U.S. stocks just higher; quarterly earnings season in full flow

Investing.com -- U.S. stocks slipped slightly higher Thursday as investors digested a string of significant corporate results, including from electric vehicle manufacturer Tesla, amid signs of rising U.S.-China trade tensions.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average traded 35 points, or 0.1%, higher, the S&P 500 index gained 7 points, or 0.1%, and the NASDAQ Composite traded largely unchanged.

Tesla slides after mixed earnings

The quarterly earnings season is in full flow, and has helped sentiment remain mainly strong with roughly 86% of firms who have reported so far topping analysts’ estimates. S&P 500 earnings growth for the period is seen rising 9.3% versus a year ago, on aggregate, according to LSEG data cited by Reuters.

That said, Tesla (NASDAQ:TSLA) disappointed investors Thursday, with its shares dropping, after the electric vehicle giant posted earnings that fell short of Wall Street estimates, as rising sales were offset by higher costs just as the EV maker braces for slowing demand in the U.S. following the expiration of an EV tax credit.

The company reported record quarterly revenue of $28.1 billion, narrowly topping estimates, but net income dropped 37% as higher research and development spending and tariff-related costs weighed on margins.

IBM’s (NYSE:IBM) shares also retreated sharply after the tech company’s software revenue growth disappointed even as it delivered third-quarter financial results that surpassed expectations and raised its guidance, citing tailwinds in artificial intelligence.

Highlighting the earnings calendar on Thursday will be Intel (NASDAQ:INTC), which is scheduled to report after the closing bell.

The embattled chipmaker is tipped to post roughly break-even income in the third quarter, with weakness at its data center and AI division seen contributing to a 1.2% decline in sales to $13.12 billion.

Intel has benefited in recent weeks from a slate of capital injections, including from artificial intelligence-darling Nvidia (NASDAQ:NVDA) and Japanese investment titan SoftBank. Trump announced in August that the U.S. would take a 10% stake in the business as well, even after the president said Intel CEO Lip-Bu Tan should step down because of conflicts of interest.

Elsewhere, Moderna (NASDAQ:MRNA) stock fell after the drugmaker announced topline results from a Phase 3 study of its cytomegalovirus, or CMV, vaccine that did not meet its primary efficacy endpoint of preventing CMV infection in select female participants.

Hasbro (NASDAQ:HAS) stock fell after the toy manufacturer detailed macroeconomic uncertainties hitting spending among American shoppers, even as it raised its annual revenue and core profit forecasts.

American Airlines (NASDAQ:AAL) stock rose after the carrier reported better-than-expected third-quarter results, with losses narrower than anticipated.

Honeywell (NASDAQ:HON) stock gained after the manufacturing conglomerate raised its 2025 profit forecast despite the impact of a planned separation of its advanced materials unit, signaling robust growth prospects fueled by strong aerospace demand.

Beyond Meat (NASDAQ:BYND) slumped sharply, reversing course following a more than 450% climb in the heavily-shorted stock so far this week.

Rivian Automotive (NASDAQ:RIVN) stock fell after the Wall Street Journal reported the electric-vehicle maker is set to lay off more than 600 people.

U.S.-China trade tensions heat up again

Away from the corporate sector, sentiment has been hit by a Reuters report stating that the Trump administration is considering sweeping restrictions on exports to China of goods made with or containing U.S. software, in retaliation for Beijing’s latest curbs on rare earth exports.

The proposed measures could affect a wide range of industries, from semiconductors and aerospace to consumer electronics, marking a potential escalation in the trade war between the world’s two largest economies.

The report comes ahead of President Donald Trump’s expected meeting with Chinese President Xi Jinping, stoking investor concerns that tensions could flare again after months of relative calm.

While no final decision has been made, the report stated that the proposal is under serious discussion as Washington seeks leverage over Beijing’s growing dominance in critical minerals.

Trump sanctions Russian oil giants

Trump has also announced sanctions on Russia’s largest oil companies, Lukoil and Rosneft, with his administration citing Moscow’s “lack of serious commitment to a peace process to end the war in Ukraine.”

This marks a pivot in Trump’s stance on Russia, having chosen so far not to impose any direct sanctions on the country in his second term.

The sanctions now stand to block a chunk of global oil supplies, and have helped ease concerns over a looming supply glut. This resulted in sharp gains in the benchmark oil contracts, with Brent futures up 5.4% to $65.95 a barrel and U.S. West Texas Intermediate crude futures 5.7% higher to $61.83 a barrel.

Ayushman Ojha contributed to this article