Meta and Tesla Earnings Lift U.S. Stocks, IBM Beats Expectations
U.S. stock indices closed higher on Wednesday, driven by strong results from Meta Platforms and Tesla, alongside third-quarter figures from International Business Machines Corp. that exceeded Wall Street estimates. The S&P 500 ended the session 0.6% higher, while the Nasdaq 100 added 1.1% and the Dow Jones Industrial Average rose 0.7%. The Russell 2000, tracking small-cap stocks, gained 0.3%.
U.S. stock indices closed higher on Wednesday, driven by strong results from Meta Platforms and Tesla, alongside third-quarter figures from International Business Machines Corp. that exceeded Wall Street estimates. The S&P 500 ended the session 0.6% higher, while the Nasdaq 100 added 1.1% and the Dow Jones Industrial Average rose 0.7%. The Russell 2000, tracking small-cap stocks, gained 0.3%.
Meta Platforms reported robust quarterly earnings, with CEO Mark Zuckerberg stating that AI investments are paying off. Dan Ives, partner and senior managing director at Yorkville Ives, noted in a post-earnings comment that the quarter showed AI investment paying off in the core business. Meanwhile, Tesla reported third-quarter results that were marginally below revenue expectations but ahead of forecasts on adjusted earnings. Shares of the electric vehicle maker rose over 3% ahead of its quarterly report, partly due to Elon Musk’s revelation that SpaceX and Tesla have established special committees to evaluate a potential merger.
SpaceX advanced 7% during regular trading, providing a boost to the tech-focused Nasdaq following a 161% revenue increase in the third quarter. Joe Zidle, Cresset’s chief market strategist, commented that while SpaceX suggests a longer runway, the fundamental tension of getting overly enthusiastic and capitalizing things has not changed.
International Business Machines Corp. shares added 3% after-hours on Wednesday after the company reported third-quarter revenue and earnings that beat expectations. The company attributed the results to steady software expansion and a resurgence in big-ticket mainframe sales.
Other market movers included Mattel (MAT), which closed roughly flat after reports that a major shareholder is preparing a proxy contest to push for a sale of the toymaker. Media mogul John Malone stated on Wednesday that he sees a possible transaction between Skydance (SKYD) and SpaceX (SPCX). Morgan Stanley identified Western Digital (WDC), TeraWulf (WULF), and Williams Companies (WMB) as its top bullish conviction AI selections.
In semiconductor stocks, the VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF gained about 0.8% amid strength in Micron Tech (MU), Nvidia (NVDA), and Broadcom (AVGO). The broader Vanguard Information Technology ETF (VGT) jumped 1.2%. ETFs tracked the broader market moves, with SPDR S&P 500 ETF (SPY) rising 0.5%, SPDR Dow Jones Industrial Average ETF (DIA) adding 0.6%, and Invesco QQQ Trust (QQQ) rising 1.1%.
Stocktwits retail sentiment for SPY and DIA was bearish with high message volumes, while sentiment for QQQ improved to neutral from bearish. After the market close, stock futures initially ticked higher before reversing; Dow Jones Industrial Average futures fell 0.1%, S&P 500 futures dropped 0.2%, and Nasdaq-100 futures declined 0.3% at the time of writing.