Friday Markets: Stock Futures Hold Steady as Tesla and Oil Prices Surge

Stock futures were flat Friday morning as Wall Street digested Tesla’s latest surge and mixed economic signals.

Futures on the Dow Jones and S&P 500 remained largely unchanged, while Nasdaq 100 futures edged up by 0.1%. The previous session saw gains for both the S&P 500 and Nasdaq, largely driven by Tesla’s nearly 22% rally. The electric vehicle giant’s stock spike added over $140 billion to its market cap, as the company delivered earnings and a positive outlook that exceeded Wall Street expectations.

Tesla’s Comeback Lifts Nasdaq, Draws Investor Attention

Tesla (NASDAQ:TSLA) is back in the spotlight for traders and investors. The stock saw a surge of 21.9% on Thursday, closing near $262 per share.

This surge brought Tesla within 4% of its July 11 high and marked a volume jump over three times its 30-day average. The rally was driven by positive earnings results and new developments, such as the recent Robotaxi demonstration that renewed interest in its autonomous driving ambitions. The company’s strong performance provided a much-needed boost to the tech-heavy Nasdaq Composite, which rose 0.8%.

Tesla’s stock has experienced significant volatility, and the recent rally may attract both day traders and long-term investors watching the electric vehicle space. Analyst Jeff Kilburg capitalized on the surge, locking in a 220% gain through an options strategy as Tesla hit $255 per share.

Mercedes-Benz Grapples with Profit Slump Amid Tough Market Conditions

On the other side of the Atlantic, Mercedes-Benz (GER:MBG) reported a steep decline in third-quarter profits, reflecting a tough economic climate. Net profit for the German luxury automaker fell 53.8% to 1.7 billion euros, driven by weak demand in China and a drop in EV sales. Total revenue also slid by 6.7% to 34 billion euros. China, the world's largest automotive market, saw a 13% sales decrease, posing a major challenge for the company.

Mercedes-Benz joined other major German automakers, such as Volkswagen and BMW, in lowering its annual outlook in response to slowing global demand. The company now aims to improve efficiency and cut costs to stabilize its financial position. In early European trading, Mercedes-Benz shares were down more than 2%.

Oil Prices Remain Elevated on Geopolitical Uncertainty

Oil prices edged higher Friday morning and remained on track for a weekly gain of about 2%, reflecting ongoing concerns about supply risks in the Middle East. By early morning, Brent crude had risen 0.4% to $74.71 per barrel, while West Texas Intermediate (WTI) climbed 0.5% to $70.52 per barrel. Traders are closely monitoring the region’s tensions, especially after an October 1 missile strike by Iran on Israel.

While US and Israeli officials are expected to resume ceasefire talks regarding Gaza, a sustainable resolution has remained elusive. As a result, oil prices may retain a risk premium, particularly if escalations continue.

US Treasury Yields Ease as Market Watches Fed Comments

Yields on US Treasury bonds, which move inversely to prices, slightly declined Friday after the 10-year yield hit a three-month high of 4.25% on Wednesday. By Friday morning, the 10-year yield stood at 4.19%, while the 2-year yield dipped to 4.063%.

Federal Reserve officials this week expressed caution regarding further rate cuts. Though the Fed had issued a substantial 50-basis-point cut in September, officials have advised a more gradual approach to addressing inflation, with Cleveland Fed's Beth Hammack cautioning that the Fed’s inflation battle remains ongoing.

Market expectations suggest a near-certainty (97%) of a 25-basis-point rate cut at the Fed’s November meeting, according to CME's FedWatch tool. However, investors should continue to monitor these signals as inflation and economic stability remain central to the Fed’s next moves.

What to Expect Today:

• Durable-goods orders (September)
• Consumer sentiment (October)