusted earnings per share of $1.04 vs. $1.02 expected, revenue of $1.09 billion vs. $1.06 billion expected

Starbucks (SBUX) also posted preliminary quarterly results Tuesday that shocked the Street, sending its shares down around 3.5% premarket Wednesday.

Tesla (TSLA), T-Mobile (TMUS), and IBM (IBM) report earnings after the bell.

Economic data: MBA Mortgage Applications, (week ending Oct. 18); Existing Home Sales, (Sept.); Federal Reserve Beige Book

Earnings: Tesla (TSLA), Boeing (BA), AT&T (T), IBM (IBM), Coca-Cola (KO), GE Vernova (GEV), T-Mobile (TMUS), Las Vegas Sands (LVS), Hilton Worldwide Holdings (HLT), Whirlpool Corporation (WHR), Mattel (MAT), CME Group (CME), General Dynamics (GD), ServiceNow (NOW), Viking Therapeutics (VKTX)

Here are some of the biggest stories you may have missed overnight and early this morning:

Boeing posts massive quarterly loss with union vote looming

McDonald’s slumps as E. coli outbreak linked to quarter-pounder

Coca-Cola posts Q3 earnings beat amid higher prices

Arm to end Qualcomm use of its chip design IP as feud escalates

Oil falls as traders eye US stockpiles, Middle East

Nvidia CEO: Design flaw in Blackwell AI chips now fixed