US markets closed higher Wednesday, with the Nasdaq up 1.05% and the S&P 500 gaining 0.58%. Meta shares jumped in after-hours trading following strong results, while Tesla cut its capital expenditure guidance.
Major U.S. stock indexes closed higher on Wednesday, October 21, as investors digested a busy slate of earnings reports from technology giants. The Nasdaq Composite led the advance, climbing 1.05% to add 278 points, while the Dow Jones Industrial Average rose 0.69% and the S&P 500 gained 0.58%, marking the third consecutive day of gains for the benchmark index. The semiconductor sector, tracked by the SOX index, rebounded sharply by 1.96%, recovering from prior panic selling with notable gains in Nvidia and Micron.
Meta Platforms (META) emerged as a standout performer, with shares soaring approximately 5.5% in after-hours trading following the release of its quarterly results. The company reported strong advertising growth, which helped lift sentiment in the tech sector. Additionally, Meta’s board approved a new class of non-voting Class C common stock to be distributed via a one-time stock dividend, effectively functioning as a 2-for-1 stock split. This move was viewed positively by investors as it increases liquidity for shareholders.
Tesla (TSLA) also reported earnings after the close, maintaining a positive after-hours performance. The company announced it would cut its full-year capital expenditure guidance to approximately $20 billion, down from previous estimates of more than $25 billion. Tesla also revised the timeline for scaling its Optimus robot, a development that analysts are closely monitoring for its impact on long-term growth projections. Despite the positive reception, broader market sentiment remained cautious, with the VIX volatility index dropping to 16.68 while the Fear & Greed Index remained in the fear zone at 31.
In contrast, Lam Research (LRCX), a major semiconductor equipment manufacturer, saw its shares fall roughly 4.9% in after-hours trading despite reporting increased revenue and profit. This divergence highlighted the selective nature of the current rally, where investors are scrutinizing forward-looking guidance over immediate financial performance. Other notable movers included SpaceX (SPCX), which soared nearly 8% to lead the Nasdaq 100 after posting its first-ever quarterly profit, and Super Micro Computer (SMCI), which surged 9% on preliminary results that exceeded prior guidance.
Market drivers extended beyond corporate earnings, with geopolitical tensions between the U.S. and Iran keeping oil prices elevated. This external pressure, combined with rising Treasury yields, posed a threat to the sustainability of the tech-led rally. As of late Wednesday, U.S. stock futures had declined slightly in the overnight session, with Nasdaq-100 futures down 1% and S&P 500 futures falling 0.49%, suggesting some profit-taking after the day’s gains. Investors are now focused on how these macroeconomic headwinds will interact with the strong earnings season currently underway.