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Tesla rose 3.4% in premarket trading as its quarterly profit
benefited from a string of price increases for its cars. That
helped offset production challenges, but Chief Executive Elon
Musk said it could hurt demand.
Positive earnings reports from Tesla and streaming giant Netflix
Inc have of late boosted megacap growth stocks, which have been
under pressure from rising interest rates.
Shares of Apple Inc, Amazon.com Inc and Alphabet Inc also gained
between 0.2% and 0.4%.
While market participants cheered the positive results, they
continue to await anxiously a Federal Reserve meeting next week
where policymakers are expected to raise interest rates by 75
basis points to curb runaway inflation.
The rate decision will be followed by the crucial second-quarter
U.S. gross domestic product data, which is likely to be negative
again.
By one common rule of thumb, two quarters of negative GDP growth
would mean the United States is already in a recession.
"The backdrop for U.S. corporate earnings looks challenging.
With slowing economic growth, a strong US dollar and margins
looking stretched, we suspect S&P 500 companies will struggle to
meet the optimistic expectations embedded in analyst forecasts,"
said Thomas Mathews, markets economist at Capital Economics.
Analysts expect aggregate year-on-year S&P 500 profit to grow
5.9% for the second quarter, down from the 6.8% estimate at the
start of the three-month period, according to Refinitiv data.
At 6:53 a.m. ET, Dow e-minis were down 96 points, or 0.3%, S&P
500 e-minis were down 7 points, or 0.18%, and Nasdaq 100 e-minis
were up 6.25 points, or 0.05%.
Falling oil prices hit Chevron Corp, which fell 2.4%, while
other energy companies including Marathon Oil Corp, Occidental
Petroleum Corp and Exxon Mobil Corp dropped between 2.3% and
4.2%.
(Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru;
Editing by Arun Koyyur)
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