Stocks Fall Pre-Bell as Traders Digest Meta, Tesla Earnings

US equity markets traded lower before the opening bell on Thursday as investors processed the latest financial reports from Meta Platforms and Tesla. The S&P 500 fell 1.1%, the Dow Jones Industrial Average decreased 0.7%, and the Nasdaq 100 slipped 1.9% in premarket trading. This pullback follows Wednesday's session, during which the S&P 500 extended its winning streak to a third straight day.

Meta Platforms shares dropped 1.2% in early trading after the company released its third-quarter results. The report included a $9.89 billion charge associated with a settlement of litigation concerning teen mental health and social media. RBC Capital Markets characterized the underlying performance as fundamentally strong in a client note, excluding the nearly $10 billion legal expense. The brokerage stated that earnings before interest and taxes would have exceeded Wall Street estimates by 13% without that charge, while revenue topped expectations by 2%.

Tesla stock fell 4.3% as the electric vehicle manufacturer's third-quarter revenue declined year over year. The company attributed the drop to weakness in its automotive and energy generation divisions. IBM shares also slipped 4.6% following the release of its latest financial results.

A broad slate of corporate earnings is scheduled for release on Thursday. Procter & Gamble, Union Pacific, Lockheed Martin, Spotify Technology, Comcast, Honeywell International, Dover, Dow, Tractor Supply, and American Airlines are set to report before the market opens. Newmont, Bloom Energy, Omnicom, and Deckers Outdoor are scheduled to post their results after the close.

In the rates market, Treasury yields trended downward early Thursday. The two-year rate retreated 5.8 basis points to 4.77%, while the 10-year rate fell 7.3 basis points to 5.07%. Commodity prices moved in opposite directions to equities. West Texas Intermediate crude oil gained 2.5% to $99.60 a barrel, and Brent crude rose 2.9% to $111.97 a barrel.

Geopolitical developments contributed to the risk-off sentiment. The New York Times reported Wednesday that Washington and Tel Aviv have outlined concrete strategies to restart hostilities against Iran following the November midterm elections. Sources cited by the newspaper indicated that probable objectives include Iranian energy infrastructure, nuclear sites, and missile and drone capabilities. Separately, CNBC reported that the US has ordered non-emergency government employees and their families to leave Saudi Arabia amid ongoing conflict with Yemen's Iran-aligned Houthi rebels.

On Thursday's economic calendar, investors await the weekly jobless claims bulletin and the Federal Reserve Bank of Kansas City's manufacturing index for October. Safe-haven assets showed mixed results: spot gold slid 1% to $4,107 per troy ounce, while bitcoin fell 2.8% to $82,057.