Consumer giant Procter & Gamble gained 1% in premarket trading after raising its annual sales forecast and IT giant IBM Corp rose 2.3% following its prediction to hit the top end of its 2022 revenue growth forecast.
Netflix Inc slumped 27.5% and dragged down Disney, Roku and Warner Bros Discovery as it blamed inflation, the Ukraine war and fierce competition for subscriber loss for the first time in over a decade.
Overall, the earnings season has started on a strong note. Of the 49 companies in the S&P 500 index that reported results through Tuesday, nearly 80% exceeded profit expectations, as per Refinitiv data. Typically, 66% beat estimates.
“Earnings so far have been quite solid. There have been some disappointing misses but we will classify those as more company specific with the overall backdrop still quite positive,” said Ryan Detrick, chief market strategist at LPL Financial.
Meanwhile, the yield on 10-year Treasury note receded to 2.87%, after a blistering rally that pushed it close to the key 3% level earlier in the session.
The pullback lifted rate-sensitive growth stocks that have been under pressure for the past few weeks. Megacaps such as Apple Inc and Microsoft Corp climbed more than 0.8% each.
In the previous session, Wall Street’s main indexes ended up more than 1% higher on positive earnings from companies like Johnson & Johnson and dovish comments on interest rate hikes from two Federal Reserve officials.
Investors will be focus on the Fed’s “Beige Book” on economic conditions from late February to early April for further details on the monetary policy tightening plans.
At 08:38 a.m. ET, Dow e-minis were up 138 points, or 0.4%, S&P 500 e-minis were up 18.25 points, or 0.41%, and Nasdaq 100 e-minis were up 65.5 points, or 0.46%.
Tesla Inc rose 0.7% ahead of its first-quarter results after the closing bell. Investors will keep an eye on whether the electric automaker maintains its ambitious 2022 delivery target as its biggest factory in Shanghai grapples with a COVID-19 shutdown and new plants slowly ramp up output.
Shares in chip equipment makers Applied Materials and Lam Research rose nearly 2.5% each after Dutch company ASML beat expectations for first-quarter results. ASML’s U.S.-listed shares jumped 5.8%.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)