Dow market futures hover near the neutral point, as investors brace for an impending surge of corporate earnings and assess the prospects for the artificial intelligence sector. Netflix and United Airlines stand out on the quarterly earnings calendar, while OpenAI is said to be swiftly pursuing $30 billion in funding in anticipation of Anthropic’s highly awaited initial public offering.
Dow futures exhibited a mixed performance on Tuesday. By 03:17, the Dow futures contract had increased by 163 points, representing a 0.3% rise, while S&P 500 futures experienced a modest uptick of 7 points, or 0.1%. In contrast, Nasdaq 100 futures saw a decline of 62 points, equating to a 0.2% drop. The primary indices on Wall Street concluded the previous session with performances that straddled the flatline. The benchmark S&P 500 experienced an increase of 0.41%, while the tech-heavy Nasdaq Composite saw an advancement of 1.11%. In contrast, the blue-chip Dow Jones Industrial Average recorded a slight decline of 0.07%. Tech stocks emerged as notable performers, as the Nasdaq recorded its most significant day in a fortnight, while a gauge of the semiconductor sector ended an eight-session streak of losses. According to analysts, the concentration of technology within the broader index contributed to the uplift of the S&P, even as nearly two-thirds of the components experienced a pullback. AI names, in particular, stabilised following a selloff prompted by apprehensions regarding debt-driven expenditures and heightened borrowing costs. However, the AI trade reversed course once again this morning, dragging down the KOSPI in South Korea and the Nikkei in Japan.
Elsewhere, oil prices surged, with benchmark Brent crude futures recently trading above $110 a barrel. U.S. West Texas Intermediate crude futures have risen by more than 1% to $105.02 per barrel. Brent closed near a five-month high on Monday, despite an earlier decline during the session following reports suggesting a potential breakthrough in mediated negotiations between the U.S. and Iran. However, that decline proved to be ephemeral. Oil prices surged once again following statements from Iran’s First Vise President, who indicated that the country had “no choice but to exercise sovereignty” over the Strait of Hormuz. This development has heightened concerns regarding potential disruptions to crude supply in this vital chokepoint. Recent strikes on vessels near Hormuz have impeded the flow of oil through the waterway. Hormuz has been largely closed since the commencement of a joint U.S.-Israeli offensive against Iran in late February. However, reported shipping figures suggest that supplies exhibited signs of recovery last month.
Meanwhile, Netflix is scheduled to report following the market close on Tuesday. Last week, the streaming titan reportedly announced its intention to reduce its workforce by approximately 6%, equating to around 1,000 positions. The jobs affected would primarily be within the firm’s product, legal, technology, and human resources divisions, according to the source. It marked the most significant wave of job cuts at the company since 2022. At the conclusion of the previous year, Netflix had a workforce of approximately 16,000 employees. The move comes as Netflix grapples with declining customer engagement following years of robust growth that exerted significant pressure on traditional cable television businesses. A failed bid to acquire Warner Bros. Discovery’s streaming and studio assets earlier this year has further intensified apprehensions regarding the group’s overarching strategy.
United Airlines is set to announce its results following the conclusion of U.S. market trading. Investors are expected to monitor United’s fare pricing strategy closely, particularly as the broader airline sector contends with rising fuel costs. In August, CEO Scott Kirby indicated that he anticipates a gradual increase in airfares during the first half of the upcoming year, attributing this expectation to robust travel demand. However, Kirby anticipated that the increase would not be “as big a jump as happened this year.” And “There really hasn’t even been a blip in demand,” Kirby told reporters at the time. He also observed that United has not experienced a decline in customer demand for travel, suggesting that this robustness could mitigate the impact of high fuel costs. Tuesday’s earnings agenda will include reports from aerospace and defence sector companies GE Aerospace and RTX Corporation, along with car manufacturer General Motors. Elon Musk’s SpaceX is set to release its report following the conclusion of the trading day.
OpenAI is intensifying its fundraising efforts to secure investor commitments ahead of rival Anthropic’s anticipated stock market debut in mid-November, a move that could potentially value the ChatGPT creator at over $1.4 trillion, according to sources. Citing sources with knowledge of the situation, source reported that OpenAI is pursuing approximately $30 billion from investors, including current supporters SoftBank Group and Abu Dhabi-based MGX. Both OpenAI and Anthropic, the firms behind the popular chatbots ChatGPT and Claude, respectively, are vying for capital from sovereign wealth funds and major institutional investors in anticipation of significant potential public offerings. OpenAI is presenting to investors an annualised revenue projection of $50 billion, according to source. The company anticipates that this figure will rise to $70 billion by year-end, following the introduction of its GPT-6 Astra model. Anthropic’s quarterly revenue reportedly increased to $16.8 billion in the third quarter, rising from $11.6 billion in the previous three-month period. However, the deceleration in sequential revenue growth has prompted enquiries regarding its valuation.
