(Reuters) -Futures tracking Wall Street's main indexes dipped on Thursday as disappointing quarterly updates from Tesla and IBM weighed on sentiment, while investors treaded cautiously amid simmering U.S.-China trade tensions.
Tesla's third-quarter profit missed expectations, dragging its shares down 3.1% in premarket trading. A revenue beat offered little relief, as Wall Street grappled with tempered optimism through the week.
The electric-vehicle maker kicked-off the "Magnificent Seven" earnings parade -- a cohort that forms nearly 35% of S&P 500's weight, with the strength to dictate the market's next move.
IBM dropped 6.8% after the company recorded a slowdown in growth in its key cloud software segment, eclipsing a third-quarter beat.
U.S. equity markets have lost steam amid a whirlwind of earnings reports and profit-taking, with trade tensions also weighing on sentiment.
While most companies have outpaced analyst estimates, cautious outlooks have cast a shadow over the rally as investors look for justification behind sky-high equity valuations.
"Attention now turns to how much further positioning could be shaken out as we head toward next week's deluge of U.S. corporate earnings, the October FOMC meeting, and (as) we roll into the business end of the U.S.-China trade talks," Chris Weston, head of research at Pepperstone, said in a note.
At 07:15 a.m., Dow E-minis were down 69 points, or 0.15%, Nasdaq 100 E-minis were down 32 points, or 0.13% and S&P 500 E-minis were down 4 points, or 0.06%.
Quantum computing firms were a bright spot after the Wall Street Journal reported that U.S. President Donald Trump's administration was in talks with several of them to take equity stakes in exchange for federal funding.
IonQ and D-Wave Quantum surged more than 10% each, while Rigetti Computing added 6.6%.
Energy stocks gained following a jump in crude prices on fresh U.S. sanctions against Russia. Chevron, Exxon Mobil and Halliburton rose between 1.5% and 2.9%.
Health insurer Molina Healthcare plunged 20% after slashing its annual profit forecast. Centene and UnitedHealth fell 7.8% and 1.6%, respectively.
Honeywell raised annual profit forecast on strong aerospace demand, sending its shares up 4.4%.
American Airlines shares gained 1.8% after the carrier raised its profit forecast for the year.
T-Mobile gained 2.4% after adding more-than-expected wireless subscribers during the third quarter.
With the U.S. government shutdown now in its twenty-third day, key economic releases, including Thursday's usual reading of weekly jobless claims data, remain frozen, leaving investors without crucial signals.
That puts Friday's core CPI print, expected to hold steady at 3.1%, in sharp focus as the Federal Reserve's only clear inflation guide ahead of next week's policy meeting.
Markets have already priced in a 25-basis-point rate cut, with traders betting the Fed will ease again in December.
Meanwhile, a Reuters report said the Trump administration was weighing sweeping curbs on high-tech exports to China in retaliation for Beijing's latest restrictions on rare-earth shipments. The report had pushed markets lower on Wednesday, injecting fresh uncertainty.
(Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Shilpi Majumdar)