U.S. Stocks Edge Higher as Earnings Season Peaks and Trade Tensions Rise
U.S. stocks traded slightly higher on Thursday as investors weighed a wave of corporate earnings reports from major companies including Tesla, while renewed signs of U.S.–China trade tensions added caution to markets.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average was up 35 points (0.1%), the S&P 500 gained 7 points (0.1%), and the NASDAQ Composite traded mostly flat.
Tesla Slides After Mixed Earnings
The third-quarter earnings season is in full swing, with sentiment staying broadly positive — about 86% of companies that have reported so far have beaten Wall Street estimates, according to LSEG data cited by Reuters. Overall S&P 500 earnings are expected to grow 9.3% year-over-year this quarter.
However, Tesla (NASDAQ: TSLA) shares dropped after the EV maker’s results came in below expectations. The company posted record quarterly revenue of $28.1 billion, narrowly topping forecasts, but net income fell 37% due to higher R&D spending and tariff-related costs. Investors are also bracing for a potential slowdown in U.S. EV demand after the expiration of a federal $7,500 tax credit.
Tech and Manufacturing Stocks Mixed
IBM (NYSE: IBM) also declined despite beating third-quarter earnings expectations and raising its full-year guidance. The drop came after the company reported weaker software revenue growth, partially offset by optimism around its artificial intelligence (AI) division.
Investors are now awaiting Intel’s (NASDAQ: INTC) results after the closing bell. The chipmaker is expected to post break-even results for the quarter, with revenue projected to fall 1.2% to $13.12 billion, pressured by its data center and AI divisions.
Despite these challenges, Intel has secured several strategic investments in recent weeks, including backing from Nvidia (NASDAQ: NVDA) and SoftBank, as well as a 10% U.S. government stake, announced by President Donald Trump in August.
Elsewhere, Moderna (NASDAQ: MRNA) stock declined after its Phase 3 CMV vaccine trial failed to meet its primary goal, while Hasbro (NASDAQ: HAS) also dipped as the toy company cited macroeconomic headwinds despite lifting its annual revenue and profit forecasts.
In contrast, American Airlines (NASDAQ: AAL) gained after reporting better-than-expected results and narrower losses, while Honeywell (NASDAQ: HON) advanced after raising its 2025 profit outlook, driven by strong aerospace demand.
Beyond Meat (NASDAQ: BYND) fell sharply after surging earlier in the week, while Rivian Automotive (NASDAQ: RIVN) dropped following reports it plans to lay off over 600 employees.
U.S.–China Trade Tensions Reignite
Geopolitical uncertainty resurfaced after Reuters reported that the Trump administration is considering sweeping export restrictions on U.S.-made software and technology bound for China. The move would be in retaliation for Beijing’s recent rare earth export curbs, potentially escalating trade frictions between the world’s two largest economies.
The proposal could affect key industries including semiconductors, aerospace, and consumer electronics, and comes just days before a planned meeting between President Trump and Chinese President Xi Jinping. While no final decision has been made, officials say the plan is under serious consideration as Washington seeks to counter China’s dominance in critical mineral supply chains.
Trump Sanctions Russian Oil Giants
Separately, President Donald Trump announced new sanctions on Russia’s top oil companies — Lukoil and Rosneft — citing Moscow’s lack of commitment to peace efforts in Ukraine.
The move marks a major policy shift for Trump’s administration, which had previously avoided imposing direct sanctions on Russia in his second term. The decision tightened global oil supply, sending prices sharply higher.
Brent crude rose 5.4% to $65.95 per barrel, while U.S. West Texas Intermediate (WTI) climbed 5.7% to $61.83 per barrel, reaching their highest levels in weeks. Analysts said the sanctions could alleviate oversupply concerns, supporting oil markets through the remainder of 2025.
