By Peter Nurse
Investing.com -- U.S. stocks are seen opening largely higher Thursday, but the tech sector is likely to underperform on the back of rising Treasury yields and disappointing results from Tesla (NASDAQ:TSLA).
At 07:00 ET (11:00 GMT), the Dow Futures contract was up 110 points, or 0.4%, S&P 500 Futures traded 7 points, or 0.2%, higher, while Nasdaq 100 Futures traded essentially flat.
The main U.S. equity indices closed lower Wednesday, snapping an impressive two-day rally, with the blue-chip Dow Jones Industrial Average dropping 100 points, or 0.3%. The broad-based S&P 500 dropped 0.7%, and the tech-heavy Nasdaq Composite fell 0.9%.
Generally positive corporate earnings had helped the main averages to a solid start to the week, but concerns remain that the Federal Reserve’s aggressive rate-hiking campaign to calm inflation will push the largest economy in the world into recession.
The Fed’s survey of its 12 member banks, known as the Beige Book, showed the outlook on economic growth getting gloomier, resulting in the benchmark U.S. 10-year Treasury yield rising to 4.154% early Thursday, its highest level since mid-2008.
Tesla stock fell over 5% premarket after the electric car manufacturer flagged persistent logistics challenges, adding its fourth-quarter deliveries will grow by less than the aimed 50%.
There was some good news from IBM (NYSE:IBM), as “Big Blue” said it was expecting to exceed its full-year revenue growth target on strong demand for its digital services. Its stock rose over 3% premarket.
Earnings continue to flow, with AT&T (NYSE:T) stock up 2.8% premarket after the wireless carrier reported earlier Thursday a 26% jump in third-quarter profit, as more customers opted for its wireless services and upgraded to 5G plans amid summer travel.
Results from the likes of American Airlines (NASDAQ:AAL), railroad giant CSX (NASDAQ:CSX), and social media platform Snap (NYSE:SNAP) are also scheduled for this session.
Investors will also look at the Philadelphia Fed manufacturing survey, existing home sales, and the weekly jobless claims data for more clues of the overall health of the U.S. economy.
Oil prices rose Thursday, boosted by an unexpected drop in U.S. crude stocks, suggesting consumption in the world’s largest economy remained steady despite pressure from rising inflation and interest rates.
U.S. crude oil inventories fell by 1.7 million barrels last week, according to data from the Energy Information Administration released Wednesday.
This news overshadowed plans by the Biden administration to release another 15 million barrels of oil from the country’s strategic reserves in an attempt to dampen high prices.
By 07:00 ET, U.S. crude futures traded 1.9% higher at $86.09 a barrel, while the Brent contract rose 1.5% to $93.76.
Additionally, gold futures rose 0.5% to $1,642.40/oz, while EUR/USD traded 0.3% higher at 0.9799.