By Bansari Mayur Kamdar and Johann M Cherian
(Reuters) - The S&P 500 and tech-heavy Nasdaq were set for a lower open on Thursday, as Tesla (NASDAQ:TSLA) CEO's hints about more price cuts deepened investor concerns, while Netflix (NASDAQ:NFLX) slid as its quarterly revenue missed analysts' estimates.
Tesla CEO Elon Musk on Wednesday signalled that he would cut prices again on electric vehicles to boost demand in "turbulent times", even as his all-out price war squeezes the company's margins.
Shares of the electric car maker slid 4.1% in premarket trading after Musk's comments, even as Tesla beat quarterly profit estimates.
"Markets were hoping the bulk of markdowns had been made in the first half and that margins would actually start recovering in the second half, but that is now in doubt," said Joshua Warner, market analyst at City index.
The tech-heavy Nasdaq has advanced 37.2% so far this year, supported by a scorching rally in megacap growth and technology stocks on optimism over artificial intelligence, a resilient U.S. economy and hopes that the U.S. Federal Reserve was nearing the end of its aggressive rate-hike cycle.
Netflix fell 5.3% after the streaming video company's quarterly revenue forecast also fell short of estimates, while analysts said its new money-making ventures will take time to bring in returns.
"Netflix's stock has historically been driven by narrative and sentiment rather than fundamentals, but for those who pay attention to fundamentals, one thing is clear: Netflix is highly overvalued and a very risky investment," said David Trainer, CEO of New Constructs.
At 08:20 a.m. ET, Dow e-minis were up 18 points, or 0.05%, S&P 500 e-minis were down 9.5 points, or 0.21%, and Nasdaq 100 e-minis were down 100 points, or 0.63%.
The Dow registered its longest winning streak in almost four years on Wednesday as investors gauged Goldman Sachs (NYSE:GS) earnings, while major U.S regional banks jumped as their deposits mostly stabilized and net interest income rose after a banking crisis earlier this year.
Overall earnings across industries are expected to decline 8.2% for the second quarter, according to Refinitiv data on Wednesday.
Among other earnings-driven moves, Johnson & Johnson (NYSE:JNJ) climbed 1.0% after the healthcare conglomerate raised its annual profit forecast, banking on the strength of its medical devices business and demand for its cancer drugs.
United Airlines advanced 2.6% after the airline lifted its full-year profit outlook and posted the highest ever quarterly earnings on booming demand for international travel.
Blackstone (NYSE:BX) fell 3% after the asset manager said its quarterly distributable profits slumped nearly 40%, owing to a sharp drop in asset sales mostly from its real estate and credit businesses.
U.S.-listed shares of Taiwanese chipmaker TSMC fell 3.4% after warning of a 10% drop in 2023 sales.
Enterprise software provider IBM (NYSE:IBM) slipped 0.8% after its second-quarter revenue missed Wall Street expectations on Wednesday, dragged by a decline in the sales of its mainframe computers as businesses cut tech spending.
Truist Financial and KeyCorp (NYSE:KEY) shed 3.3% and 2.2%, respectively, after the lenders posted downbeat quarterly earnings after setting aside more rainy-day funds.