Wall Street has spent the morning handing out lessons in how to beat forecasts and still lose money. Intuitive Surgical, Danaher and AT&T all came in ahead of what analysts expected, and all three are lower before the open. The companies being rewarded are the ones promising something much bigger, and that is the mood heading into a night when Tesla and Meta both report.
Where things stand
US futures are modestly higher. S&P 500 futures are up about 0.2% near 7,769, Nasdaq 100 futures are up about 0.5% near 29,820, and Dow futures are flat. That follows a lopsided Tuesday in which the Dow rose about 1% and the Russell 2000 small-cap index jumped 1.65%, while the Nasdaq Composite finished flat.
Europe is calm and slightly positive. The DAX is up about 0.7%, the CAC 40 about 0.6% and the Stoxx 600 about 0.5%, while the FTSE 100 is barely changed near 10,743. The VIX, Wall Street’s fear gauge, sits around 17.4, which is relaxed for a week this heavy with earnings.
What has changed since the morning
Three things. UK inflation came in hot at 3.5%, yet the pound barely moved, which suggests traders think the bigger question for Britain is now the Budget on 28 October rather than the Bank of England. Oil has kept climbing, with US crude briefly touching $100 a barrel and Brent near $111. And the early US earnings have landed, mostly to a cold reception.
The futures gain from overnight, driven by SpaceX’s results and talk of a possible tie-up with Tesla, has held. But underneath that headline the earnings reaction has turned harsher.
The bar has gone up
Intuitive Surgical is the clearest example. The maker of the da Vinci surgical robot beat on profit and sales after Tuesday’s close, but it also booked a $450 million charge to settle an antitrust class action over its robots and narrowed its outlook for procedure growth to 14% to 15% this year. The settlement still needs court approval. The shares are down about 7% in pre-market trade, near $406.
Danaher, the lab equipment and diagnostics group, beat on earnings and revenue and raised its full-year profit guidance to $8.57 to $8.62 a share. Even so, the stock is down around 4.5%. Investors seem to be focusing on a fourth-quarter outlook of roughly 3% core revenue growth, held back by weaker respiratory testing.
AT&T grew revenue by 5.3%, raised its adjusted earnings outlook for the year and said it will spend less on its network over the long term. The weak spot was 379,000 new phone contract customers, just short of expectations, and the shares are down about 4%. Netflix, which reported on Tuesday night, is down about 6% after its fourth-quarter guidance came in below forecasts.
Now look at the winners. Super Micro Computer, the AI server maker, is up about 12% after lifting its sales forecast well above what analysts expected. SpaceX is up about 8% after its results. In other words, the market is paying for a bigger future, not for a tidy beat. That is a demanding mood, and it raises the stakes for tonight.
Stocks on the move before the open
On the downside, Intuitive Surgical is off about 7%, Netflix about 6%, Danaher about 4.5% and AT&T about 4%. Moody’s, Philip Morris and Abbott, which all report this morning, are lower by between 1.5% and 3%.
On the upside, Super Micro Computer is up about 12% and SpaceX about 8%. Capital One is up about 3.5% after its results on Tuesday night, Lam Research is up nearly 3% and Nvidia about 2%, as the AI server news lifts the chip names. Tesla is up close to 2% ahead of its results after the close, while Meta is little changed ahead of its own numbers.
The dollar and the pound
The dollar index is flat near 101.7. Sterling is up about 0.1% at $1.339, a fairly calm reaction to a hot UK inflation reading. The euro is little changed at $1.123, and the yen is steady around 158 per dollar. For UK readers, euro-sterling is a touch lower near 0.8385, so the pound is slightly firmer against the euro too.
Bonds
US Treasury yields are steady at high levels. The 10-year yield is about 5.125%, the two-year about 4.80% and the 30-year about 5.43%. In the UK, the 10-year gilt yield is about 5.42% and the 30-year gilt about 5.83%. These are expensive borrowing costs for governments and companies alike, which is one reason investors are so unforgiving of any wobble in guidance.
Oil, gold and the rest
Oil is the standout. Brent crude is up about 1.9% near $110.8 a barrel, and US crude is up about 2.2% just under $100 after touching that round number this morning. Higher fuel costs flow straight into airline, transport and consumer company outlooks, so this matters well beyond the energy sector.
Gold is flat near $4,144 an ounce, silver is down about 0.6% and copper is down about 0.8%. Natural gas is down about 3.6%. Bitcoin is up about 1% near $83,300.
What is still to come
Bank of England Governor Andrew Bailey speaks at 14:00 UK time, the US cash market opens at 14:30, and the weekly US crude stocks report from the Energy Information Administration lands at 15:30. There are no Federal Reserve speakers because the Fed is in its quiet period before the 27 to 28 October meeting.
The main event comes after the close, when Tesla, Meta, IBM, Lam Research and Texas Instruments report. For Meta, the key number is how much it plans to spend on AI. For Tesla, investors will want to hear more about the possible SpaceX tie-up as well as car margins. Flash purchasing manager surveys follow on Friday.
Levels worth knowing
For the S&P 500, Tuesday’s close of 7,712.57 is the first reference, with futures trading around 7,769. For the Nasdaq 100, futures near 29,800 are the gauge for tonight’s tech results. For the Dow, Tuesday’s close of 52,495.88 marks the level after its 1% jump. In bonds, the US 10-year yield around 5.1% remains the line that matters for valuations. In commodities, $100 for US crude and $110 for Brent are the obvious round numbers, while the VIX near 17 shows little fear. These are reference points, not targets.
How we see it
The tone into the open is cautiously positive, but the earnings reaction is sending a clear message: beating forecasts is no longer enough. Investors are rewarding companies that promise a much bigger future and punishing any hint of slower growth, legal costs or patchy guidance, even when the headline numbers are good. With Treasury yields above 5% and oil near $100, there is little room for disappointment.
The evidence for a firm open is the hold in futures, the lift in chip and AI server names and a calm VIX. The risk is that this mood turns on the giants tonight. If Meta’s spending plans or Tesla’s margins disappoint, the same harsh treatment handed to Intuitive and Danaher could hit stocks that carry far more weight in the index. A clear break of US crude above $100, or a jump in the 10-year yield, would also weaken the case for a steady session.
The markets to watch are Nasdaq 100 futures into Meta and Tesla, the US 10-year yield, oil around $100, and the pound after Bailey speaks. For newer traders, the lesson of the morning is simple: a share price reacts to what the market expected, not just to whether a company did well. Good news that was already priced in can still send a stock lower.
If you want to see how your own approach to moves like these stacks up, the Samuel & Co Trading Assessment is a useful next step.
