By Purvi Agarwal and Tharuniyaa Lakshmi
Oct 21 (Reuters) - Wall Street was set for a higher open on Wednesday after quarterly results from SpaceX and Super Micro Computer improved appetite for the AI trade, while Netflix slipped after its forecast failed to impress investors.
Elon Musk's rocket and space technology firm rose 9.2% in premarket trading after he said on Tuesday that a merger of SpaceX and Tesla would be "a good idea". SpaceX also posted its first profit as a public company. Tesla shares
were up 1.5%.
Super Micro jumped 12.7% after the AI server maker forecast quarterly revenue and profit margin above Wall Street estimates, signaling that AI demand remained resilient.
Peers HPE and Dell rose 4.8% and 7%, respectively.
Investors drew comfort from the reports as concerns over the profitability of the AI buildout triggered a selloff in AI-linked stocks last week, with data center operator CoreWeave at the center of the storm. It was up 3.3% before the bell on Wednesday.
"At this stage, it's important to focus on what impacts the bottom line. Corporate earnings matter. Inflation matters because it influences what the Fed may do next," said Adam Sarhan, director at MarketTerminal.com.
"If the economy continues to grow without major headwinds, that supports higher earnings. In that environment, a lack of bad news becomes good news because it improves the outlook for corporate profits."
On the other hand, Netflix dropped over 6.7% after the streaming giant issued a weaker-than-expected forecast for its fourth-quarter profit, days after laying off 6% of its workforce.
Investors are scrutinizing corporate earnings, especially from AI-aligned companies, for clues on whether the AI spending cycle is sustainable and the impact from rising oil prices.
Meta and Tesla are scheduled to report after markets close.
At 8:44 a.m. ET, Dow E-minis were up 159 points, or 0.3%, S&P 500 E-minis were up 20.25 points, or 0.26%, and Nasdaq 100 E-minis were up 167 points, or 0.56%.
Most chipmakers rose, with Nvidia up 1.7%, Intel gaining 2.2% and Advanced Micro Devices adding 2%.
Semiconductors have had a volatile month so far, with the Philadelphia SE Semiconductor index marking eight consecutive sessions of declines, its longest losing streak in 18 years.
Amid the volatility, investors have flocked to defensive sectors such as healthcare and consumer staples, helping the Dow outshine the S&P 500 and the Nasdaq. The blue-chip index has been trading at over one-month highs.
Meanwhile, oil prices remained elevated, with Brent crude futures trading near $110 a barrel. [O/R]
Data last week confirmed that price pressures were seeping into the US economy, and had broadened beyond energy products, supporting the case for another interest rate hike by the Federal Reserve.
However, markets expect the central bank to remain on hold ahead of the midterm elections on November 3.
Among others, AT&T fell about 5% despite beating third-quarter revenue and profit estimates.
Elevance Health rose around 1.1% after the health insurer lifted its 2026 profit forecast.
(Reporting by Purvi Agarwal and Tharuniyaa Lakshmi in Bengaluru; Editing by Maju Samuel)
