Dow, S&P 500, Nasdaq fall as Netflix sinks, Tesla earnings loom
US stocks slid on Wednesday as investors fielded the latest wave of earnings in a busy day highlighted by Tesla (TSLA) and IBM (IBM), while assets like crypto and gold (GC=F) continued to struggle in a broad unwind of recent momentum trades.
The Dow Jones Industrial Average (^DJI) fell 0.7%, or over 300 points, while the S&P 500 (^GSPC) lost around 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led losses, down around 1%.
Meanwhile, gold (GC=F) recovered some losses after booking its biggest one-day decline in over a decade on Tuesday, and bitcoin (BTC-USD) plummeted below $110,000.
Wall Street, buoyed by a strong start to third quarter earnings thus far, is reassessing as the first wave of megacap tech earnings floods in. Tesla’s quarterly report is due after the bell, kicking off a round of “Magnificent Seven” updates that could test the resilience of the recent stock rally. Shares fell in the lead-up to the results.
Netflix (NFLX) stock dragged other techs lower, dropping some 10% after the streaming giant’s earnings missed expectations, thanks in part to a Brazil tax dispute. Shares in Mattel (MAT) also pulled back as the toymaker’s North American sales fell short.
Markets remain on alert or trade-war developments, with President Trump injecting fresh uncertainty around tensions with China and as a report said the president could consider steep restrictions on US software exports to China. At the same time, the US and India are reportedly closing in on a deal to cut tariffs on Indian exports to as low as 15% from the current 50%.
Official economic releases are still on hold as the US federal shutdown continues. The September Consumer Price Index report on Friday will be the next major data point for markets. The inflation print will help guide expectations ahead of the Federal Reserve’s meeting next week, where traders widely anticipate a 25 basis point interest rate cut.
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Tesla stock slips 1% after earnings miss estimates but revenue jumps
Tesla (TSLA) stock was down more than 1% on Wednesday after the company’s third quarter profit of $0.50 per share missed analyst expectations of $0.54.
The EV maker’s revenue surged to a record $28.10 billion versus estimates for $26.36 billion.
Tesla’s free cash flow came in at $3.99 billion, significantly ahead of the expected $1.25 billion. The metric measures the cash a company has on hand after paying all its operating expenses and capital expenditures.
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Stocks pull back as Netflix sinks, Tesla earnings on tap
Stocks pulled back with tech stocks dragging on the Nasdaq Composite (^IXIC) as Netflix (NFLX) tumbled 10% following its earnings miss.
The Dow Jones Industrial Average (^DJI) retreated 0.7%, down from a record high, while the S&P 500 (^GSPC) slid 0.5%.
All eyes were focused on Tesla (TSLA), which was set to report its third quarter earnings after the market close.
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Tech stocks sink as investors go risk-off
Tech (XLK) stocks sank on Wednesday as investors went risk-off, selling stocks within the sectors that have outperformed the broader market this year.
Communication Services (XLC) and Industrial (XLI) stocks also slipped, while the 10-year Treasury yield continued to hover below 4%.
Gold (GC=F) extended its sell-off from the prior session, while bitcoin declined more than 3%.
Investors went into more defensive areas of the market, buying up Consumer Staples (XLP), Energy (XLE), and Healthcare (XLV) stocks.
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Gold sinks, bitcoin plunges as debasement trade stumbles
Yahoo Finance’s Ines Ferré reports:
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Quantum computing stocks plunge as Google announces breakthrough
Quantum computing stocks broadly fell on Wednesday after Alphabet (GOOG, GOOGL) announced a breakthrough on its quantum hardware.
Rigetti (RGTI) and D-Wave Quantum (QBTS) were some of the most active stocks on Yahoo Finance during the afternoon as they fell by 13% and 17%, respectively.
Earlier in the day, Google announced that it ran a verifiable algorithm on its Willow quantum computing chip, demonstrating that it was able to complete a calculation 13,000 times faster than the fastest supercomputers. Google stock was flat, as technology stocks sold off.
The research, published in Nature, hints at a future when currently error-prone quantum computers can become useful for applications ranging from medicine to materials science. Quantum verifiability means the findings can be repeated on other quantum computers of the same caliber.
“The key thing about verifiability is it’s a huge step in the path toward a real world application,” Tom O’Brien, a staff research scientist at Google Quantum AI, told Bloomberg. “In achieving this result we’re really pushing us toward finding mainstream.”
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Meme stocks surge as investors pile back into speculative trades
Yahoo Finance’s Jake Conley reports:
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Jamie Dimon’s $3 billion bet on NYC is complete as JPMorgan officially opens midtown HQ
JPMorgan officially marked the opening of its latest headquarters with a ribbon-cutting ceremony in Manhattan on Tuesday. Yahoo Finance’s David Hollerith reports:
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Tech drags stocks lower as investors take profits on AI names
Tech stocks dragged down the Nasdaq (^IXIC) in late morning trading as investors likely took some profits.
