Opening Bell: Earnings Boost Futures, Stocks; Tesla Breaks $1Trillion Milestone

 | Oct 26, 2021 07:51AM ET

  • Wall Street earnings beats overshadow inflation worries
  • Dow and S&P hit new highs, aided by Tesla surge
  • Chinese markets pressured by additional property sector defaults
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US futures for the Dow Jones, S&P 500, NASDAQ and Russell 2000 advanced on Tuesday along with European stocks after positive earnings results from Wall Street overshadowed persistent inflation worries.

Oil and gold weakened, but continued trading near recent highs even as the dollar strengthened.

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All four major US contracts moved into positive territory this morning, with NASDAQ futures—the face of growth stocks—outperforming. Contracts on the small cap Russell 2000, representing value stocks, were less robust. On Monday during the New York session, the Russell 2000 index provided the best results, illustrating the investor push and pull between value and growth shares continues.

However, yesterday all eyes were on shares of electric vehicle maker Tesla (NASDAQ:TSLA) during Wall Street trade. The stock vaulted higher, gaining almost 13% on the day after rental car company Hertz (OTC:HTZZ) announced it planned to order 100,000 Tesla vehicles by the end of 2022 for its fleet. The surge pushed the market cap of the Palo Alto-based company founded by Elon Musk past the $1trillion milestone.

Facebook (NASDAQ:FB) shares rebounded late in the session and moved higher in pre-market trade after the company reported solid user growth and a buyback promise of up to $50 billion more in stock.

Yesterday's activity pushed the S&P 500 and Dow to new all-time highs.

On Tuesday, the STOXX Europe 600 Index climbed for a third straight day, the eighth out of 10, with personal drug and grocery shares boosting the index after Reckitt Benckiser Group (LON:RKT), maker of Strepsils and Lysol among other consumer staples, reported higher than expected third-quarter sales and raised its full year forecast. Shares rose over 5%.

Swiss UBS Group (SIX:UBSG) gained after the financial institution posted an upside profit surprise.

Earlier this morning, most regional markets in Asia gained, tracking the record-breaking rally on Wall Street. However, markets with a China focus, including the Shanghai Composite and Hong Kong's Hang Seng slumped, pressured by the bond default of another Chinese property developer, Modern Land China (HK:1107) as investor fears continue to escalate about the much larger Evergrande Group (HK:3333)'s ability to settle its own debts.

Yields, including on the 10-year Treasury note, declined for a third straight day as investors remain confused about the inflation outlook.