By Peter Bergman (MoneyAmped.com)
US stock futures edge up as investors anticipate a new wave of essential earnings reports from major global technology companies. Shares in Tesla (NASDAQ:TSLA) surge in premarket trading as the electric-vehicle giant announces plans to expedite the release of affordable models, which investors anticipate will reinvigorate dwindling consumer interest.
The U.S. Senate has approved a bill that would prohibit TikTok from operating in the United States unless its Chinese parent company sells the app within the next nine to twelve months.
Stock Market Futures Are Showing Gains
U.S. stock futures edged predominantly higher on Wednesday as investors eagerly anticipated a plethora of crucial earnings reports from major technology companies and carefully analyzed other significant corporate results.
At 03:17 ET (07:17 GMT), the Dow futures contract experienced a modest increase of 19 points or 0.1%. Similarly, S&P 500 futures saw a gain of 14 points or 0.3%, while Nasdaq 100 futures showed a more significant increase of 125 points or 0.7%.
The averages all rose in the previous session, supported by the strong performance of chipmaking stocks such as Nvidia (NASDAQ: NVDA) and Micron Technology (NASDAQ:MU), as well as a significant increase in shares of streaming giant Spotify (NYSE:SPOT). Notably, Spotify achieved a historic milestone by reporting a quarterly profit exceeding one billion dollars.
Meanwhile, GE Aerospace, a prominent player in the aerospace industry, raised its full-year earnings forecasts. At the same time, Danaher, a leading life sciences company, exceeded Wall Street’s expectations for its latest quarterly income. As a result, the stock prices of both companies experienced an upward surge.
In a broader sense, stocks in New York received a boost from lackluster U.S. business activity data in April. This has raised expectations that the American economy might be decelerating, potentially alleviating some of the upward pressure on inflation.
Tesla Shares Surge as Timeline for “More Affordable” Models Is Expedited
Tesla has announced plans to accelerate the schedule for launching “more economical” models of its vehicles, causing a surge in premarket trading for the electric vehicle company despite first-quarter results falling short of Wall Street expectations.
Similar to other players in the electric vehicle industry, Tesla has faced challenges in stimulating consumer demand and facing increased competition. In a filing, the company announced its plans to expedite the release of new models, moving ahead of its previously announced start of production in the second half of 2025. Tesla also announced the addition of a more affordable model to its lineup of vehicles.
Tesla’s stock declined earlier this month following a report by Reuters stating that the company had abandoned its intentions to develop an affordable car known as the Model 2. Elon Musk, the CEO, has refuted the story.
In other news, several large companies are set to release their most recent quarterly earnings this week. One of these companies is Meta Platforms, the owner of Facebook, which is scheduled to announce its results after the market closes on Wednesday. Tech giants Microsoft (NASDAQ: MSFT) and Google-parent Alphabet (NASDAQ:GOOGL) are also scheduled to announce their financial results on Thursday.
The US Senate has approved the TikTok Divestment-Or-Ban Bill
Legislators in the U.S. Senate have overwhelmingly supported a measure that aims to prohibit TikTok from operating within the United States unless its Chinese parent company, ByteDance, sells off the app within the next nine to twelve months.
The legislation, which has already been approved by the U.S. House of Representatives and incorporated into a comprehensive bill that includes additional military funding for Ukraine, is now awaiting President Joe Biden’s signature.
Boasting a staggering 170 million users in the U.S., TikTok has solidified its position as a powerhouse in the realm of social media. However, the fact that a Chinese company owns it has sparked worries about the security of user data in the United States, further escalating the already tense relationship between Washington and Beijing. TikTok has stated that it has never shared and will not share U.S. user data with the Chinese government.
As per Reuters, TikTok is preparing to contest the ban. The American Civil Liberties Union, a non-profit organization headquartered in New York, has also contended that prohibiting TikTok or compelling ByteDance to divest the app would establish a concerning worldwide precedent for an overbearing government influence on social media platforms.
Oil Slightly Increases
Oil prices rose during European trade on Wednesday as traders turned their attention away from the easing tensions in the Middle East and towards upcoming indicators of the U.S. economy and interest rates.
According to the American Petroleum Institute, data released on Tuesday revealed that U.S. oil inventories declined by 3.2 million barrels during the week ending April 19. This defied predictions of an increase of 1.8 million barrels.
The reading usually signals a comparable pattern from official inventory data, which is expected to be released later on Wednesday. This suggests that there is some tightening in U.S. markets as the summer season, known for increased travel, draws near.
Markets are eagerly anticipating the release of first-quarter gross domestic product data from the U.S. on Thursday, as it will provide further insights into the world’s largest fuel consumer. The data is anticipated to align with the projections for U.S. interest rates, as a robust economy offers the Federal Reserve greater flexibility to maintain higher interest rates for an extended period.
The June expiration of Brent oil futures saw a modest increase of 0.2%, reaching $88.55 per barrel. Similarly, West Texas Intermediate crude futures experienced a slight uptick of 0.1%, reaching $83.46 per barrel at 03:17 ET.
