World Street | Dow's worst day in a month, Tesla rebounds, IBM fails to impress and more

World Street offers a sneak peek into the world of business and economy.

IBM's flop earnings show weighs on its shares. On the other hand, Tesla shares surged in extended trade after third quarter earnings beat analyst estimates. Nvidia supplier--South Korea's SK Hynix posted record earnings amid AI boom. The Dow Jones Industrial average slipped to an over one-month low. All this and more in the October 24 edition of World Street.

US stocks tumbled overnight, with the Dow Jones Industrial Average suffering its steepest drop in over a month, as rising treasury yields dampened market sentiment. The S&P 500 and Dow Jones shed close to a percent each-- their worst performance since early September. The Nasdaq Composite, however, was the hardest hit as it lost 1.6 percent. During the day, the benchmark 10-year Treasury yield spiked to 4.25 percent, its highest since late July. The surge in yields, despite the Federal Reserve’s recent rate cuts, has been attributed to a mix of strong economic data and concerns over growing fiscal deficits, particularly with the potential of a second Donald Trump presidency.

South Korea’s SK Hynix, one of the world’s largest memory chipmakers, reported a record quarterly profit for the third quarter, driven by strong demand for its high bandwidth memory (HBM) used in generative AI. The company posted revenue of 17.57 trillion won ($12.7 billion), slightly below the expected 18.11 trillion won, but its operating profit surged to 7.03 trillion won ($5.08 billion), surpassing forecasts of 6.8 trillion won. This marks a sharp recovery from the 1.8 trillion won loss in the same period last year. Quarterly revenue grew 94 percent year-on-year from 9.1 trillion won, as the chipmaker, a key supplier to Nvidia, has significantly benefitted from the surge in demand for AI servers.

Tesla reported third-quarter earnings that surpassed analysts' expectations, while revenue slightly missed estimates. The stock surged 12 percent in extended trading. Tesla posted adjusted earnings per share of 72 cents, beating the expected 58 cents, but revenue came in at $25.18 billion, just shy of the $25.37 billion forecast. Revenue grew 8 percent from $23.35 billion a year ago, and net income increased to $2.17 billion, or 62 cents per share, compared to $1.85 billion, or 53 cents per share, last year. Tesla’s profit margins were lifted by $739 million in automotive regulatory credit revenue, as automakers purchase credits to meet required targets, benefiting Tesla, which generates excess credits from its all-electric vehicle production.

IBM shares dropped 3 percent in extended trading overnight after the company missed Wall Street's revenue expectations for the third quarter. While adjusted earnings per share came in at $2.30, exceeding the expected $2.23, revenue fell short at $14.97 billion, missing the $15.07 billion forecasted by analysts. Despite a 1.5 percent year-over-year revenue increase, IBM reported a net loss of $330 million, or 36 cents per share, compared to a net income of $1.70 billion in the same period last year, largely due to a one-time pension settlement charge related to an agreement with Prudential.