By Lisa Pauline Mattackal and Pranav Kashyap
(Reuters) -Wall Street’s main indexes were set to open flat-to-slightly lower on Friday, after a mixed set of producer prices data kept bets on a 25-basis-point Federal Reserve rate cut in November intact, while major banks rose after third-quarter results.
Shares of Tesla (NASDAQ:) dropped 6.5% in premarket trading after the EV maker unveiled its long awaited robotaxi, but did not provide details on how fast it could ramp up production or deal with potential regulatory hurdles.
Major financial companies kicked off the earnings season on the day, with JPMorgan Chase (NYSE:) rising 1.5% after the lender reported higher-than-expected third-quarter profit and raised its annual interest income forecast.
Wells Fargo rose 3.7%, after its profit also beat analysts’ expectations. BlackRock (NYSE:) gained 2% after the asset manager reported its assets under management had hit a record high for the third straight quarter.
Meanwhile, data from the U.S. Department of Labor showed the Producer Price Index for final demand was unchanged on a monthly basis in September, compared to the 0.1% rise expected by economists polled by Reuters.
However, core PPI, which excludes the volatile food and energy components, stood at 2.8% on an annual basis, slightly higher than the estimated 2.7% rise.
Traders added slightly to bets on a 25-basis-point rate cut from the U.S. central bank in November, pricing in a nearly 88% chance of a 25-bps reduction, according to CME’s FedWatch, from about 84% prior to the release of PPI data.
“The annual numbers are a little higher and it’s going to take a little time to go through why that is the case, (but) there’s nothing specifically in this number to make markets… change the narrative,” said Steve Sosnick, chief market strategist at Interactive Brokers (NASDAQ:).
Dow E-minis were up 3 points, or 0.01%, E-minis were down 3.25 points, or 0.06%, and E-minis were down 58.5 points, or 0.29%.
All three major indexes are on track to notch their fifth consecutive week of gains. This will be the best winning streak for the Dow in eight months and the best for the Nasdaq since May.
With major indexes trading around record highs and the benchmark S&P 500 up more than 21% year-to-date, these third-quarter results will test if 2024’s rally can be sustained amid uncertainty over monetary policy, geopolitical risks and the upcoming U.S. presidential elections.
Wall Street closed slightly lower on Thursday after a keenly watched Consumer Price Index report showed inflation rose higher than expected in September, but an uptick in jobless claims pointed to potential weakness in the labor market.
On the other hand, Atlanta Federal Reserve President Raphael Bostic said he was open to keeping rates unchanged in November.
Also on deck is the University of Michigan’s Consumer Sentiment Survey, as well as speeches from Fed officials Michelle Bowman, Lorie Logan and Austan Goolsbee through the day.
U.S.-listed shares of Chinese companies lost ground ahead of a closely watched fiscal stimulus update from Beijing on Saturday. Among them, JD (NASDAQ:).com lost 2.2%, Alibaba (NYSE:) Group dipped 1.4% and PDD Holdings fell 2.6%.