With the major indexes near record highs, concerns about market frothiness have bubbled up as enthusiasm about artificial intelligence has continued to drive stocks higher this year since April’s tariff-related sell-off.
Five of the “Magnificent Seven” stocks moved lower: Nvidia (NVDA) and Apple (AAPL) stocks fell 1.5%, while Amazon (AMZN) dropped 1.2%. Meta (META) declined 0.1% on reports of layoffs in its AI division. And Tesla (TSLA) dropped 1.6% ahead of its earnings report after the bell.
Microsoft (MSFT) and Alphabet (GOOG, GOOGL) were the lone Magnificent Seven names in the green, both adding over 1%.
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Krispy Kreme stock rallies as meme craze continues
Krispy Kreme (DNUT) stock soared on Wednesday as it got scooped into the return of the meme stock frenzy.
Shares spiked more than 30% at the market open and were trading about 20% higher as of 10:45 a.m. ET.
“This is a throwback to 2021 … the hope, dreams, themes, and memes kind of environment that we were navigating in that time frame,” Matt Stucky, Northwestern Mutual Wealth Management’s chief portfolio manager, told Yahoo Finance.
Joining the likes of Beyond Meat (BYND), the company’s ticker page has been among the most active on the Yahoo Finance platform. On Wednesday morning, Krispy Kreme’s stock trading volume spiked to nearly 200 times the 20-day average for this time of day.
Krispy Kreme’s stock has been on a wild run in the past month after falling more than 67% in the past year. The doughnut maker has struggled to entice traditional investors following the fallout of its partnership with McDonald’s (MCD).
On Tuesday, though, NASCAR announced a sponsorship deal with Krispy Kreme. Last week, Krispy Kreme announced plans to open its first shop in Spain, along with plans for new stores in Brazil and its first location in Uzbekistan, expected to open by the end of 2025.
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Tesla Q3 earnings preview: Robotaxi, AI ambitions on the agenda following high-water mark in sales
Tesla’s rebound faces a test in its third quarter earnings report, expected after the market close on Wednesday.
Yahoo Finance’s Pras Subramanian reports:
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Stocks little changed at the open. Gold continues descent.
Stocks were muted at the open as the US government shutdown became the second-longest in history and corporate earnings flowed in.
The Dow Jones Industrial Average (^DJI) was roughly flat after closing on Tuesday at a fresh record high. The S&P 500 (^GSPC) was also little changed, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.1%.
In individual movers, Netflix (NFLX) stock dropped over 8% after it reported an earnings miss on Tuesday afternoon. All eyes are on Tesla (TSLA) next, which reports results after the bell.
The 10-year Treasury yield (^TNX) was little changed at 3.97% as it continues to hold below the 4% level.
Gold futures (GC=F), meanwhile, continued to fall after suffering their largest daily drop the day before. The precious metal dropped 0.7% to $4,077 an ounce.
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GE Vernova, Vertiv earnings buoyed by AI infrastructure tailwind
Two industrial companies that provide power equipment to data centers — GE Vernova (GEV) and Vertiv Holdings (VRT) — saw their stocks surge on Wednesday morning after reporting strong order pipelines and backlogs.
Shares of GE Vernova, which spun off from General Electric in 2024, climbed 4%, while Vertiv gained 6% ahead of the opening bell.
In the latest sign of demand for data center and AI infrastructure, GE Vernova said its orders rose 55% during the quarter, led by its power and electrification equipment division. Vertiv, meanwhile, touted an order growth rate of approximately 60% in Q3.
It’s not just the orders, however. — the companies said they saw favorable pricing, in excess of inflation and tariff costs. Profits at Vertiv were up about 63% year over year. GE Vernova swung to a profit of $1.64 per share after reporting a $0.35 loss per share the year before.
“This era of increased electricity investment has just started,” CEO Scott Strazik said in the earnings release. “The digital age is just beginning,” Vertiv executive chairman Dave Cote echoed in that company’s earnings.
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Why Beyond Meat stock is up about 600% in 3 days
Yahoo Finance’s Brian Sozzi reports:
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Samsung and Google’s new Galaxy XR headset lays the foundation for future smart glasses
Yahoo Finance’s Daniel Howley reports:
Samsung (005930.KS) and Google (GOOG, GOOGL) are taking aim at Meta (META) and the smart glasses market with the release of their new Android XR operating system.
Co-developed with partner Qualcomm (QCOM), Android XR is designed to power devices ranging from extended reality headsets to what the companies call AI glasses: smart glasses packed with Google’s Gemini AI assistant.
