Positive Reaction To Earnings News May Lead To Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks likely to move back to the upside after ending yesterday’s trading mostly lower.

Stocks may benefit from a positive reaction to earnings news from big-name companies such as IBM Corp. (IBM), Meta Platforms (META) and Tesla (TSLA).

Shares of IBM are surging by 9.5 percent in pre-market trading after the tech giant reported fourth quarter earnings that exceeded analyst estimates.

Facebook parent Meta is also seeing notable pre-market strength after reporting fourth quarter results that beat estimates on both the top and bottom lines.

Shares of Tesla may also move to the upside even though the electric vehicle maker reported fourth quarter earnings that missed expectations.

On the other hand, shares of Microsoft (MSFT) are plunging by 4.5 percent in pre-market trading after the software giant reported better than expected fiscal second quarter results but provided disappointing revenue guidance for the current quarter.

Stocks moved mostly lower over the course of the trading day on Wednesday, partly offsetting the notable rebound seen during Tuesday’s session. The major averages climbed off their worst levels in late-day trading but still closed in negative territory.

The Nasdaq slid 101.26 points or 0.5 percent to 19,632.32, the S&P 500 fell 28.39 points or 0.5 percent to 6,039.31 and the Dow dipped 136.83 points or 0.3 percent to 44,713.52.

The lower close on Wall Street came after the Federal Reserve announced its widely expected decision to leave interest rates unchanged following its first monetary policy meeting of 2025.

The Fed said it decided to maintain the target range for the federal funds rate at 4.25 to 4.50 percent in support of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

The decision to leave rates unchanged came as the Fed noted inflation remains “somewhat elevated” and reiterated its strong commitment to returning inflation to its 2 percent objective.

Notably, the Fed removed a phrase included in previous statements indicating that inflation has “made progress” towards it target.

The Fed’s latest decision comes after it lowered rates by a total of 100 basis points or 1.0 percentage point over the three previous meetings, beginning with a 50 basis point cut in September.

The central bank’s next monetary policy meeting is scheduled for March 18-19, when Fed officials will also provide their latest projections for rates, inflation and the economy.

CME Group’s FedWatch Tool is currently indicating a 77.6 percent chance the Fed will once again leave rates unchanged but a 22.3 percent chance of a quarter point rate cut.

A slump by shares of Nvidia (NVDA) also weighed on the markets, with the AI darling and market leader tumbling by 4.0 percent after surging by 8.8 percent on Tuesday.

Nvidia came under pressure after a report from Bloomberg said Trump administration officials are exploring additional curbs on the sale of the company’s chips to China.

Interest rate-sensitive housing stocks showed a significant move to the downside, dragging the Philadelphia Housing Sector Index down by 2.2 percent.

Considerable weakness was also visible among telecom stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca North American Telecom Index.

Software and commercial real estate stocks also saw notable weakness on the day, while airline and computer hardware stocks moved to the upside.

Commodity, Currency Markets

Crude oil futures are slipping $0.14 to $72.48 a barrel after tumbling $1.15 to $72.62 a barrel on Wednesday. Meanwhile, after edging down $1.10 to $2,793.50 an ounce in the previous session, gold futures are surging $30.60 to $2,824.10 an ounce.

On the currency front, the U.S. dollar is trading at 154.09 yen versus the 155.22 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0416 compared to yesterday’s $1.0421.

Asia

Asian stocks mostly rose in thin holiday trading on Thursday ,as investors digested broadly positive tech earnings from the U.S. and awaited clarity on U.S. President Trump’s tariff policies, especially on Canada, Mexico and China.

The yen edged up against the dollar and euro amid signs the Bank of Japan will keep raising interest rates as others cut. The dollar eased and gold ticked higher after the Federal Reserve signaled that it is in no rush to cut interest rates.

The European Central Bank meets later in the day, with markets expecting another 25 basis point rate cut, the first of four rate cuts expected for 2025.

Oil prices were mixed in Asian trading after falling in the previous session as official data indicated a rise in U.S. inventories.

Japanese markets edged up slightly as semiconductor stocks continued to recover from DeepSeek concerns. Tokyo Electron advanced 1.9 percent and Advantest surged 3.2 percent.

SoftBank Group shares fell 1.1 percent after a Financial Times report that the company is considering a $25 billion investment in OpenAI.

The Nikkei 225 Index rose 0.3 percent to 39,513.97, while the broader Topix index closed up 0.2 percent at 2,781.93.

Australian markets closed at record highs as softer inflation data released on Wednesday boosted hopes for interest rate cuts by the Reserve Bank.

The benchmark S&P/ASX 200 Index climbed 0.6 percent to 8,493.70, led by technology, mining and energy stocks. The broader All Ordinaries Index settled 0.5 percent higher at 8,745.90.

Karoon Energy jumped 7.7 percent after unveiling a $120 million share buyback plan. Zip Co. plummeted 25.4 percent after its quarterly earnings missed estimates.

New Zealand’s benchmark S&P/NZX-50 Index fell 0.6 percent to 12,928.38, posting its fourth decline in five trading days. Auckland International Airport shares fell nearly 2.5 percent.

Markets in China, Hong Kong, Singapore, South Korea, Malaysia and Taiwan remained closed for the Lunar New Year holidays.

Europe

European shares have moved mostly higher on Thursday after the European Central Bank lowered interest rates by 25 basis points, as widely expected.

While the German DAX Index is up by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.6 percent.

Official data revealed earlier in the day that the French economy contracted for the first time in nearly two years in the fourth quarter.

Gross domestic product shrank 0.1 percent sequentially after expanding 0.4 percent in the third quarter, according to first estimate from the statistical office INSEE.

Finland’s Nokia has rallied after its fourth quarter results beat estimates and the company provided an upbeat forecast for 2025.

ABB has also jumped. The Swiss industrial giant has announced plans for new $1.5 billion share buyback program after delivering strong order growth in fourth quarter of 2024.

Meanwhile, Deutsche Bank shares have slumped. The German lender posted a bigger-than-expected drop in fourth quarter and 2024 full-year profit as a result of legal provisions and restructuring costs.

Electrolux AB has also plunged. The home appliance maker has warned of more uncertainty for the North American market and skipped dividend for a third year in a row.

Chipmaker STMicroelectronics has also plummeted. The company expects sales to fall further in the first quarter of 2025 due to an ongoing downturn in its key markets.

Swedish fashion giant H&M has also shown a significant move to the downside after its fourth quarter sales missed forecasts.

U.S. Economic News

U.S. economic growth in the fourth quarter of 2024 fell short of economist estimates, according to a report released by the Commerce Department on Thursday.

The report said gross domestic product shot up by 2.3 percent in the fourth quarter after surging by 3.1 percent in the third quarter. Economists had expected GDP to jump by 2.6 percent.

The Commerce Department said the GDP growth in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment.

Meanwhile, a separate report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended January 25th.

The Labor Department said initial jobless claims fell to 207,000, a decrease of 16,000 from the previous week’s unrevised level of 223,000. Economists had expected jobless claims to slip to 220,000.

The report also said the less volatile four-week moving average edged down to 212,500, a decrease of 1,000 from the previous week’s unrevised average of 213,500.

At 10 am ET, the National Association of Realtors is scheduled to release its report on pending home sales in the month of December. Pending home sales are expected to rise by 0.4 percent in December after surging by 2.2 percent in November.