U.S. stock futures hovered near flat territory early Wednesday, as traders awaited another round of quarterly earnings and weighed easing geopolitical optimism against mixed corporate results.
By 03:39 ET, Dow futures were up 38 points, or 0.1%, S&P 500 futures gained 10 points, or 0.1%, and Nasdaq 100 futures were little changed.
Futures steady ahead of earnings
Wall Street ended Tuesday’s session mixed, with investors questioning lofty stock valuations and the sustainability of recent equity gains.
Uncertainty surrounding global diplomacy also lingered. President Donald Trump said a long-awaited meeting with Chinese President Xi Jinping in South Korea “may not happen,” clouding hopes of a thaw in U.S.-China trade tensions. Still, Trump added that if the meeting does take place, it would be “very successful,” saying he expects a “fantastic” and “fair” deal with Xi.
Meanwhile, a separate summit between Trump and Russia’s Vladimir Putin was postponed after Moscow rejected calls for a ceasefire in Ukraine.
Netflix pressured by Brazil tax dispute
Netflix (NASDAQ:NFLX) shares plunged more than 6% in after-hours trading after the streaming leader posted an operating margin for the third quarter that fell short of expectations.
At 28%, the figure missed estimates, largely due to costs tied to a dispute with tax authorities in Brazil. The company noted that without this charge, its margin would have topped forecasts.
The Brazil issue is expected to weigh on full-year results as well, with Netflix lowering its annual margin guidance to 29% from 30%.
Even so, the company delivered higher revenue and profit, supported by record advertising sales, subscriber growth, and price increases.
Tesla earnings on deck
Tesla (NASDAQ:TSLA) is next in line to report results after the closing bell, following its record quarterly deliveries earlier this month. Those figures were fueled by a push to clear inventory before the phase-out of a $7,500 U.S. electric vehicle tax credit.
Investors are now watching to see whether the tax credit’s expiration will dent future demand. Analysts at Vital Knowledge remarked that “earnings reports for this company are nearly irrelevant as the bulk of the narrative and equity value isn’t related to the core business of manufacturing and selling autos but instead hope and hype for products that won’t impact income statement in a material way for years to come.”
Tesla CEO Elon Musk has long championed technologies such as full self-driving and robotaxis as the company’s next major growth engines. Tesla’s stock has climbed more than 16% this year, aided by a proposed new pay package for Musk and additional share purchases by the CEO.
Other major earnings expected before the U.S. open include telecom giant AT&T (NYSE:T), energy services group GE Vernova (NYSE:GEV), and biotech firm Thermo Fisher (NYSE:TMO).
Hermes shows modest China recovery
In Europe, shares of Hermes (EU:RMS) edged higher after the luxury house reported a “very slight improvement” in demand from China, its key market, during the third quarter.
CFO Eric de Halgouet said the improvement reflected firmer property prices and stronger stock markets in major Chinese cities.
The company’s quarterly revenue rose 9.6% to €3.88 billion, just shy of forecasts calling for 10% growth, according to Visible Alpha data cited by Reuters. The update aligns with recent cautious optimism from rivals L’Oreal (EU:OR) and LVMH (EU:MC) about stabilization in the Chinese luxury segment.
Gold rebounds after heavy sell-off
Gold prices bounced back Wednesday after a steep decline in early Asian trading, supported by bargain-hunting and a softer U.S. dollar.
Traders also turned their attention to U.S. inflation data due later this week, which could shape expectations for Federal Reserve policy ahead of its October 28–29 meeting. With the ongoing government shutdown delaying several key releases, Friday’s CPI may be one of the few timely economic indicators available.
Spot gold rose 1.1% to $4,153.24 per ounce as of 03:32 ET, after dipping near $4,000 earlier in the session. U.S. gold futures climbed 1.2% to $4,156.79.
The metal had plunged more than 5% on Tuesday—its biggest one-day drop since 2020—after briefly touching record highs earlier in the week amid geopolitical uncertainty and expectations of looser U.S. monetary policy.