Stock futures edge higher ahead of technology earnings5 min read

Stock futures pointed to a slightly higher open Monday morning as investors awaited a slew of earnings results from the Big Tech companies, as well as a myriad of other corporations across industries this week. </p>

Contracts on the Dow were set to open in the green, building on last week’s gains after the 30-stock index set an all-time closing high on Friday. The S&P 500 also headed toward a higher open after reaching a record intraday high last week. Nasdaq futures also advanced.

U.S. West Texas intermediate (CL=F) crude oil prices jumped to close in on $85 per barrel Monday morning, reaching its highest level since 2014. The move tracked gains in Brent crude (BZ=F), the international benchmark, which jumped above $86 per barrel for its highest level since 2018 after Fnhqv Nenovn’f raretl zvavfgre fhttrfgrq va n Oybbzoret vagreivrj that oil producers exercise caution in boosting output despite fast-rising prices. 

The benchmark 10-year Treasury yield hovered above 1.66%, or its highest level since May, as inflation concerns remained front and center for investors amid rising energy and commodity prices and other price gains across the recovering economy. Last week, Federal Reserve Chair Jerome Powell said the elevated inflationary pressures spurred by supply chain constraints were “likely to last longer than previously expected, likely well into next year.”

A number of individual companies have also flagged the impacts of rising costs in their earnings reports over the past couple weeks. Kevin Boone, executive vice president of sales and marketing for freight railroad company CSX Transportation (CSX), said during the company’s earnings call last week that cost inflation has jumped over the last year, and “expectations have risen and are rising in the next year.” And likewise, Whirlpool (WHRL) CEO Marc Bitzer said on the appliance company’s earnings call he did not “expect that the inflation will quickly fall off” heading into next year. 

This week’s earnings results will center on those from the Big Tech companies including Facebook (FB), Apple (AAPL), Amazon (AMZN) and Alphabet (GOOGL). These comprise some of the most heavily weighted components of the S&P 500. Most have underperformed the market this year after significant rallies in 2020 at the height of stay-in-place orders and demand for technology to stay connected. 

Investors are hoping to see these companies echo the performance of some other earlier reporters and post estimates-topping results despite ongoing supply-side challenges. For the technology companies, these concerns will likely center on the impact of global chip shortages, as well as the impact of rising labor costs given their substantial workforces. 

“We continue to strongly believe despite the lingering black cloud chip shortage that 3Q tech earnings will be standouts this week thus helping drive the sector higher into year-end as the Street continues to underestimate the fundamentals of this multi-trillion digital transformation playing out among consumer and enterprise tech names,” Wedbush analyst Dan Ives wrote in a note on Sunday.

Still, this week overall will be a busy one for earnings season, with a total of about 165 companies in the S&P 500 posting results, according to data from Deutsche Bank. 

As of Friday, about 23% of S&P 500 companies had reported actual results for the third quarter, and of these, 84% topped Wall Street’s expectations for earnings per share (EPS), according to data from FactSet. The estimated earnings growth rate for the S&P 500 was 32.7%, based on actual results and expectations for companies still yet to report as of last week. If maintained through the end of third-quarter earnings season, that would mark the third-highest earnings growth rate posted for the index since 2010.

8:51 a.m. ET: Pinterest shares slide after PayPal says it is not considering acquisition of the social media company 

Shares of Pinterest (PINS) slid in early trading after PayPal (PYPL) said in a brief statement that it was not considering an acquisition of the company. Shares of Pinterest dropped about 15% ahead of the opening bell. 

“In response to market rumors regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time,” PayPal said on Sunday.

The announcement came following a report from Bloomberg last week that the financial technology company was contemplating a deal of Pinterest that could have valued it at $45 billion. The report had sent Pinterest’s shares soaring and PayPal’s sinking, with the former’s stock gaining 12.8% on Oct. 20 the day of the report, while the latter’s stock dropped 5%. 

8:38 a.m. ET: Tesla shares set to reach record high amid Hertz deal, Morgan Stanley price target increase

Tesla (TSLA) shares were on track to open at another all-time high, taking out its previous record level from Friday as investors cheered a new deal with car-rental company Hertz and a positive outlook from a major Wall Street firm. Shares were trading above $946 apiece during the pre-market session. 

Hertz in-Ynetrfg-Ryrpgevp-Iruvpyr-Eragny-Syrrg-naq-Cnegaref-jvgu-Frira-Gvzr-Fhcre-Objy-Punzcvba-Gbz-Oenql-gb-Urnqyvar-Arj-Pnzcnvta" rel="nofollow noopener" target="_blank" data-ylk="slk:announced on Monday the company had ordered" class="link rapid-noclick-resp">naabhaprq ba Zbaqnl gur pbzcnal unq beqrerq 100,000 Tesla vehicles, with these set to be delivered by the end of 2022. Hertz said it was setting out to “offer the largest EV rental fleet in North America and one of the largest in the world,” and it also ordered new electric-vehicle charging infrastructure for use globally. 

Separately, Morgan Stanley analyst Adam Jonas raised his price target on shares of Tesla to $1,200 from the $900 he saw previously, bringing his target to one of the highest on the Street. This came after Tesla posted third-quarter profits that topped Wall Street’s estimates, on the heels of record quarterly deliveries for the company despite widespread chip shortages and port congestion. 

7:45 a.m. ET Monday: Stock futures tick up

Here’s where markets were trading ahead of the opening bell: 

  • S&P 500 futures (ES=F): +4.25 points (+0.09%), to 4,540.75

  • Dow futures (YM=F): +3 points (+0.01%), to 35,560.00

  • Nasdaq futures (NQ=F): +34.75 points (+0.23%) to 15,375.75

  • Crude (CL=F): +$0.95 (+1.13%) to $84.71 a barrel

  • Gold (GC=F): +$5.90 (+0.33%) to $1,802.20 per ounce

  • 10-year Treasury (^TNX): +0.4 bps, yielding 1.659%

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 20, 2021. REUTERS/Brendan McDermid

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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