S&P futures experienced a decline on Thursday, weighed down by drops in major companies such as Meta Platforms and Tesla, coupled with a surge in oil prices amid escalating geopolitical tensions. Futures for the Dow Jones Industrial Average declined by 356 points, representing a decrease of 0.7%. S&P 500 futures declined by 1%, while Nasdaq-100 futures experienced a decrease of 1.7%. Tesla shares experienced a decline exceeding 3%, whereas Meta saw a decrease of nearly 2%. The declines occurred despite the former’s third-quarter results surpassing estimates – although its automotive revenue was underwhelming – while the latter not only exceeded revenue expectations but also provided optimistic guidance. Technology, more broadly, faced pressure amid ongoing concerns regarding expenditures on artificial intelligence.
Advanced Micro Devices experienced a decline exceeding 4%, whereas Micron Technology and Nvidia saw decreases of 3% and 2%, respectively. Neocloud leader CoreWeave, with elevated bond yields and credit default swaps, experienced a decline of nearly 4% as well. The move comes as Nvidia CEO Jensen Huang stated on Thursday that demand for neoclouds is “off the charts”. However, he added that capital is limited and hindering growth. JPMorgan traders noted that Wednesday’s bullish “tone reversed overnight” because Meta shares rolled over in the premarket and chatter increased “over renewed Iran kinetic-risk post US mid-term election.” Additionally, “underlying price actions and feedback from our trading desk also suggested the still fragile narrative around AI financing concerns and the lack of conviction/re-grossing from the recent tech reversal,” they said in a note to clients.
Oil prices, meanwhile, jumped after the source reported, citing sources, that the U.S. and Israel have plans for renewed strikes against Iran following next month’s midterm U.S. elections. President Donald Trump also told reporters late Wednesday that Washington is not negotiating with Tehran and that something will happen “fairly soon.” International benchmark Brent crude futures experienced an increase of nearly 3%, trading above $111 per barrel. West Texas Intermediate crude futures increased by 2%, surpassing the $99 per barrel mark.
Investors sought refuge in U.S. Treasuries, reflecting their pursuit of a secure investment option. The benchmark 10-year Treasury note yield experienced a decline of over 9 basis points, settling at 5.048%. The yield on the 2-year note decreased by 9 basis points, now standing at 4.733%. The action follows a positive day on the market, with the S&P 500 achieving a three-day win streak. Europe’s Stoxx 600 index experienced a decline of 1% during morning trading, while France’s CAC 40 index saw a drop of 1.34%. South Korea’s Kospi experienced a decline of over 1%, whereas Japan’s Nikkei 225 saw a decrease of 0.73%. Hong Kong’s Hang Seng Index experienced a decline of over 2%. Mainland China’s CSI 300 experienced a decline of 0.37%.
