Market Highlights for the Week: Tesla, IMF, and Oil

As earnings season picks up momentum, Tesla (TSLA) will be one of the first major U.S. tech companies to release its results, which are expected on Wednesday after the close of the trading session.

Tesla’s stock has faced losses this month following the unveiling of its eagerly awaited robotaxis, which left some investors disappointed due to the lack of precise details. So far, Tesla shares have underperformed the S&P 500 Index (SPY), with a loss of approximately 11%, compared to the index’s 22.5% gain.

While investors have become more optimistic about the U.S. economy, thanks to strong jobs reports and the Fed’s 50 basis point cut last month, a weak earnings report from Tesla could reignite concerns about the valuations of tech stocks.

Elevated valuations— the S&P 500 trades at nearly 22 times forward earnings—combined with high corporate earnings forecasts and potential volatility from the upcoming U.S. presidential election could leave stocks vulnerable to a correction.

This week, corporate earnings will take center stage, with results from Texas Instruments (TXN) and equipment company Lam Research (LRCX) being closely watched after a volatile week for the semiconductor sector.

Chip stocks fell on Tuesday after Europe’s largest tech company, ASML (ASML), forecasted lower-than-expected sales and bookings for 2025. However, the sector bounced back on Thursday after TSMC (TSM), a key producer of advanced chips used in artificial intelligence, announced a 54% increase in quarterly profit, surpassing expectations.

Semiconductor and related equipment stocks account for 11.5% of the S&P 500’s total weight.

Other companies reporting earnings next week include Coca-Cola (KO), IBM (IBM), General Motors (GM), and Verizon (VZ).

A relatively quiet week is expected on the U.S. economic calendar. However, investors will get updates on the housing sector through new and existing home sales reports. Additional data releases include durable goods orders, consumer confidence, and initial jobless claims.

On Wednesday, the Federal Reserve will release its Beige Book, a report on economic conditions across the central bank’s 12 districts.

Market participants will also have the opportunity to hear from several Fed officials throughout the week, including Minneapolis Fed President Neel Kashkari, Kansas City Fed President Jeffrey Schmid, San Francisco Fed President Mary Daly, Philadelphia Fed President Patrick Harker, and Richmond Fed President Thomas Barkin.

Central bank chiefs and finance ministers from around the world will gather in Washington starting Monday for the annual meetings of the International Monetary Fund (IMF) and the World Bank. They will discuss how countries can navigate an environment of low growth and high indebtedness.

Last week, the IMF warned that global public debt is estimated to exceed $100 trillion by the end of this year, driven by the United States and China.

The IMF noted that high debt levels could provoke adverse market reactions and limit countries’ ability to respond to economic shocks.

Meanwhile, Russian President Vladimir Putin will host a summit of BRICS group leaders starting Tuesday, as the Kremlin seeks support in its confrontation with the West. Russia says that leaders from Brazil, India, China, South Africa, Egypt, the United Arab Emirates, and Saudi Arabia—who collectively account for a third of global economic output—will attend.

Oil prices remain under pressure after a roughly 7% decline last week, as energy traders assess weak demand from major importer China and the ongoing conflict in the Middle East.

Data released on Friday showed that China’s economy grew at its slowest pace since early 2023 in the third quarter, although September consumption and industrial production beat estimates.

Analysts noted that economic weakness in China, coupled with the shift toward electric vehicles, is dampening demand prospects for oil.

At the same time, uncertainty persists over how the Middle East conflict will evolve. U.S. President Joe Biden said on Friday that there is a possibility of a deal between Israel and Iran that could temporarily end the conflict in the region.

However, the Lebanese militant group Hezbollah stated on Friday that it was entering a new phase of escalation in its fight against Israeli troops, dashing hopes that the death of Hamas leader Yahya Sinwar would lead to an end to the war.