U.S. stocks slip slightly as Netflix falters and corporate earnings diverge

Son Min

Summary

U.S. stocks edged lower amid Netflix's weak results and mixed corporate earnings reports.
Digital assets such as Bitcoin and Ether continued to decline, down 2.5% and 2.8% respectively.
Continued AI investment and solid earnings have partly offset market uncertainty, and there is expectation of a rate cut.

Amid a stream of mixed corporate results in the U.S., U.S. stocks edged lower on the 22nd (local time).

Around 10:20 a.m. Eastern Standard Time, the S&P500 was trading just below a flat line, the Nasdaq Composite was down 0.3%, and the Dow Jones Industrial Average was down 0.1%.

Gold, which plunged by the largest margin in 12 years the previous day, continued to fall, with spot gold down 1.6% at 4,058.90 dollars per ounce, marking a second consecutive day of declines.

The 10-year Treasury yield was essentially unchanged at 3.96%. The ICE Dollar Index (DXY) was trading around 99.01, similar to the previous day, and the Japanese yen was little changed at 151.95 per dollar.

Digital assets continued to fall. Bitcoin traded down 2.5% at 108,063.33 dollars, and Ether traded down 2.8% at 3,845.33 dollars.

Netflix plunged 7% after reporting quarterly results after the previous day's close that missed profit expectations. Intuitive Surgical jumped 18% after reporting strong revenue and earnings.

Toy maker Mattel plunged 5% after a weak third-quarter report. Texas Instruments, the largest maker of analog chips, issued a bleak outlook for the current quarter and saw its shares fall 6%.

Tesla, which is set to report earnings after the market close, was trading around 438 dollars, down 0.8% on the day.

Beyond Meat (ticker: BYND) and Krispy Kreme (DNUT) surged as individual investors piled into them as new meme stocks. Beyond Meat jumped 140% after announcing an expanded distribution agreement with Walmart the previous day, recording its largest one-day gain on record. Earlier this week, Roundhill Investments added Beyond Meat to its meme stock ETF.

Following strong quarterly results from Coca-Cola and GM the previous day, the Dow Jones Industrial Average briefly topped 47,000 points, setting a record high.

Starting with Tesla's results due after today's close, expected earnings from the tech giants known as the Magnificent 7 are set to be released.

According to FactSet, more than three-quarters of S&P 500 companies that have reported so far have beaten expectations. Solid results and continued investment in artificial intelligence (AI) are offsetting the negative impact of trade tensions with China and a government shutdown on the market. Bloomberg noted that U.S. companies are reporting their best results since 2021 so far.

Alicia Levin, head of investment strategy and equities at BNY Wealth, told CNBC, "If results are better than expected and tech stocks prove that the AI industry is intact, we could move to a higher level."

The September consumer price index (CPI) will be released late this Friday. It is particularly watched as all other economic data releases have been suspended due to a U.S. government shutdown. Markets expect the Fed to cut the policy rate by 0.25% point this month and to make additional cuts in December.

Contributing reporter Jeong-a Kim kja@hankyung.com