Pre-market stock futures declined on Thursday morning, with the Dow Jones Industrial Average leading the drop by 377 points. The Nasdaq Composite, which had fallen nearly 700 points or 2.6% in the previous session, was down 34 points in early trading. The S&P 500 index was down 22 points, and the Russell 2000 index was down 15 points. The market reaction follows Meta Platforms' report earlier this week, which raised questions about the viability of AI infrastructure buildout, creating uncertainty that has spread to traditional industrial companies.
Caterpillar, a heavy equipment manufacturer listed on the Dow 30, was down 4.9% in pre-market trading. The company is scheduled to report its third-quarter earnings next Thursday. This shift in investor sentiment has also impacted bond markets, with yields easing from multi-decade highs recorded a couple of weeks ago. The 10-year Treasury yield has fallen below 5% for the first time in a month.
Oil prices remain elevated due to geopolitical tensions between the United States and Israel, which are reportedly drawing up plans to attack facilities in Iran aimed at developing nuclear weaponry. Over the past eight months, Iranian retaliation has routinely involved disrupting global oil supply. Anticipation of new strikes, along with ongoing bombings at a Saudi airport by Iran-backed Houthi rebels, has pushed the WTI spot oil price back above $100 per barrel. Brent crude has returned to its early May high of $115 per barrel.
In corporate earnings, American Express reported third-quarter earnings of $4.68 per share, beating the Zacks consensus of $4.47 by 4.7%. The result also surpassed the year-ago figure of $4.14 per share. However, revenues of $20.06 billion missed expectations by 0.74%. American Express shares are down 12% year to date and fell another 1.9% in pre-market trading.
SLB Corp., formerly Schlumberger, reported earnings of $0.64 per share, exceeding estimates by 2 cents. Revenues of $9.45 billion beat the Zacks consensus by 1.72%. The company's shares rose 2% ahead of the opening bell, adding to a year-to-date gain of 29%.
Following the market open, investors will examine flash U.S. Purchasing Managers' Index data for manufacturing and services for October. Estimates suggest both metrics will decline month over month to 55.3 and 58, respectively, remaining above the 50-level that separates growth from contraction. The final University of Michigan Consumer Survey for October is expected to drop to 46.3 from the previous print of 48.1, indicating continued negative sentiment regarding the American consumer's outlook.