The financial markets faced a mixed day as major indices responded to unexpected inflation figures and corporate earnings reports. On Wednesday, the Dow Jones Industrial Average dropped over 200 points, while the S&P 500 declined by 0.3% after the latest consumer price index reading indicated inflation was higher than economists had predicted for January. In contrast, Nasdaq 100 futures climbed 0.3%, signaling investor optimism in the tech sector.
Despite the inflation concerns, the earnings season continues with companies like Airbnb, Coinbase, and Palo Alto Networks poised to report results after Thursday's closing bell. Dutch Bros made headlines by issuing an optimistic revenue outlook for the full year, causing its shares to surge over 23%. The coffee shop chain exceeded expectations with strong earnings and impressive same-store sales figures.
Not all companies experienced such positivity. The Trade Desk saw its shares plunge 25% after reporting weaker-than-expected fourth-quarter revenue and guidance. Similarly, Reddit experienced a 17% drop due to user numbers not meeting Wall Street's projections, although it did surpass analysts' expectations on both revenue and earnings for the quarter.
In futures trading, contracts tied to the Dow and S&P 500 traded up around 0.1% shortly after 6 p.m. ET Wednesday night. Investors kept a close watch on Thursday's anticipated producer price index data, which measures wholesale inflation. Nasdaq 100 futures added another 0.3%, while Dow Jones Industrial Average futures rose by 47 points, or 0.1%. The S&P 500 futures remained nearly unchanged as traders assessed ongoing corporate earnings reports and awaited further inflation statistics.
"This is a tough inflation report to get while the White House is looking at further tariffs with consumer inflation expectations jumping higher," commented Scott Helfstein, head of investment strategy at Global X.
Among individual stocks, Palantir and Tesla saw gains of more than 4% and 2%, respectively, highlighting investor confidence in these technology-driven companies. As of now, more than 69% of S&P 500-listed firms have reported their financial results for the quarter, with approximately 77% surpassing Wall Street's expectations, according to FactSet.