First up, Samsung’s new Galaxy XR mixed reality headset. Available starting today for $1,799, the Galaxy XR is similar to Apple’s (AAPL) Vision Pro and Meta’s Quest 3 in that it fully covers your field of view, but provides passthrough vision via its built-in external cameras.
Like the Vision Pro, it also includes internal eye-tracking cameras for navigation. External cameras and sensors also track your hand movements, allowing you to navigate the interface by pinching to grab various virtual windows and apps.
Though the Galaxy XR’s hardware hews closely to Apple’s and Meta’s headsets, Samsung and Google are banking on their Android XR and Google’s Gemini to be key differentiators for their device.
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Early US earnings point to best corporate results in 4 years
Bloomberg reports:
The proportion of US companies beating earnings expectations this quarter is the highest in more than four years, providing stock investors with relief at a time the rally is slowing.
About 85% of S&P 500 (^GSPC) firms to have reported third-quarter earnings so far have surpassed profit estimates, on course for the best performance since 2021, according to data compiled by Bloomberg Intelligence.
It’s still early in the season, given that less than a fifth of the index’s market capitalization has announced results, but it’s an indication that US profits remain strong in the face of tariffs and an uncertain economy.
A majority of S&P 500 firms typically surpass expectations, but this season stands out considering that analysts had set the bar higher by raising projections heading into the reporting period. Robust earnings and signs of sustained investment in artificial intelligence are countering threats to stocks from China trade tensions and the government shutdown.
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Good morning. Here’s what’s happening today.
Economic data: MBA mortgage applications (week ended Oct. 17
Earnings calendar: Tesla (TSLA), SAP (SAP), IBM (IBM), Thermo Fisher Scientific (TMO), AT&T (T), Lam Research Corporation (LRCX), GE Vernova (GEV), Amphenol Corporation (APH), Boston Scientific Corporation (BSX), CME Group (CME), O’Reilly Automotive (ORLY), Moody’s (MCO), Barclays (BCS), Vertiv Holdings (VRT), United Rentals (URI), Hilton Worldwide Holdings (HLT), Kinder Morgan (KMI), Crown Castle (CCI), Las Vegas Sands (LVS), Teck Resources (TECK), Northern Trust (NTRS), Southwest Airlines (LUV)
Here are some of the biggest stories you may have missed overnight and early this morning:
Stock investors are about to care about the calendar
Samsung, Google’s Galaxy XR headset takes on Apple’s Vision Pro
US said to near deal with India as Trump wobbles on Xi meeting
Early US earnings point to best corporate results in 4 years
Gold extends rout in volatile pullback from historic surge
Netflix stock falls after earnings miss
Tesla’s rebound faces test in earnings today
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Premarket trending tickers: DraftKings, Mattel and Humana
DraftKings (DKNG) stock rose 5% before the bell on Wednesday following the announcement that the American gambling company entered the prediction markets space with its acquisition of Railbird Technologies.
Mattel’s (MAT) earnings slumped 6% in premarket trading on Wednesday after missing Wall Street earnings on revenue for its third-quarter earnings report.
Humana (HUM) stock fell almost 3% before the bell on Wednesday. Over the last six months, Humana stock has been up %.
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Anthropic, Google in talks for multimillion-dollar cloud deal
Alphabet’s (GOOG, GOOGL) stock stepped higher in premarket after Bloomberg reported that the Google parent is in talks with Anthropic (ANTH.PVT) to provide the AI startup with cloud services.
Meanwhile, shares in Amazon (AMZN), also an Anthropic investor and cloud provider, slipped 1%.
Bloomberg reports:
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Google in focus on possible Anthropic cloud deal
Bloomberg reporting late yesterday Google (GOOG) is in talks with Anthropic (ANTH.PVT) on a cloud deal possibly worth “tens of billions” of dollars.
Good call out on this from Keybanc analyst Justin Patterson this morning:
“This is yet another sign that demand for AI remains strong and that leading frontier model providers are rapidly adding capacity (note: Anthropic’s investment would follow OpenAI’s recent series of announcements). For Google Cloud, we believe an expanded Anthropic partnership would be viewed as another sign that Google Cloud is gaining market share and that TPUs are strategically important.”
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What not to like from Texas Instruments’ earnings call
Commentary like this last night from Texas Instruments (TXN) CEO Haviv Ilan on his earnings call warrants watching out for in other semi earnings releases:
“The overall semiconductor market recovery is continuing, though, at a slower pace than prior upturns, likely related to the broader macroeconomic dynamics and overall uncertainty.”
Since we are still devoid of government economic data, clues on the economic outlook like this from public companies are more important than the norm. Along these lines, General Motors (GM) CFO Paul Jacobsen did slip into my chat with him the company is seeing a pickup in loan delinquencies.
