US stocks wiped out opening gains on Thursday as investors braced for Netflix (NFLX) to kick earnings season into high gear.
The S&P 500 (^GSPC) hovered around the flatline, while the Dow Jones Industrial Average (^DJI) rose about 0.3% after closing lower in the previous session. The Nasdaq Composite (^IXIC) fell 0.3%, adding to Wednesday’s losses.
Stocks have struggled on concerns that inflation is no longer cooling and that the Federal Reserve could ease interest rate cuts. That has put corporate earnings in focus as investors keep a close eye on how well the reports match up with high expectations.
TSMC’s (TSM) latest quarterly results point to signs of strong demand for AI, as the Taiwanese chip giant gave a more cautious outlook for the global market beyond memory chips. However, the company signaled an “insatiable” appetite for AI as it posted a quarterly profit.
The focus on earnings is now shifting to Netflix, while the focus is shifting to technology stocks, including the ‘Magnificent’ group of companies. The streaming leader’s financial update later Thursday is seen by some as the first real test for stocks this earnings season, as mega-cap tech continues to play a big role in pushing markets higher.
Meanwhile, the market is still keeping an eye on whether the Federal Reserve could forego a rate cut this year given the chances of a ‘no landing’ for the economy. Appearances by policy makers including John Williams and Raphael Bostic are scheduled for Thursday.
Initial unemployment claims for the week ending April 13 totaled 212,000, according to Labor Department data released Thursday. The result came in below the consensus estimate of 215,000 compiled by Bloomberg.
US bond yields have fallen from recent five-month highs, easing pressure on stocks. Ten-year Treasury yields (^TNX) were trading around 4.56%.
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